China Zhongwang's gross margin rises in 2015

Although global economic growth continued to slow in 2015, excess production capacity led to a general decline in the performance of the aluminum industry. However, due to increased investment in technology and R&D, and gradual optimization of production capacity and product mix, China Zhongwang’s profitability has been achieved. Promote.

The annual report published by China Zhongwang recently showed that total revenue was approximately RMB 16.17 billion in 2015, which represents an increase of 1.3% from 2014. In addition, as the proportion of high-end products increased, the overall gross profit margin increased by 4.9 percentage points year-on-year to 32.9%. .

Develop high-end aluminum processing, optimize product structure and improve product profitability:

1. The industrial aluminum extrusion business is the traditional strength of China Zhongwang. In 2015, when core production equipment was operating at full capacity, Zhongwang, on the one hand, replaced or reformed old production capacity to improve equipment production efficiency. On the other hand, it assisted customers in developing high-end products to increase the proportion of high value-added products. This consolidated the overall profitability of Zhongwang, plus the additive effect of aluminum ingot price reductions, the gross margin of aluminum extrusion business increased from 25.4% in 2014 to 30.0% in 2015.

In 2015, China Zhongwang Aluminum's sales volume was approximately 660,000 tons, and sales revenue was approximately RMB 14.14 billion, which was basically the same as 2014.

China Zhongwang stated that after the two world's largest and most advanced 225MN ultra-large aluminum extrusion presses are put into production, they will further consolidate the company's leading advantages in the production of high-precision, complex large-section industrial aluminum extrusion products.

2. Deep processing business is a new area that Zhongwang has vigorously expanded since 2011. In 2015, the company further diversified its deep-processed product categories, especially in transportation applications. Among them, the proportion of aluminum component products of new energy vehicles and passenger cars in deep processing products is gradually increasing. It is reported that Zhongwang has an all-round capability from independent design to manufacturing and processing, and has made important breakthroughs in the design of new energy all-aluminum pure electric vehicles and integrated design of aluminum alloy battery frames. In 2015, the gross profit margin of the company's deep processing business increased from 31.8% in 2014 to 32.5% in the year under review.

In addition, the sales volume of China Zhongwang deep processing business also rose by 15.5% year-on-year to approximately 73,000 tons in 2015. Sales revenue increased by 13.0% year-on-year to approximately RMB 1.95 billion.

Progress in a number of businesses:

While vigorously promoting its core business, China Zhongwang has achieved a number of breakthroughs in its ongoing business.

1. The first production line of the high value-added aluminum rolled steel project in Tianjin entered a key stage before it was formally put into production. The core and ancillary equipment have been completed in trial operation. The final commissioning of different alloy grade products and trial production of some customers' sample orders are ongoing. In the second half of 2015, the casting workshop completed the casting of aluminum alloy slabs at one time, and the hot-rolled and cold-rolled production lines produced the first aluminum alloy sheet and the first aluminum alloy coil respectively, marking a phased progress in the project.

2. The high-purity aluminum and special aluminum alloy projects in Yingkou City, Liaoning Province, put into production of 400,000 tons of production capacity in the year under review, and began to provide high quality aluminum alloy raw materials for the Group's internal production. In 2015, the supply was about 290,000 tons. The first of the two 225 MN ultra-large extrusion presses is being installed in the Yingkou plant to secure production in 2017; the second unit will be installed in the factory during the year.

3. In addition, Liaoning Zhongwang Special Vehicle Manufacturing Co., Ltd. (“Special Vehicle Factory”), which is wholly owned by the Group, has obtained licenses for production and sales of various aluminum commercial vehicle models during the year under review. Currently, it is stepping up the construction of two production lines. Produce aluminum semi-trailer and tanker separately. The sales team of the special vehicle factory is actively contacting potential customers and strives to achieve scale sales within this year.

Looking ahead, Lu Zhongqing, executive director and president of China Zhongwang, stated: “The Chinese government’s many macro policies have promoted the high-end applications of aluminum alloys in transportation, mechanical equipment and power engineering from all aspects. Looking forward to 2016, we will We will promote the first production line and special vehicle plant of the Tianjin aluminum-rolled steel project, while continuing to optimize industrial aluminum extrusion equipment and expand production capacity, and insist on R&D investment to increase the proportion of high-end products. In the face of a huge potential market, the Group owns industries. The three core businesses of aluminum extrusion, deep processing and aluminum rolling, combined with high precision aluminum casting capabilities, will take advantage of the full range of business opportunities to capture the opportunities brought by China's industrial upgrading and lead the industry."