Tangshan forecasts profits to rise 80%
(Shanghai Daily)Updated: 2007-06-21 13:12 Tangshan Iron & Steel Co, the publicly traded unit of China's second-biggest steel maker, said first-half profit may rise as much as 80 percent on increased capacity and production of more higher grades.
Shares rose as much as eight percent to 15.37 yuan before trading at 14.88
yuan at 11:33am in Shenzhen. The stock has almost tripled this year.
Net income may rise between 50 and 80 percent in the six months ended June 30 from 702.7 million yuan (US$92.2 million) a year ago, the Hebei Province-based company told the Shenzhen Stock Exchange yesterday.
That could translate into a profit of as much as 800.2 million yuan for the second quarter of this year, up 36 percent from a year ago, according to Bloomberg News calculations derived by subtracting Tangshan Steel's reported first-quarter profit of 464.7 million yuan from the half-year forecast. The company's shares have more than quadrupled in the past year.
Steel prices in China, the world's top producer and user of the metal, recovered this year after producers boosted exports and the government curbed loans to rein in capacity expansion.
Tangshan and its rivals are shifting production to higher-value products, including cold-rolled sheets used in automobiles and plates used in ships, as China has overcapacity in lower grades.
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The company opened a plant in September to make 1.5 million tons of steel plates a year. The plant reached full capacity in the first half of this year, the statement said.
Prices of hot-rolled coil, an industry benchmark, have averaged 4,248 yuan a metric ton in China so far this year, compared with 3,776 yuan a year ago, according to Metal Bulletin.
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