China Zhongwang Holdings has announced an 84.7 per cent increase in profit attributable to shareholders, to 3.53 billion yuan (HK$4.01 billion) for last year from 1.91 billion yuan in 2008. Strong economic growth on the mainland and stable growth in consumption of industrial aluminium extrusion products led to an increase in revenue and profit for the company, since 95 per cent of its gross profit comes from industrial aluminium extrusion products. 'The global economy in 2009 has gradually come out of the haze of the financial turmoil and achieved stable growth,' says Liu Zhongtian, the company's chairman and president. Thanks to the global aluminium extrusion industry establishing itself on the mainland, the company took advantage of the creation of new business opportunities, including the export of industrial aluminium extrusion products. 'Zhongwang seized opportunities during the year under review and increased its investments towards providing products for the transportation, machinery and equipment, and power transmitter sectors, and achieved its goal of being the leader in the industry,' Liu says. According to Boston Consulting Group, aluminium extrusion consumption on the mainland rose at a compound annual growth rate of about 25 per cent, from 3,383 kilotonnes in 2005 to 8,112 kilotonnes last year. The volume of industrial aluminium extrusion products, applied in main downstream sectors, surged from 837 kilotonnes in 2004 to 2,637 kilotonnes last year, while forecasts of volumes of industrial aluminium extrusion products applied in downstream industries is expected to reach 15,433 kilotonnes in 2015. As the second-largest aluminium extrusion products manufacturer in the world, based on production capacity, Zhongwang had 6.2 per cent global market share at the end of last year. The company's production capacity reached 593,901 tonnes last year, compared with 535,311 tonnes in 2008. Production volumes increased to 457,490 tonnes from 419,466 and capacity utilisation rate rose to 81 per cent from 80.6 per cent. In February, the company's wholly-owned subsidiary, Liaoning Zhongwang Group, entered into a framework agreement to acquire Qinghai Guoxin Aluminium Industry. The company will be able to increase its annual production capacity by another 800 kilotonnes by the end of this year when the acquisition is completed and additional production lines are installed. Last year, Zhongwang's sales of industrial aluminium extrusion products surged 84 per cent to 370,833 tonnes from 201,484 tonnes in 2008, while the average selling price rose 0.4 per cent to 31,017 yuan per tonne from 30,895 yuan in the previous year. The company owns 66 aluminium extrusion presses, including a 125 MN oil-driven dual-action extrusion press, which is the largest of its kind on the mainland and one of the most advanced presses in the world. Moreover, Zhongwang plans to increase its competitive advantage through leveraging its cost control and production efficiency by expanding its production capacity and product mix. The company will be expanding downstream processing of its products so that it can gain higher value by producing customer-end products that are more convenient to use. It will also continue to focus on its research and development (R&D) investments that aim at increasing new product development, expanding market applications, and enhancing its leading position in product innovation and market applications. 'Leveraging our leading production capacity, strong R&D capabilities and extensive and diversified customer base, we endeavour to become the world's leading developer and manufacturer of industrial aluminium extrusion products while serving the best possible returns for our shareholders,' Liu says. Zhongwang recorded 23 per cent year-on-year growth in revenue to 13.85 billion yuan in the year to December 31 from 11.26 billion yuan in 2008. Gross profit surged 70.5 per cent to 5.29 billion yuan from 3.1 billion yuan, while gross profit margin rose 10.7 percentage points to 38.2 per cent from 27.5 per cent. Earnings per share rose to 72 fen from 48 fen in the previous year. The board of directors recommended a total dividend for the year of 26 HK cents per share, representing an aggregate payout of 35 per cent of the company's profit attributable to shareholders. The total dividend includes a final dividend of 19 HK cents per share, representing a payout ratio of 25 per cent and fulfilling its commitment to shareholders at the time of the company's initial public offering in May last year that the dividend payout ratio would not be less than 25 per cent. The directors also recommended a special dividend of 7 HK cents per share.