China Sunsine Chemical Holdings has reported an “overall improvement” in its performance for the 3QFY2020 ended Sept 30 on the back of China’s strong economic recovery from July to September.
Sales revenue for the quarter came in at around RMB600 million ($122.3 million) while sales volume reached “another record high” of some 46,000 tons.
The group, which added another 20,000-ton TBBS capacity in May, had a capacity utilisation rate of 95% for the quarter.
The group reported an improvement in gross profit margin to 28.3% from 23.2% in 1HFY2020.
See: Continue to 'add' China Sunsine as negatives priced in: CGS-CIMB
While average selling price (ASP) for the 3QFY2020 did not improvement q-o-q, there was an increase in the prices of raw materials since the end of September 2020. As such, the group’s ASP has been “increasing correspondingly”.
On that, the management believes that, barring unforeseen circumstances, the group’s performance for 2HFY2020 “would be better” than that of the 1HFY2020.
Looking ahead, the group expects China’s overall economic recovery and recovery in its auto market would benefit its business while another wave of Covid-19 cases in the US and Europe could lower demand from its overseas customers.
“Nevertheless, the group will continue with its strategy of ‘sales production equilibrium’, and at the same time, will seek to improve its sales and take the necessary steps to make raw material consumption more efficient, control cost, eliminate wastage, and strengthen its cash flow management in order to achieve sustainable growth,” it says in a Nov 16 statement.
For more stories about where the money flows, click here for our Capital section
“Given our strong balance sheet and financial position, our market leadership position, our 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 remain confident about the Group’s profitability in the next 12 months,” it adds.
Shares in China Sunsine closed flat at 46.5 cents on Nov 16.
