China Liansu Group Holdings announced a 189.2 per cent increase in profit attributable to shareholders, from 167 million yuan (HK$191 million) to 483 million yuan, for the six months ended June 30.
'The group will continue to participate in large infrastructure projects to strengthen our co-operation with government authorities, public utility entities and well-known enterprises, and enhance our corporate image,' says Wong Luen Hei, chairman, executive director and founder of the company. 'We will also increase our spending on advertising and commence targeted marketing activities, with a plan to apply for more intellectual properties.'
The plastic pipe and pipe fittings manufacturer recorded a 143.6 per cent increase in gross profit to 882 million yuan, compared with 362 million yuan a year earlier, while gross profit margin increased seven percentage points from 19.5 per cent to 26.5 per cent.
The increase in profit was attributable to an increase in average selling prices of products and a drop in the cost of raw materials, while the group continued to improve its production efficiencies and expanded its production scale and market share on the mainland.
Moreover, the group was able to maintain bargaining power in negotiating selling prices and maximising discounts on the prices of all raw materials through centralised procurement.
Selling and distribution costs rose by 54.8 per cent to 130 million yuan, up from 84 million yuan a year earlier. This was due to an increase in costs of marketing and packaging as a result of increased sales.