Product Mix Further Optimised
Expands Downstream High-end Product Applications through Overseas Acquisitions
• Overall sales volume for the first nine months of approximately 489,000 tonnes, total revenue of RMB12.71 billion.
• Net profit of approximately RMB2.34 billion, net profit margin of 18.4%.
• In the third quarter, the Group’s revenue up 12.5% year-on-year to approximately RMB5.39 billion while profit for the period up 1.4% to approximately RMB1.08 billion.
• Sales of aluminium alloy formwork posted continual quarterly growth, achieving sales volume of over 187,000 tonnes for the first nine months.
• The first production line of the aluminuim flat rolling project has commenced commercial production.
• Successively completed two overseas acquisitions of Germany-based Alunna and Australia-based SilverYachts, strategically expanding downstream applications of high-end aluminium products in aviation and marine sectors.
(Hong Kong, 31 October 2017) - China Zhongwang Holdings Limited ("China Zhongwang" or the "Company", together with its subsidiaries, the "Group", stock code: 01333), a world’s leading fabricated aluminium product developer and manufacturer, announced its unaudited consolidated results for the nine months ended 30 September 2017 (the “Period under Review”). During the Period under Review, the sales of the high value-added aluminium alloy formwork business posted continual quarterly growth, driving the Group’s total revenue to reach approximately RMB12.71 billion, up by 2.0% as compared to the corresponding period of last year. Net profit was approximately RMB2.34 billion. The benefit of continuous product mix optimisation has been gradually realised in the third quarter. For the third quarter ended 30 September 2017, the Group saw an uptrend in both its revenue and profit for the period, which increased by 12.5% and 1.4%, respectively.
Mr. Lu Changqing, President and Executive Director of China Zhongwang, said, “After the product mix adjustment in the first half of the year, the value added by the new products began to reveal in the third quarter. Meanwhile, the Group has completed two overseas acquisitions, namely Alunna, a Germany-based seamless extruded tubes manufacturer serving major players in the international aviation industry, and SilverYachts, a top all-aluminium superyacht builder based in Australia. The acquisitions mark a strategic step for the Group to make further inroads in expanding the application of aluminium in high-end sectors, and also signify the Group’s direct entry into the downstream end product manufacturing business. China Zhongwang is well-prepared to provide all-round integrated lightweight solutions, with its further optimised product mix and strengthened comprehensive capabilities.”
Competitive Aluminium Alloy Formwork Business Contributes to Further Product Mix Optimisation
During the Period under Review, with the continuously improved production efficiency and product yield for the segment, the Group’s aluminium alloy formworks recorded an increasing quarterly sales volume, at 48,000 tonnes, 63,000 tonnes and 76,000 tonnes for the first three quarters, respectively, which translated into the accumulated shipments for the first nine months at approximately 187,000 tonnes, accounting for 38.3% of the Group’s total sales volume. Benefiting from the patented alloying and surface treatment techniques, the quality of China Zhongwang’s aluminium alloy formworks significantly outperformed the market. The average selling price reached RMB33,088 per tonne, pulling the Group's overall average selling price upwards considerably by 22.5% to RMB26,014 per tonne. During the Period under Review, revenue of the aluminium alloy formworks totalled RMB6.19 billion, accounting for 48.7% of the Group's total revenue. The Group continued to optimise its production capacity and product mix. One of the two ultra-large 225MN extrusion presses procured previously has commenced commercial production in October, which is expected to effectively unleash the value generated by the product mix optimisation.
Commercial Production of Aluminium Flat Rolling Project Commenced to Enhance Industry Chain Extension
In the third quarter, the first production line in the Tianjin-based flat rolling project commenced commercial production, signifying a more extensive business distribution along the industry chain. The main products of the project in the early stage of production include high quality aluminium alloy plates and sheets that are supplied to the transportation, industrial equipment, and chemical container sectors. The technology and R&D team has been taking forward the accreditation process for high-end products. The second production line is carrying out equipment testing as scheduled. The official kick-off for the aluminium flat rolling business is conducive to consolidating the Group's competitiveness in the long run.
Successive International Acquisitions to Promote High-end Applications of Aluminium
The Group has completed two international acquisitions lately, marking a milestone for China Zhongwang’s international business expansion. Aluminiumwerk Unna AG (“Alunna”) mainly produces a myriad of high quality aluminium alloy extrusions including high-end seamless and porthole tubes that are widely used in the aviation and automobile industries. SilverYachts Ltd. (“SilverYachts”) is the only company in the world capable of building large-scale all-aluminium alloy superyachts of over 70 metres, as well as a pioneer in the new application of aluminium alloy in the marine sector. The businesses of the above two outstanding companies are highly complementary to the Group's existing businesses, therefore will create a win-win situation for all parties upon the synergies derived from the acquisition.
Looking ahead, Mr. Lu Changqing said, “The Group has incorporated and integrated with remarkable aluminium processing and downstream enterprises while consolidating its own product mix, industry chain extension and profitability. Such moves add momentum to the Group’s future sustainable growth. On behalf of the Board, I would like to welcome both Alunna and SilverYachts again in joining the China Zhongwang family, and look forward to witnessing with our shareholders a broader future to be created by the Group.”