China Sunsine Chemical Holdings says it has seen an “overall improvement” y-o-y in the 1QFY2021 as it recorded sales revenue of RMB840 million ($171.7 million), 66% higher y-o-y.
Gross profit margin (GPM) reached 31.6%.
Net profit surged 274% y-o-y to RMB125 million.
Sales volume during the quarter reached another high of around 47,000 tonnes. The overall capacity utilisation rate stood at around 98%.
The higher figures were mainly due to the increase in the average selling prices (ASPs) of the group’s products as a result of the increase in the price of raw selling materials.
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It was also attributable to the increase in sales volume due to higher demand on the back of the recovering Chinese economy.
The group says its expansion projects are going ahead according to their respective schedules.
That said, it expects “relatively weaker demand” in the months ahead.
“As we enter April 2021, prices began to fall, mainly due to raw material prices beginning to descent from their high levels as a result of sufficient supply. Downstream tire manufacturers had [already] placed large orders in February and March 2021,” writes the group.
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It adds that the rubber chemicals industry is also undergoing consolidation, with bigger players achieving good profits beginning to increase their production capacities.
“Therefore, market competition is becoming more intensified and smaller players may be squeezed out of the market. Environmental protection and safety production requirements continue to be more and more stringent. All these require us to work harder, and be more cautious and vigilant in our daily operations,” says the group.
Shares in China Sunsine closed 0.5 cent higher or 0.9% up at 58 cents on April 29.
