[25 August 2009, Hong Kong] The largest industrial aluminum extrusion products developer and manufacturer in Asia and China, with a particular focus on the transportation, machinery equipment and infrastructure sectors – China Zhongwang Holdings Limited (“China Zhongwang” or the “Company”, together with its subsidiaries the “Group”, stock code: 01333) – announced its interim results for the period ended 30 June 2009 (the “period under review”).
Through the continuous enhancement of R&D and marketing of industrial aluminum extrusion products, commitment to developing, manufacturing and selling products with high gross profit margin and proactive exploration of domestic and overseas markets, the Company has achieved remarkable results during the period under review as compared to last year. Revenue of the Company was approximately RMB6.3 billion, representing a growth of 9.1% over last year.
Gross profit and profit for the period surged by 68.2% and 71.7% to RMB2.5 billion and RMB1.6 billion respectively, surpassing the forecast of the consolidated profit attributable to the shareholders of RMB1,350 million stated on the prospectus. It is noteworthy that the gross profit margin of the Company improved by 14.0 percentage points to 39.7% (2008:25.7%) while its net profit margin also increased 9.4 percentage points to 25.7% (2008:16.3%). Since the listing and trading of the shares of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) only started in 8 May 2009 and the proceeds shall be applied in accordance with the corresponding prospectus, the Directors do not propose the payment of interim dividends.
Mr. Liu Zhongtian, Chairman and President of China Zhongwang, said, “China Zhongwang was successfully listed on the Stock Exchange on 8 May 2009 and the net proceeds amounted to approximately HK$9.5 billion. The listing marked a major milestone for the Company, strengthened its capital base and established a platform for the Company to tap funds for future opportunities and advancement in the market of industrial aluminum extrusion products focusing on the transportation and machinery equipment sectors.”
During the period, gross profit generated from the industrial aluminum extrusion products accounted for 90.2% of the total. The Company strived to increase its penetration in the industrial aluminum extrusion products market, hence boosting the sales of the products. Revenue generated from the industrial aluminum products accounted for approximately 74.4% of the total. In addition, both sales volume and average selling price of the Company’s industrial aluminum extrusion products during the period have climbed up. The sales volume of the industrial aluminum extrusion products increased by 50.1% from 106,236 tons for the first half of 2008 to 159,478 tons for the period ended 30 June 2009, while its average selling price increased by 1.9% from RMB 28,994 per ton for the first half of 2008 to RMB 29,531 per ton for the period ended 30 June 2009.For the period ended 30 June 2009, the Company has 64 aluminum extrusion presses, including a 125 MN oil-driven dual action extrusion press which is the largest of this kind in China and one of the most advanced extrusion presses in the world, allowing us to produce large-section industrial aluminum extrusion products with high precision.
China Zhongwang has a diverse base of domestic and overseas customers which includes transportation, machinery equipment and infrastructure operators in the railway, metropolitan conductor rail, shipbuilding, automobile, aircraft industries, as well as manufacturers of machinery equipments. The Company has strived to develop new products. In view of the ever-increasing demand from industrial customers, the Company will continue to allocate
more production capability to industrial aluminum extrusion products which have better competitiveness and higher gross margin to further improve the turnover and profits of the Company.
Forging ahead, the Company will further penetrate the industrial aluminum extrusion products market by expanding its production capacity according to the demand. The Company is currently installing additional production lines which allow the Company to diversify its product offerings for a broader customer base. In addition, the Company also intends to expand into the downstream sectors of industrial aluminum extrusion products by developing and manufacturing more value-added extrusion products, such as rail freight trucks and passenger trucks, metropolitan railway trucks, heavy truck bodies, and high-strength and high quality quenching alloy products to increase the Company’s profit margin and enhance its competitiveness in the marketplace. The Company is currently constructing new equipment for the production of downstream value-added products. To strengthen its research and development capability, the Company will strive to focus the efforts on improving the manufacturing techniques, increasing product quality, reducing cost and diversifying the products offerings.
“The implementation of the RMB4 trillion economic stimulus package put forward by the PRC government, with increasing efforts to be placed on the development of the transportation and infrastructure sectors, will further promote the demand of the industrial aluminum extrusion products. In addition, following the increasing international recognition upon the listing of China Zhongwang, international sales of the Company has increased significantly. China Zhongwang will continue to expand the business of industrial aluminum extrusion products used in the transportation, machinery equipment and infrastructure sectors. China will remain as our major market while our coverage will continue to extend to overseas markets. Leveraging on our leading production capacity, strong R&D capabilities and extensive and diversified customer base, our Company will focus on strengthening our leading position in the aluminum extrusion industry in China to become the world’s leading developer and manufacturer of industrial aluminum extrusion products.” Chairman Liu concluded.
About China Zhongwang Holdings Limited
China Zhongwang was listed on the Stock Exchange of Hong Kong Limited on 8 May 2009 and it is the largest aluminum extrusion products manufacturer in Asia and China, with a particular focus on the transportation, machinery and equipment and infrastructure sectors for its industrial aluminum extrusion products, and has strong research and development capabilities. According to CRU Strategies Limited (CRU), China Zhongwang was the world’s third largest and Asia’s and China’s largest aluminum extrusion products manufacturer in terms of production capacity in 2007. The Company possesses 64 extrusion production lines, including a 125MN oil-driven dual action extrusion press which is currently the largest of its kind in China and the most advanced extrusion press in the world, which enable the Company to produce plain, sizable, large-section and high-precision industrial aluminum extrusion products tailored to its customers. These products are widely used as components for end products of the transportation sector such as railway, metropolitan railway, aviation, vessels, automobiles and machinery equipments. The Company has been appointed by the Ministry of Railway as one of a few qualified suppliers for manufacturing carriages of wagon and passenger trains and subway conductor rail. By the end of 2008, the Company’s designated production capacity and production volume reach over 535,000 tons and 419,000 tons respectively.
