Xinyi Glass first half profit 31.2% to HK$842 million

The glass maker’s turnover surges by 46.5% despite challenges brought by Europe, USA and China business environments.

Xinyi Glass Holdings Limited (“Xinyi Glass”), a leading integrated high-quality float glass, automobile glass, energy saving construction glass and solar glass manufacturer, announced today its interim results for the six months ended 30 June 2011.

During the reviewing period, the Group’s all business segments reported good performance.

Moreover, both overseas sales and sales in the PRC recorded satisfactory growth. The Group achieved record high in its turnover and net profit. Its turnover was approximately HK$3,881 million, surged by approximately 46.5% as compared to the same period last year. The overall gross profit also increased significantly by 32.8% to approximately HK$1,370.2 million. Profit attributable to equity holders surged 31.2% to HK$842 million. Earnings per share were 23.8 HK cents (2010: 18.1 HK cents).

The Board of Directors proposed payment of an interim dividend of 11.0 HK cents per share (2010: 8.0 HK cents), which represents a dividend payout ratio of 47.5%. Besides, the Board of Directors proposed that shareholders can choose between receiving the dividend either in the form of shares or cash.

Xinyi Glass disclosed that the Group faced challenges brought by Europe, USA and China business environments during the reviewing period. However, benefiting from its strategic business network, the Group was able to capture the business opportunities in the three major economic zones in China. It was also aggressively expanding its production to meet strong demand from overseas market. Moreover, the Group managed to lead the global glass industry by boosting its economies of scale, improving production techniques and procedures, and implementing more stringent cost controls on raw materials and inventory. The Group has also adopted a flexible operation strategy to take advantage of different supportive government policies in the PRC.

Prospects
Facing tightened economic policies in China, the float glass market is anticipated to volatile for a period of time. The PRC’s national affordable housing scheme might have a more positive effect on the demand of float glass by the end of this year. The Group is more optimistic for the export business of automobile glass in the second half of this year. Also, the Group expects that second and third tier PRC cities will also have a strong demand for high quality float glass and Low-E glass in the future, according to a Xinyi Glass report.

With the four new solar glass production lines in Wuhu and Tianjin gradually commenced production, the Group has become one of the largest solar glass manufacturers in the world. If the overseas countries’ supportive policies and subsidies to solar industry are being launched at a faster pace, it would help stabilize the solar glass market.

The Group will strengthen its research and development capability to enhance the development of new products and product quality, with focus on development of automobile glass, high quality float glass, new energy and environmentally-friendly, energy efficient glass and ultra thin electronic glass products. The Group is building an ultra-thin electronic glass production line in Wuhu to capture demand from the growing market for high technology ultra thin electronic products. It is believed this new high technology glass products will be another future growth driver of the Group.