China Zhongwang posts RMB495 million net profit for first quarter of 2013

China Zhongwang Holdings Limited together with its subsidiaries "the Group", the second largest industrial aluminium extrusion product developer and manufacturer in the world, today announced unaudited consolidated results for the quarter ended 31 March 2013. The Group reported quarterly revenue and net profit of RMB3.2 billion and RMB495 million respectively, flat versus the same period of last year. Effective cost control and management measures yielded a 2.6 percentage-point increase in gross profit margin, to 28.4% for the review period. Sales volume of aluminium extrusion products was 141,000 tonnes, an increase of 7.2% year-on-year, as the Group continued to expand its customer base in both domestic and overseas markets.

"The Group continues to ramp up its production capacity of high-end, large cross-section products and increases its investment in product research and development. We are confident of further expanding our customer base to achieve the annual sales target of 650,000 tonnes in 2013," said Lu Changqing, executive director and vice president of China Zhongwang. "In addition, the new industrial aluminium extrusion deep-processing centre gradually commenced operation last year and is expected to further enhance our product mix and increase export sales," he added.

Sales from the China market for the first quarter of 2013 amounted to RMB2.84 billion, accounting for 88.5% of the Group's total revenue (2012Q1: RMB2.95 billion and 91.0%). As the operating scale of the deep processing centre increases, sales of high value-added deep-processed products, which allowed the Group to access to overseas markets, jumped 104.9% to 11,000 tonnes. Revenue from overseas markets therefore climbed 25.4% to RMB370 million. Its share of the Group's revenue rose to 11.5%.

The Group's production base for aluminium flat rolled products located in Tianjin is under construction in full gear. The Group will roll out phase-one of the project with production capacity of 1.8 million tonnes of flat rolled products by 2015 and realize the full capacity of 3 million tonnes by 2018. This will form a new long-term growth driver for the Group.

"High-end, high value-added aluminium processed products remain the material of choice in China's urbanization process, and industrial upgrade in railway transportation, machine equipment and new energy industries. The Chinese Government has been advancing policies to support and broaden aluminium applications. Among them are encouraging 'aluminium in lieu of steel' in transportation sector and 'aluminium in lieu of copper' in electric power engineering sector with a view to conserving energy and reducing emissions. We will continue to expand our presence in the industry chain to high-end and high value-added aluminium processed products to capture opportunities from China's growing needs for aluminium processed products, powering the Group with sustainable growth engine and bringing returns to shareholders," Lu concluded.