China Sunsine Chemicals Holdings

(24-10-2015, 11:35 AM)DCF Wrote:

(23-10-2015, 09:26 PM)CityFarmer Wrote:

(23-10-2015, 08:45 PM)DCF Wrote: Management has guided price trend will follow oil price trend. What will be interesting are:

the increase in volume, which leads to bigger bottom line and their increase in market share

the improvement in margin, if they continue their process and automation improvement, and the increase in steam and electricity sales

the progress in their plan for the next factory

Based on my record

Last TTM quarterly revenue (top-line) in RMB million: 582.2, 523.1, 432.1, 497.3
Last TTM quarterly net profit (bottom-line) in RMB million: 83.0, 54.2, 47.4, 47.1
Last TTM quarterly overall ASP in RMB K/ton: 20.1, 19.7, 17.1, 16.0

I saw different picture from you, in the last 4 quarters.

(not vested, but interested)

Isn't the ASP dropping like oil price? from 20.1 to 16.0 in your calculation?

To be exact, the co-relation is with Aniline, the main raw material for making accelerator, and a by-product of oil refinary. The logical link is clear, as Sunsine's customers are all big companies that know the industry very well. Unless there is a abrupt supply drop like the closure of polluting factories, they will not tolerate a fat margin from their normal supplier. The actual price may be off a bit because of time lag between Aniline price drop and accelerator price drop; dependancy on product mix (if they sell more TBBS and CZ, which have higher selling price of up to 27-29RMB/ton, the average ASP will be higher), etc... But the general trend is accelerator ASP will follow Aniline price trend, which follow crude oil price trend. 

Oil price has stabilised.  Aniline price also stablised between 6.5 to 7.0RMB/Kton, so Sunsine ASP should stabilised as well. Hence I'm looking for others as catalyst for this good company. They have trenmendous scale and knowledge advantage, which allow them to win market share and expand to related business. Hence those are the things I'm looking for

The management has given the guidance to oil price, but I am not very sure it is the only contributor, but I have to agree oil price is a contributor.

I reckon, the down-trend of the net profit in the last four quarters, isn't a concern at all to you? The company has not only shared the saving in material cost, but also the net profit? 

(not vested)

(24-10-2015, 11:49 AM)Bluechipfan Wrote: CF has been monitoring this company for very long, apparently he is still not convinced. Sunsine is market leader and they are still keen on expansion. They have secured another site to build new factory and is currently pending authority's approval. While expansion plan is on track, the debt level has come down. In fact, they just turn net cash last quarter. More importantly, they have been paying regular dividend since listed and has increased dividend rate the preceding year. In a nutshell, they have payout more dividend than the capital they raised in the market. I am cautiously optimistic about this company. Likely to continue to vest and could adjust percentage of holding where appropriate. Had pick up a bit more when price slump close to 30 cents.

Very long (time)? I had followed Sheng Siong during its IPO in 2010, and only started to accumulate 4 years later in 2014, when I have cleared most doubts. I have lost tracked when I started to track this company, may be in 2012, still not the longest record yet...

I am playing devil here. I agree the company is a quality one, otherwise it will not stay in my watch-list for years. 

3Q results coming up soon. Wonder how will Sunsine perform this quarter? 3Q2014 net profit was RmB83m.

Unlikely to hit rmb 83 millions. Sunsine is able to maintain top line despite stiff competition and unfavourable economy condition but bottom line suffer due to narrowing of profit margin. I would say if they achieve net profit of around rmb 66 millions it will be good. I hope for 70 millions or more nonetheless. Importantly, the company is now net cash so the key is for it to continue generate free cash flow. Once the company is debt free, which they should if no expansion plan in the near future, we can expect sustainable dividend and appreciation of share price. However, it seems that expansion plan is still very much in the pipeline but sunsine should be able to fund it with internal resources.

Achieving a 3Q profit much higher than 2Q's (RMB 47M) will be a tall order, in my view.

If 1st half profit of RMB 94.5m is repeated in 2nd half, a full-year profit of RMB 189m will be good enough because EPS will be 8.8c, and PE will be a low of 4.2. 

We shall find out on Monday. No positive nor negative profit guidance. I will accept rmb 60 millions.

The US anti-dumping duties on China tires, will weight on the company sales, on top of an already over-capacity market. The duties started in mid 2015, and probably the Q3 report is the 1st report to reflect the impact.

(not vested, a devil advocate)

(04-11-2015, 09:08 PM)Bluechipfan Wrote: We shall find out on Monday. No positive nor negative profit guidance. I will accept rmb 60 millions.

http://infopub.sgx.com/Apps?A=COW_CorpAn...-Final.pdf

How ah? jelek?

Not vested

Sunsine once again managed to increase sales volume and maintain market leader position. It's beyond their control with the lower ASP. You either lower ASP to retain and attract customers or lose market share. Not too shabby as the margin, thought got squeeze, still a healthy 26.8%. Net profit of rmb 55 millions is more than sgd 10 millions. Looking forward to whole year profit of sgd 40 millions which will translate to EPS of close to sgd 10 cents. With the fast receding debts and fast increasing cash and cash equivalents on its BS, I still hold the same cautionary optimistic view. Year end dividend of 1.5 cents should give me the confidence of continuing to vest in Sunsine.

(09-11-2015, 09:08 PM)Bluechipfan Wrote: Sunsine once again managed to increase sales volume and maintain market leader position. It's beyond their control with the lower ASP. You either lower ASP to retain and attract customers or lose market share. Not too shabby as the margin, thought got squeeze, still a healthy 26.8%. Net profit of rmb 55 millions is more than sgd 10 millions. Looking forward to whole year profit of sgd 40 millions which will translate to EPS of close to sgd 10 cents. With the fast receding debts and fast increasing cash and cash equivalents on its BS, I still hold the same cautionary optimistic view. Year end dividend of 1.5 cents should give me the confidence of continuing to vest in Sunsine.

3Q2014 results of net profit RMB 83 mil was a record. Average selling price (ASP) across all products was RMB 20,142 per ton. Sales volume 28,905 tons. GP margin 31.1%


But my reference point is its 4Q2012 results, worst results since 2007 IPO, a net loss of RMB 0.9 mil. ASP was RMB 17,650 per ton, sales volume 21,190 tons and GP margin 14.2%.



3Q2015 ASP RMB 16,279 per ton. Sales volume 29,203 tons. GP margin 26.8%. Net profit RMB 55.3 mil.

ASPs for insoluble sulphur and anti-oxidant in 3Q2015 of RMB 9,815 and RMB 12,543 per ton respectively are lower than 4Q2012 ASPs of RMB 11,209 and RMB 15,309 but the company made up the drop by increasing IS sales and anti-oxidant sales by 32% and 232% respectively.

3Q2015 results is again another testimonial to the quality of the management in China Sunsine. Impeccable execution of its strategies in diversifying into more products, managing costs, gaining more market share and recovering from its doldrums.