SINGAPORE (April 29): China Sunsine Chemical Holdings announced a 26% y-o-y decrease in 1Q earnings to RMB110.2 million ($22.3 million) from RMB149.5 million a year ago, due to lower revenue as a result of reduced average selling price (ASP) for rubber chemicals.
Group revenue for the quarter slid 20% to RMB686.6 million from RMB856.9 million in 1Q18, as ASP slid 24% over 1Q to RMB17,637 per ton from RMB23,168 previously.
The lower ASP was mainly attributed to lower raw material prices.
Nonetheless, sales volume rose 5% to 38,715 tons from 36,797 tons a year ago, due mainly to increased production on the back of strong overseas demand, as well as the group’s flexible pricing strategy.
Cash and cash equivalents as at end-March stood at RMB1.17 billion as opposed to RMB504.7 million a year ago.
China Sunsine also highlights its ability to maintain its gross profit margin at a “satisfactory” level of 34.6%, down just 0.6 percentage point from 34.9% in 1Q18.
Looking ahead, the group says it remains cautiously confident of its performance and profitability for the next 12 months.
“As raw material prices are hovering at lower levels, the group’s ASP for rubber chemicals came under pressure. At the same time, as some players have resumed their operation after investing more in technological upgrading and environmental protection & safety production equipment, competition is expected to be more intense for some of our products, which will further challenge our ASP,” comments executive chairman Xu Cheng Qiu on the group’s latest set of results.
“We will continue to maintain our strategy that ‘higher production leads to higher sales volume, which in turn stimulates even higher production’. We will expand capacity to gain more market share in the rubber chemicals industry. We will also continue to focus on environmental protection and safety production, as well as production technology and innovation, to gain a competitive edge over other producers,” he adds.
Shares in China Sunsine closed 2 cents higher at $1.19 on Monday.
