China Zhongwang Holdings Ltd., the aluminum maker fighting claims of fraud by a short-seller, is seeking to expand in Europe and the U.S.
“We’re actively seeking cooperation in Europe and the U.S., including potential acquisitions,” Lu Changqing, executive director and vice president, said at an earnings briefing. “We are particularly interested in those who are in the transportation business.”
The company earlier reported an 18 percent increase in first-half net profit after selling fewer tons with lower costs and bigger margins.
China’s biggest manufacturer of extruded aluminum, used in everything from rail carriages to power plants, said net profit was 1.5 billion yuan ($230 million) from 1.27 billion yuan a year earlier. Revenues slipped 0.7 percent as total shipments declined and average sales prices rose 5.9 percent as it geared its plants to more profitable products, the company said in a statement to the Hong Kong Stock Exchange.
“The group’s development was in line with the pace of the overall economy,” the company said in a statement.
Zhongwang’s stock was suspended on July 31 after a previously unknown group called Dupre Analytics published a report claiming, among other things, that the company used parties related to its chairman and founder to defraud investors and fabricate revenue. Zhongwang denied the allegations and noted Dupre has a short position in its stock.
“The report came as a bit surprising at first but when I actually saw it I just couldn’t take it seriously,” Vice President Lu said in comments after the briefing in Hong Kong.
The company’s shares resumed trading Aug. 13, losing 12 percent to close at HK$2.90 in Hong Kong. The stock rose 2.8 percent to HK$2.98 on Thursday.
Zhongwang operates plants in Liaoning province in northeastern China, buying raw metal for processing into products used in transport, manufacturing and engineering.
The price of its input, primary aluminum, has slumped to a six-year low in China amid overcapacity and weak demand as the country’s economy slows. The decline doesn’t hurt Zhongwang because the company’s profits come from processing, Lu said at the briefing on Thursday.
China’s aluminum exports will continue to grow, the company said. While shipments fell 20 percent in July, they have surged 28 percent to 2.87 million tons in the first seven months, the highest ever for the period, customs data show.