China Zhongwang Holdings Ltd - Asia's largest and the world's second-largest aluminum producer - has reported a 17.9-percent rise in net profit to 1.5 billion yuan ($234.8 million) for the first half of 2015, compared with a year ago, after the company categorically rejected recent charges of inflated sales by the company.
Aluminum extrusion accounted for 99.6 percent of the group's revenue, roughly at the same level for the corresponding period last year, the Hong Kong-listed company told the Hong Kong Stock Exchange on Thursday.
About 86.5 percent of the company's revenue, which remained flat at 7.89 billion yuan for the first half, came from sales on the Chinese mainland.
Some 13.5 percent of the revenue was from overseas sales, covering eight countries, including two new markets, Belgium and Holland. This contribution dropped by 31 percent year-on-year to 1.07 billion yuan, of which 770 million yuan came from the US - Zhongwang's conventionally major export destination.
The group last week rebutted point-by-point allegations by previously-unknown research house Dupre Analytics, which said in a 51-page online report that Zhongwang Chairman Liu Zhongtian and his family have been siphoning money and products from the company to other countries.
Calling the report "malicious" and "groundless", Liaoning province-based Zhongwang said the allegations were "factually incorrect and defy normal commercial logic".
The company's stock was suspended on July 30 after Dupre, whose company website was set up last month, published the report.
Before resuming trading, Zhongwang's stock price last stood at HK$3.31 - down by 33 percent from this year's peak in April. As trading in the stock resumed on Aug 13, the price dropped by up to 18 percent before paring losses to end 12-percent lower at HK$2.9.
Lu Changqing, Zhongwang's executive director and vice-president, said the short-seller's report was "no big deal" for the company, which owns the most state-of-the-art production equipment among industry peers and enjoys a real price advantage over its international competitors.
The attack by short-sellers comes as exports of aluminum from the mainland soar, reflecting severe overcapacity at mainland aluminum smelters.
On Tuesday, the price of aluminum, which is used extensively in the railway, automotive and property industries, touched a new six-year low of $1,549.5 per ton on the London Metal Exchange (LME).
Lu said it's unreasonable to argue that the global glut and aluminum's bleak prospects have been exacerbated by exports of the metal from the mainland, where 90 percent of aluminum products are consumed in the domestic market.
If there's something unreasonable, Lu pointed out, that is China, currently accounting for a staggering 56 percent of global aluminum production with growth of 18 percent in the first half of this year, still having no say in aluminum prices on the LME.
Zhongwang shares closed 2.76 percent higher on Thursday at HK$2.98, compared to its debut price of HK$7 apiece in 2009.