China's Leoch International posts H1 profit record powered by lead batteries, recycling

by John Shepherd
5G expansion 'will spur further growth for back-up batteries supporting data centres and telecoms'. Photo: Leoch
Lead-acid battery sales helped China-based Leoch International Technology post a record first-half profit of CNY 44.5m (£5m), according to interim results.

The figure for the period up to 30 June 2021 was an increase of 234% over the corresponding period last year. Profit before tax was CNY 55.5m.

Income from the group's power solutions business increased by nearly 25% to CNY 4.25bn (£479m), compared to CNY 3.4bn in the corresponding period last year.

The power solutions division includes back-up batteries, starter batteries and e-bike batteries. Leoch said back-up batteries accounted for 39.1% of total first-half sales, while starter batteries were the second largest contributor to revenue, accounting for 27.5% of total sales.

Lead recycling

Mainland China accounted for the bulk of the group’s revenue during the period at nearly CNY 3.2bn (compared to CNY 2.3bn in the year-ago period), followed by the EMEA region at CNY 1bn (CNY 660m).

Income from the recycling of lead products amounted to CNY 932.5m – an increase of 234.5% over the corresponding period last year.

Costs included CNY 172.4m on R&D; and other expenses of  CNY 26.4m, partly to improve and develop new products.

Leoch said that while China’s economy was maintaining a "steady recovery” in the wake of the pandemic, data from the National Bureau of Statistics of China indicated an upcoming decline in investment growth, with "downward pressure” on the economy expected in the second half of 2021.

Back-up power

However, the group said a "new investment cycle” in fifth generation (5G) mobile telecoms networks in China would spur further growth in the back-up power solutions market to support data centres and the telecommunications sector.

"China leads the world in 5G construction and advanced deployment of next-generation ultra-high-speed telecommunications technology,” Leoch said.

According to the group, the total number of 5G base stations deployed in China is expected to reach 1.7 million by the end of 2021.

Chairman Dong Li said earlier this year the group was focused on further expansion and investment, including new lead and lithium battery products.

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