Statistics

China Zhongwang's net profit increases 85% year-on-year

By Wang Ying (China Daily)
Updated: 2010-04-22 09:30

China Zhongwang's net profit increases 85% year-on-year

Demand for aluminum extrusion products has risen approximately 25 percent per year in China in the past nine years. Zhongwang's sales increased 84 percent to 370,833 tons in 2009. [China Foto Press]

SHANGHAI - China Zhongwang Holdings Ltd, the largest aluminum extrusion products manufacturer in China and Asia, reported 84.7 percent growth in its net profit in fiscal year 2009 over a year earlier.

The company realized revenue of 13.85 billion yuan, up 23 percent year-on-year. Its net profit surged 84.7 percent to 3.53 billion yuan during the same period, said the Hong Kong-listed company in its annual report released on Wednesday.

Staying focused on high value-added products helped the company maintain its dominant position in the aluminum extrusion industry.

"China showed a swift recovery in major economic statistics with the government-led spending spree on infrastructure projects, which fueled the consumption of aluminum extrusion products," said Liu Zhongtian, chairman and president of China Zhongwang.

A newly released report from Boston Consulting Group said that the global consumption of industrial aluminum extrusion products has increased steadily over the past nine years. In China, demand for this material has risen approximately 25 percent per year.

According to Zhongwang's report, gross profit generated from industrial aluminum extrusion products accounted for 95 percent of the company's total.

In addition, both sales volume and average selling price of the company's products rose during the past year. Sales of industrial aluminum extrusion products increased 84 percent from 201,484 tons in 2008 to 370,833 tons in 2009.

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China Zhongwang has sought to expand its production capacity in recent years, said Zhang Zhipeng, an industry analyst with Aijian Securities.

In February 2010, Liaoning Zhongwang, a wholly owned subsidiary of the company, signed a framework agreement to acquire a 100 percent equity interest in Qinghai Guoxin Aluminum Industry Inc Co.

Once the proposed acquisition is completed in 2010, China Zhongwang will be able to produce 800,000 tons per year, further strengthening its market share in the industrial aluminum extrusion market.

"There are no major rivals in domestic aluminum extrusion. For example, Shangdong Nanshan Aluminum Co Ltd produced 110,000 tons of the products in 2009, merely one third of Zhongwang's total production," said Zhang.

Different from building aluminum extrusion products, industrial aluminum extrusion products are more profitable due to a higher emphasis on research and development, said Zhang. As the nation speeds up construction of a nationwide high-speed railway network, demand for trains will be huge, and most of the orders will go to China Zhongwang, he added.

China Zhongwang has become the world's second largest manufacturer of industrial aluminum extrusion products.

The company possesses 66 extrusion production lines, including a 125 meganewton 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 sizable, large-section and high-precision industrial aluminum extrusion products tailored to its customers.