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China Zhongwang Announces Results for First Nine Months 2013

Wednesday, October 30, 2013 4:47 AM


China Zhongwang Announces Results for First Nine Months 2013

Profit Attributable to ShareholdersSurges 13.5% to RMB1.57 Billion

Sales Volume of Aluminium Extrusion Products Reaches 495,000Tonnes

Sales from Deep-processed Products Rose 65.4% to RMB1.13 Billion

HONG KONG, Oct. 30, 2013 /PRNewswire/ --

Financial Highlights (Unaudited)

For the nine months ended 30 September Change (%)

RMB Million 2013 2012

Revenue

- China (as a % of revenue) 10,931 10,736 +1.8

- Overseas (as a % of revenue) 9,620 (88.0%) 9,917 (92.4%) - 3.0

1,311 (12.0%) 819 (7.6%) +60.2

Gross profit 3,021 2,298 +31.5

Gross profit margin (%) 27.6 21.4 +6.2 pts

Profit attributable to

shareholders 1,574 1,387 +13.5

Sales Highlights

For the nine months ended 30 September

2013 2012

Tonnes As a % of Tonnes As a % of Volume

total volume total volume Growth (%)

Aluminium extrusion

products sales volume 495,423 100% 433,506 100% +14.3

- Industrial 416,859 84.1% 384,678 88.7% +8.4

- Deep-processed 40,702 8.2% 19,066 4.4% +113.5

- Construction 37,862 7.7% 29,762 6.9% +27.2

China Zhongwang Holdings Limited ("China Zhongwang" or "the Company", together with its subsidiaries "the Group", stock code: 01333), the second largest industrial aluminium extrusion product developer and manufacturer in the world and the biggest one in Asia and China, announced the unaudited results for the nine months ended 30 September 2013 (the "review period").

During the review period, the Group strived to optimize product mix, develop overseas markets, and enhance operational efficiency. Revenue totaled RMB10.93 billion, up 1.8% year-on-year. Gross profit margin rose by 6.2 percentage points to 27.6% compared with the same period last year. Increased profitability boosted profit attributable to shareholders by 13.5%, reaching approximately RMB1.57 billion.

Sales volume of aluminium extrusion products rose 14.3% to 495,000 tonnes year-on-year. Sales volume of the deep-processed products grew significantly by 113.5% to 41,000 tonnes during the review period. As deep-processed products were mainly exported to overseas markets, revenue from overseas markets surged notably by 60.2% to RMB1.31 billion.

Upgrade of industrial aluminium extrusion equipment to drive down production cost

As at 30 September, 2013, the Group had 87 aluminium extrusion production lines. Once the installation and testing of 6 additional aluminium extrusion production lines are completed, the number of industrial aluminium extrusion production lines of the Group will reach 93 and the annual production capacity will be over 1 million tonnes.

Mr. Lu Changqing, Executive Director and Vice President of China Zhongwang, said, "To upgrade the quality and production efficiency of high precision, large-section industrial aluminium extrusion products, we put in place the most advanced aluminium extrusion production equipment and tap into the Group's proprietary research and development capability. These efforts enable us to keep pace with our overseas and domestic expansion plan. "

Deep-processing business optimizes product mix to form a new profit growth engine

Deep-processed products represented a key niche for profit growth pursued by the Group with major efforts. During the review period, due to certain concessions offered by the Group to existing deep-processed product customers in an effort to further expand its overseas markets and boost export sales, coupled with a drop in the aluminium ingot prices, the average selling price of the Group's deep-processed products fell to RMB 27,676 per tonne. Sales volume, however, rose substantially by 113.5% year-on-year. During the review period, the Group successfully developed high-tech, high value-added deep-processed product prototypes such as all-aluminium fire trucks, refuse collection vehicles, semi-trailers and high-speed rail carriages. As the relevant market conditions gradually ripen for such products, vast market potentials will facilitate a robust growth of the Group's deep-processing business.

Focus on technology innovation to raise product value

Technological innovation provides the main impetus for sustainable development of enterprises. The Group continued to invest in product research and development. It started to set up the "Liaoning Province Key Laboratory for High-end Aluminium Alloy Extrusion Processing" in the third quarter of the year, which is expected to be completed in two years. The laboratory will further improve the Group's relevant research & development and testing equipment and upgrade production technology of high-end large-section industrial aluminium products and deep-processed products, satisfying the rigorous technical requirements of large-section industrial aluminium products from different industries.

"The State Council announced in the third quarter environmental protection and industry upgrade policies including 'Notice on Further Promotion and Use of New Energy Vehicles' and 'Action Plan for Air Pollution Prevention and Control', giving guidance on the elimination of obsolete vehicles, on the development of public transport, the increase of new energy supply, and the promotion of new energy vehicles, etc. These policies provide new business opportunities for China Zhongwang which possesses superior capabilities in both research & development and equipment," Mr. Lu said.

The Chinese Government has been actively advancing urbanization and implementing a number of industrial reform measures. Infrastructure development and industrial upgrade of urban transportation, machinery and automobile manufacturing will continue to fuel aluminum consumption. The Group will continue to reap the benefits from the growth in the downstream consumer market. In the future, China Zhongwang will further develop and diversify its high-end industrial aluminum extrusion product offerings, strengthen the deep-processing business, and make an all-out effort to advance the aluminum flat rolled product project, so as to build stable and diversified revenue streams.

About China Zhongwang Holdings Limited

China Zhongwang is the second largest industrial aluminium extrusion product developer and manufacturer in the world and the biggest one in Asia and China. It has, over the years, been focusing on the light-weight development of transportation, machinery and equipment and electric power engineering sectors through the provision of quality industrial aluminium extrusion products. It now has 93 globally advanced extrusion production lines (including 6 aluminium extrusion production lines of 75MN or above under installation), among which the 125MN oil-driven dual action extrusion press is currently one of the largest and most advanced of its kind in the world. These facilities enable the Company to produce large-section and high precision industrial aluminium extrusion products tailored to its customers' needs. These products are widely used in the transportation sector such as railway passenger compartments and cargo carriages, metropolitan subway and light rail, automobiles, heavy trucks, vessels, aviation, aerospace, etc., and equipment and machinery and electric power engineering sectors. In addition, to further leverage its existing strengths in the industry, the Group is developing the high value-added aluminium flat rolled product business. Phase one of the project with a planned annual production capacity of 1.8 million tonnes will gradually commence production in 2015, while the overall planned annual production capacity of 3 million tonnes will be realized in 2018, by which time the Group will have initially achieved the aim of tapping the high value-end aluminium flat rolled product sector to become its third complementary and synergistic core business segment alongside the existing industrial aluminium extrusion product and deep-processed product businesses.

For further information on the Group, please visit www.zhongwang.com.

SOURCE China Zhongwang Holdings Limited

(Source: PR Newswire )
(Source: Quotemedia)

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