Xinyi Glass (0868) said yesterday interim net profit surged 110 percent to HK$1 billion from a year earlier due to robust demand for float glass and energy-saving construction glass in the mainland.
Turnover increased 18.4 percent to a record high of HK$5 billion in the first six months of the year, while interim dividend hit 13 HK cents per share.
The gross profit margin on float glass production rose to 18 percent during the first half, from 4.3percent in the same period last year.
But chief executive Tung Ching-sai said the margin was still low compared with the 30 percent seen in 2009, but would rise in the second half - traditionally a peak season for construction activities.
He said the different color float glasses made by Xinyi are rare in the market, allowing the company to enjoy an advantage over rivals.
As for construction glass, Tung said the company has enough orders for the second half, allowing it to be bullish on its gross profit margin for the whole year.
"The production growth of construction glass is about 20 percent every year, and this will be maintained during the second half," Tung said.
But the firm warned that the increasing price of natural gas has increased operating costs.
So Xinyi will increase the usage of other renewable energy sources and shift the increased cost to buyers, it said.
Tung added the company has started trial production of ultra-thin glass covers for mobile phone handsets at its plant in Wuhu, Anhui province.
