Lizhong Wheel Group, the manufacturer of aluminum alloy wheels in China, says net profit more than tripled to RMB15.7 million for the 3 months ended 30 September 2010 (3Q10), from RMB4.6 million in 3Q09. The surge in net profit was built upon strong sales growth from all business segments, which boosted revenue by 66.0% to RMB377.7 million in 3Q10 from RMB227.5 million in 3Q09.

Revenue growth was driven mainly by an increase in revenue from Lizhong Wheel’s OEM business segment of almost RMB100.0 million yoy to RMB248.5 million in 3Q10, as the group benefited from the buoyant Chinese automotive market. The group also saw sales for its export business segment more than double to RMB93.4 million, in line with the recovery in the global auto market.

In line with the increase in sales, gross profit rose 59.8% to RMB52.8 million in 3Q10 from RMB33.0 million in 3Q09. However, the gross profit margin dipped slightly to 14.0% in 3Q10 from 14.5% previously, as the pick-up in demand led to outsourcing of some production to an associate. This was mitigated by an improvement in the price of aluminum, a key raw material. Prices of aluminium declined from an average of RMB15,900 per ton in 2Q10 to RMB15,026 per ton in 3Q10.

Barring any unforeseen circumstances, Lizhong Wheel expects to maintain profitability in FY2010.