August 1 -- Taiyuan Twin Tower Aluminum Oxide (000795), a maker of rare earth permanent magnet materials and related products, posted a 670 percent year-on-year rise in first half 2011 net profit to 16.62 million yuan, reports Securities Times, citing a company filing. Revenue rose 78 percent to 580 million yuan.

The company forecasts net profit to surge 880-1,000 percent year-on-year in the first three quarters to 22-25 million yuan.

The price of rare earth minerals, major raw materials for the company's production, had risen in recent years and had increased the cost of the production.

However, revenue from its major product, NdFeb Magnetic material, increased 101 percent year-on-year to 511 million yuan in the first half due to higher prices, contributing 88 percent of its total revenue.

A subsidiary recorded a 199 percent year-on-year increase in pre-payments in the first half due to good sales.

A competitor of Twin Tower, Beijing Zhongke Sanhuan High-tech (000970), forecasts that first half net profit may have grown 75-125 percent year-on-year to 132-169 million yuan due to strong demand.

An analyst said the surge in rare earth prices may lead to integration in the rare earth processing sector, as based on the current prices, processing companies will need at least 10 million yuan in operating capital.

Source:capitalvue