China Sunsine Chemical Holdings has reported 11% high earnings for the 2HFY2020 ended December of RMB136.4 million ($27.9 million), compared to earnings of RMB123.0 million in 2HFY2019.
For the full-year, earnings fell 44% to RMB218.8 million from RMB388.9 million in FY2019 due to lower revenue arising from lower average selling prices (ASPs).
The lower ASPs were a result of lower raw material prices and the impact of Covid-19.
Earnings per share (EPS) for the 2HFY2020 grew 12% y-o-y to 14.04 RMB cents and 43% lower y-o-y for the FY2020 to 22.50 RMB cents.
Group revenue for the 2HFY2020 increased 1% y-o-y to RMB1.29 billion due to the higher sales volume, but was offset by the lower ASP.
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ASP fell 9% y-o-y to RMB13,579 per tonne, from RMB14,877 per tonne a year ago, mainly due to the lower raw material prices and higher competition in the rubber chemicals industry.
Sales volume was up 10% y-o-y to 93,556 tonnes.
Gross profit rose 22% y-o-y to RMB358.4 million, with gross profit margin (GPM) improving by 4.9 percentage points to 27.8%.
Profit before tax increased by 40% y-o-y to RMB185.6 million due to higher gross profit and lower expenses.
FY2020 revenue fell 13% y-o-y to RMB2.33 billion mainly due to the lower ASP, which fell by 15% y-o-y to RMB13,571 per tonne compared to RMB15,970 per tonne.
FY2020 sales volume was up to a record high of 169,876 tonnes.
Gross profit for the FY2020 fell 23% y-o-y to RMB600.3 million, while GPM fell 3.3 percentage points to 25.7%.
FY2020 other income plunged 82% y-o-y to RMB8.5 million mainly attributable to interest income, gain on bargain purchase of a subsidiary, and offset by foreign exchange loss of RMB18.1 million due to depreciation of USD against the RMB.
Profit before tax for the FY2020 fell 34% y-o-y to RMB300.5 million mainly due to the lower revenue arising from lower ASP, especially in 1HFY2020.
As at end-December, cash and cash equivalents stood at RMB1.32 billion.
SEE: China Sunsine says its performance for 2H would outperform its 1H results in 3Q business update
For the 2HFY2020, a final dividend of 1 cent per share has been proposed, same as last year.
“As we enter 2021, we are seeing positive signs from the downstream demand; the rubber chemicals industry is further consolidating and raw material prices are increasing. All these factors will provide support for our ASP. With our two major expansion projects slated for completion in 2021, we will be able to strengthen our market leadership position further. Coupled with our other competitive advantages, such as our strong balance sheet and financial position, ability to provide high-quality products, large-scale production, a variety of product range of rubber chemicals, and compliance with national environmental protection laws and regulations, we are confident about the group’s profitability in the next 12 months," says executive chairman Xu Cheng Qiu.
Shares in China Sunsine closed 1.5 cents higher or 3.2% up at 49 cents on Feb 25.
