Zhongfu industry: production capital stock with obvious advantage

    zhongfu industry recently revealed in 2006 annual report that the company realized a yield of 0.776 Yuan per share, which was up 223.5% year-on-year.

Since the electrolytic aluminum industry ushered the boom cycle, the achievement of company raised largely. In 2006, the average price of electrolytic aluminum increased over 2005, while the main raw material, alumina turned town rapidly, which created a good external condition to benefit in the second half of the year. The annual report showed that the benefit rate of electrolytic aluminum reached 14.73%, which was up by 4.25 percent point, with obvious profit space.

   Some industry insiders said even though the achievement of Zhongfu Industry increased greatly in 2006, because of the lag of raw materials accounting, the achievement didn¡¯t fully reflect the decline performance of alumina. And in the first quarter of this year, the company may use some of the alumina that were bought in the last quarter of the last year dropping to lowest, which may cause a good sign.

    In fact, some relative data have confirmed the insiders¡¯ view. The annual report showed that the stock in trade at the end of 2006 was 526 million yuan, which was increased by 132.74% over 226 million in 2005. Among them, raw material cost 148 million yuan, an increase of 89.06% year-on-year, while the price of alumina in the last fourth quarter was 2400yuan per ton. If the cost of alumina was calculated in the cost of this year, then the net profit rate will be upgraded again.

For a period of time, Zhongfu industry has become a new force that suddenly rises in the electrolytic aluminum. From the industry point of view, the price of alumina fell. But due to industrial chain and transmission delay, the price of electrolytic aluminum didn¡¯t keep the same step with it. So the net profit is expected to reach highest in the first quarter this year. To Zhongfu insudtry, besides the low price of alumina, high capital stock per share is also an important reason regarded by insiders.

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