The Chiho Group is optimistic about an increase in the scrap metals business owing to China’s announcement to become carbon neutral by 2060, as announced in the country’s 14th Five-Year-Plan.
The recycling company noted in its business update that also gave the preliminary financial results that its joint venture with the China Hongqiao Group (Hongqiao) in Binzhou began construction in February 2021. The new plant will have capacities to recycle 100,000mt end-of-life vehicles (ELVs) and mixed metals and produce 500,000mt of secondary aluminum per year.
This plant is expected to get commissioned towards the end of 2021 with the first pour of aluminum liquid. The first phase of the ELV and mixed metals recycling line will go live in Q2 2022, the company indicated.
The JV with Hongqiao also includes a recycling facility for lithium-ion batteries used in electric vehicles and a research and development project on the use of hydrogen in steel production.
Chiho indicated that it expects an 83pc increase in revenue during H1 2021, in the range of HK$10.7-11.3bn ($1.37-1.45bn) while gross profit is expected to jump by 186pc to HK$900mn to HK$1bn during the same period, both compared to H1 2020. EBITDA for the period under comparison is expected to rise to HK$660mn from HK$57mn.
Chiho also announced the appointment of Tom Bird as the chief trading officer in its Interim business update.