China Sunsine Chemicals Holdings

Collected a bit more recently over a few days. Seller is Istinet. Don't know they are the only seller or happen that my shares all from them. Just for sharing sake. By the way, a local based finance institution has also taken a stake recently in sunsine.

(06-02-2016, 01:25 PM)Bluechipfan Wrote: Collected a bit more recently over a few days. Seller is Istinet. Don't know they are the only seller or happen that my shares all from them. Just for sharing sake. By the way, a local based finance institution has also taken a stake recently in sunsine.

I also collected some, also from instinet. Have been vested since last year.

I am impressed by its 3Q results, and I am looking forward to its FY results.

By the way, care to share where you got the information regarding the local based finance instituition?

(06-02-2016, 02:37 PM)ash902 Wrote:

(06-02-2016, 01:25 PM)Bluechipfan Wrote: Collected a bit more recently over a few days. Seller is Istinet. Don't know they are the only seller or happen that my shares all from them. Just for sharing sake. By the way, a local based finance institution has also taken a stake recently in sunsine.

I also collected some, also from instinet. Have been vested since last year.

I am impressed by its 3Q results, and I am looking forward to its FY results.

By the way, care to share where you got the information regarding the local based finance instituition?

Hi, PM you.

The company released its 1Q2016 report recently.

The company business remains under-pressured with a lower Average Selling Price (ASP), but has maintained its market share both in China, and export markets. The ASP is the lowest in the last ten quarters tracked, and in an obvious downtrend since 3Q2014.

The fall in ASP, isn’t due to resumption of supply from those hit by the stringent environment regulation, but a higher competition among those still in operation. The anti-dumping duty on tire export and lower China economic growth has made the company to lower prices, to maintain its market share. Net profit has reduced by -29% y-o-y.

China Sunsine continues to grow the sales volume in 1Q2016
 Revenue expanded to RMB445.1 million
 Net profit declined to RMB 33.6 million
 Sales volume continued to grow to 30,051 tons in 1Q2016 as compared to 25,377 tons in 1Q2015
...
http://infopub.sgx.com/FileOpen/China_Su...eID=401030

(not vested, but actively monitoring)

Cityfarmer might have missed Sunsine's commentary on significant trends and competitive conditions of the industry that may affect the group in the next reporting period and the next 12 months:

"International crude oil prices have remained depressed, which has resulted in our main raw material prices remaining at low levels. However, as the China tire industry generally experienced under-utilisation issues during the second half of 2015, which may have depleted their inventory levels, the Group believes that utilisation rate of tire industry will increase starting from 2Q2016, which will indirectly increase the demand for our products, and may have a positive effect on our ASP in subsequent quarters."

(28-04-2016, 04:50 PM)Young Investor Wrote: Cityfarmer might have missed Sunsine's commentary on significant trends and competitive conditions of the industry that may affect the group in the next reporting period and the next 12 months:

"International crude oil prices have remained depressed, which has resulted in our main raw material prices remaining at low levels. However, as the China tire industry generally experienced under-utilisation issues during the second half of 2015, which may have depleted their inventory levels, the Group believes that utilisation rate of tire industry will increase starting from 2Q2016, which will indirectly increase the demand for our products, and may have a positive effect on our ASP in subsequent quarters."

I didn't miss it, but I have put lower weight on the statement. There might be a good reason for the inventory depletion of tire industry. One possibility might be the anti-dumping duty.

Well, I might be wrong, and let's see.

(not vested)

(28-04-2016, 04:50 PM)Young Investor Wrote: Cityfarmer might have missed Sunsine's commentary on significant trends and competitive conditions of the industry that may affect the group in the next reporting period and the next 12 months:

"International crude oil prices have remained depressed, which has resulted in our main raw material prices remaining at low levels. However, as the China tire industry generally experienced under-utilisation issues during the second half of 2015, which may have depleted their inventory levels, the Group believes that utilisation rate of tire industry will increase starting from 2Q2016, which will indirectly increase the demand for our products, and may have a positive effect on our ASP in subsequent quarters."

Since I started to vest in Sunsine, I realised they always call a spade a spade. They did not try to paint a rosy picture even throughout the exceptional FY2014. In fact, they started sounding the 'warning' and highlighted the causes for the steep increase of profit such as competitors failing to comply with stricter environment law, high ASP due to mismatch of raw material price and the then product market price. They also forewarn on the US anti dumping law against Chinese tire makers and its effect on company's earning. All in all, I think Sunsine is being managed by a competent management. I take note of their 30,000 tons TBBS expansion plan and if the company keep gaining market share, it will be harvest time when economy conditions eventually improved. As of now, ASP is under pressured but when time is right, ASP will also go up. In the meantime, the company will do well to stay focus to gain market share and to remain profitable and continue to reward their loyal shareholders with regular dividend payout.

Hi Cityfarmer,
Why is anti-dumping duty a good reason for inventory depletion in the tyre industry? I thought it would slow down inventory depletion. Thanks.

(28-04-2016, 05:01 PM)CityFarmer Wrote:

(28-04-2016, 04:50 PM)Young Investor Wrote: Cityfarmer might have missed Sunsine's commentary on significant trends and competitive conditions of the industry that may affect the group in the next reporting period and the next 12 months:

"International crude oil prices have remained depressed, which has resulted in our main raw material prices remaining at low levels. However, as the China tire industry generally experienced under-utilisation issues during the second half of 2015, which may have depleted their inventory levels, the Group believes that utilisation rate of tire industry will increase starting from 2Q2016, which will indirectly increase the demand for our products, and may have a positive effect on our ASP in subsequent quarters."

I didn't miss it, but I have put lower weight on the statement. There might be a good reason for the inventory depletion of tire industry. One possibility might be the anti-dumping duty.

Well, I might be wrong, and let's see.

(not vested)

(29-04-2016, 09:38 AM)Sfsh12 Wrote: Hi Cityfarmer,
Why is anti-dumping duty a good reason for inventory depletion in the tyre industry? I thought it would slow down inventory depletion. Thanks.

The China tire companies, were rushing to sell, before the duty is imposed by US. What do you think on the reasoning?

(not vested)

P/S: Put a lower weight on Chairman statement, is not casting a doubt on his integrity, but just having a diff opinion from his. I have a similar doubt on Chairman Ren's statement of YZJ on shipping future. Mr. Ren is well-respected as a person with integrity, which I share. 

We could be thinking about different anti dumping duties. U.S. anti dumping duties on China passenger car tyres was in place for the most of 2015. Anti dumping duties on light truck tyres are now being considered and if successful may be implemented 2nd half of 2016. However light truck tyres are a smaller proportion of China tyre exports to US.

(29-04-2016, 09:48 AM)CityFarmer Wrote:

(29-04-2016, 09:38 AM)Sfsh12 Wrote: Hi Cityfarmer,
Why is anti-dumping duty a good reason for inventory depletion in the tyre industry? I thought it would slow down inventory depletion. Thanks.

The China tire companies, were rushing to sell, before the duty is imposed by US. What do you think on the reasoning?

(not vested)

P/S: Put a lower weight on Chairman statement, is not casting a doubt on his integrity, but just having a diff opinion from his. I have a similar doubt on Chairman Ren's statement of YZJ on shipping future. Mr. Ren is well-respected as a person with integrity, which I share.