Xingda sees steel cord sales jump 40 percent

ERJ staff report (DS)

Hong Kong -- Xingda International Holdings Limited has reported results for the 12 months to December 2010. The company reports sales of steel cord and beadwire jumped by 40 percent to yuan 5430 million (euro 573 million) from yuan 3864 million a year earlier.

Around 88 percent of all sales were to domestic customers. of export sales, North America was the largest destination.

In terms of segment, Xingda generated most of its sales from steelcord for radial truck tyres (yuan 3865 million), but sales into the passenger car tyre segment more than doubled, to yuan 1141 million, from yuan 541 million a year earlier. Sales of bead wire also nearly doubled, to yuan 424 millin, from yuan 256 million.

The company said volume sales of steelcord for trucks increased by 28 percent to 276 100 tonnes. Steelcord for passenger cars increased by 111 percent to 96 200 tonnes and beadwire sales increased by 59 percent to 69 800 tonnes

Gross profit grew by 38.4 percent or yuan 453.2 million to yuan 1,635.6 million in 2010 (2009: yuan 1,182.4

million) whereas gross profit margin dipped modestly to a remarkable 30.1 percent (2009: 30.6 percent). The decrease was mainly

due to an increase in revenue contributions from radial tyre cord for passenger cars, which carries a relatively

lower profit margin than that for trucks. During the year, the cost of steel wire rods showed a moderate

uptrend and accounted for 55.2 percent of the Group's cost of sales (2009: 54.1 percent).

In its results statement, Xindga said, "According

to the statistics of the China Association of Automobile Manufacturers, the country produced approximately

18,264,700 vehicles in 2010, representing a year-on-year growth of 32.4 percent. China remained as the world's

biggest automobile producer in terms of units. The persistent strong demand for automobiles in China

continued to drive the growth of radial tyre industry in the country."

It added, "According to the China Rubber Industry Association, the country's total tyre output during 2010 rose by

10.5 percent year-on-year to 420 million units, of which 350 million were radial tyres, 20.7 percent more than the

previous year. In October 2010, the tyre industry policy issued by the Ministry of Industry

and Information Technology of the PRC stated the radialisation rate of passenger cars, heavy and light trucks

tyres in China should reach 100 percent, 90 percent and 85 percent respectively by 2015. In 2010, radialisation rate of

passenger car tyres grew to almost 100 percent, while that of truck tyres remained approximately 75 percent, giving it

room for further improvement in the coming five years. The rising radialisation rate and favorable national

policies in China presents immense opportunities to radial tyre cord manufacturers."

Xingda said during the year, the Group expanded its production facilities, boosting annual capacity to 430,000 tonnes of

radial tyre cords (2009: 345,000 tonnes) and 81,000 tonnes of bead wires (2009: 66,000 tonnes). With phase

1 of the No. 9 factory operational in the first half of 2010, production capacity for radial tyre cords rose

24.6 percent to 430,000 tonnes and bead wires increased by 22.7 percent to 81,000 tonnes.

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Results statement from Xingda (Contains a great deal of information)