China Nickel Resources Holdings, a nickel-based steelmaker on the mainland, said profit quadrupled last year because of a better product mix. Net profit at the Henan-based steelmaker, which is expanding to Indonesia, increased to 359.3 million yuan (HK$401.2 million) from 90.3 million yuan a year earlier. Turnover rose 113 per cent to 1.87 billion yuan. The company declared a final dividend of 1.3 HK cents per share. Despite the strong growth, China Nickel's earnings missed a 378.7 million yuan forecast by Daiwa Institute of Research. The stock fell as much as 9.8 per cent in the afternoon after the company announced the results at yesterday's lunch break. It closed down 5.88 per cent at HK$2.40. Chairman Dong Shutong said the company completed the purchase of exclusive rights to an Indonesian nickel mine last year and shifted its main products to higher-value nickel-chromium materials for stainless steel from bearing steel. Its base materials business, which started in January last year, has a gross margin of 33 per cent, helping lift overall margin 10 percentage points to 31 per cent last year. The company produced 238,074 tonnes of base materials last year, accounting for 77 per cent of total sales volume and 90 per cent of revenue. Base materials are semi-finished products in making stainless steel. China Nickel's top three customers include Baosteel Group, Pohang Iron and Steel and Taiyuan Iron and Steel Group. The average selling price of its stainless steel base material, excluding value-added tax, was 9,271 yuan per tonne last year, compared with 3,434 yuan for bearing steel. Mr Dong said the company would increase production of its own stainless steel products this year to boost margins. The company plans to produce 50,000 tonnes of base materials this year, 150,000 tonnes of stainless steel and 50,000 tonnes of nickel chromium-based alloy steel. Mr Dong said construction of China Nickel's planned 1.3 billion yuan plant in Henan as well as its planned 2 billion yuan plant in Indonesia was under way after winning government approvals. He said the company had enough funds for the new plants after raising 2.6 billion yuan from two bond sales last year, in addition to its operating cash flow.