Tiangong International Co. Ltd. (00826.HK) is shifting its focus to cost control from asset expansion, the Hong Kong Economic Journal reported Thursday, citing chairman Zhu Xiaokun.
The move comes after the maker of special steel experienced heavy selling last month after a financial magazine accused the company of exaggerating its gross profit margin, covering up certain capital expenditure and holding excessive inventory.
Tiangong shares lost 22 percent in the wake of the magazine report, forcing a trading suspension. The stock rebounded 15 percent when it resumed trading a week later.
The company will ramp up the utilization rate of its facilities and improve the technology content of its products, Zhu said.
It plans to cut its inventory turnover to 180 days by the end of the year from 241 days last year and expects stable growth in profit margin.
Meanwhile, Zhu has invested HK$48.61 million (US$6.27 million) to buy 29.76 million shares in the company.
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