China Sunsine Chemicals Holdings

The latest update of the company debt level, RMB 338.9 mil.

Base on my estimation, the debt level will be increased to a level between RMB 340 mil - 400 mil, both for working capital and new project ventures...

(not vested)

http://infopub.sgx.com/FileOpen/CS_Discl...eID=304451

I might have been too conservative with the 30% increase.
Given the latest info on the selling price of the product, I would think we have sufficient evidence to support the view that sunsine's 2Q results would be at least 100% better than last FY's same period. All in all, if the selling price continues to trend upwards, the full year results should be easily 50% to 100% better than last FY.

(The above view assumed that the company would not try to "frontload" costs to "negate" the positive performance.)

tks.
IMHO.

(07-07-2014, 11:20 AM)simpleman Wrote:

(05-07-2014, 08:01 AM)Curiousparty Wrote: I think we just let the company's actual results say for itself. this is really one of those RARE S chips that had not missed a single dividend payment and had not asked for more money (e.g. right issues) from shareholders since IPO. If actual results really turn out as mentioned in the article, its full results should be at least 50 to 100% better than last FY, and the trend is set to continue as the central govt went on clamping down the polluters with great resolute, as what they had done with corruption (albeit a bit slow on this front)...

Curiosparty
Since Nextinsight's RMB 43m 2Q profit is much higher thn your estimated 30% rise, does Curiousparty agree with the math used by Nextinsight.

Simpleman

Could someone more well-verse with sunsine give an assessment of whether this level of debt is sustainable?

many tks.

(07-07-2014, 09:07 PM)CityFarmer Wrote: The latest update of the company debt level, RMB 338.9 mil.

Base on my estimation, the debt level will be increased to a level between RMB 340 mil - 400 mil, both for working capital and new project ventures...

(not vested)

http://infopub.sgx.com/FileOpen/CS_Discl...eID=304451

(04-07-2014, 08:51 AM)CityFarmer Wrote: There was an article on NextInsight on the company, which might be interesting to some buddies here.

It is a good overview and analysis, but we should be caution when benchmarking the company with its peer in different exchange. IMO, PE benchmarking of SGX stock with SZSE stock, is meaningless, and might be misleading.

http://www.nextinsight.net/index.php/sto...e-than-100

(not vested)

I was away for a while and read the above article. Look like the product price have went up quite a bit. Today trading at 27.5 cents. I agreed that we shall not benchmark with its peer in different exchange, but we shall also not to dismiss the potential of the company.

Being the largest producer of rubber accelerator in the whole world, this counter has been underpriced for quite a while. It would probably run up to around 35 - 40 cents. this is where a lot of "buddies" will take profit, IMHO.

(14-07-2014, 03:22 PM)Young Investor Wrote:

(04-07-2014, 08:51 AM)CityFarmer Wrote: There was an article on NextInsight on the company, which might be interesting to some buddies here.

It is a good overview and analysis, but we should be caution when benchmarking the company with its peer in different exchange. IMO, PE benchmarking of SGX stock with SZSE stock, is meaningless, and might be misleading.

http://www.nextinsight.net/index.php/sto...e-than-100

(not vested)

I was away for a while and read the above article. Look like the product price have went up quite a bit. Today trading at 27.5 cents. I agreed that we shall not benchmark with its peer in different exchange, but we shall also not to dismiss the potential of the company.

There are merits on the company, thus worth a close monitoring, but the company has been suffering with oversupply in its market, thus the downward pressure on selling price since FY2011.

Will the overcapacity be solved by the recent tightening of anti-pollution measures? Well, it might help, but non-sustainable, IMO.

Well, I might be wrong.

(not vested, but monitoring)

(14-07-2014, 04:04 PM)CityFarmer Wrote: There are merits on the company, thus worth a close monitoring, but the company has been suffering with oversupply in its market, thus the downward pressure on selling price since FY2011.

Will the overcapacity be solved by the recent tightening of anti-pollution measures? Well, it might help, but non-sustainable, IMO.

Well, I might be wrong.

(not vested, but monitoring)

MBT is the feedstock for making three major rubber accelerators (TBBS, CBS and MBTS). Lax enforcement in the past led to many MBT factories being set up.

The sharp rise in MBT price, from RMB 13,700 per tonne to RMB 17,500, suggests tight supply following closure of some MBT factories which failed on environmental counts.

Before recent strict enforcement, Sunsine dealt with over-capacity in the rubber accelerator industry by slashing product prices in Dec 2011 to gain market share. Profit plunged to RMB 32m in 2012 (from RMB 99m the year before) as a consequence, but recovered to RMB 77m in 2013 as sales volume grew.

This strategy should see 2014 profit rising further even without government’s intervention.

Government’s action has reduced supply and levelled the playing field.

New investors have to comply with stringent pollution control requirements and incur the necessary costs. Over the years, Sunsine has accumulated experience in this area. In 2013, it cut down tap water usage and reduced waste water discharge, according to annual report 2013.

The graph in the Nextinsight 3 Jul article shows that prices of MBT-based products sold by a Shangdon-based factory spiked in June, peaked around the last day of the month:

………………ASP in 1Q 2014……….ASP in 2Q 14...…….Price on 30 June 14
TBBS…………..22,500………………….…24,000……….……………25,214
CBS…...........19,100…………………….21,000……………….…..22,650
MBTS...…….…16,300……..……………..19,800………..………...22,222

Prices have hardly changed after 30 June.

(07-07-2014, 09:40 PM)Curiousparty Wrote: Could someone more well-verse with sunsine give an assessment of whether this level of debt is sustainable?

many tks.

(07-07-2014, 09:07 PM)CityFarmer Wrote: The latest update of the company debt level, RMB 338.9 mil.

Base on my estimation, the debt level will be increased to a level between RMB 340 mil - 400 mil, both for working capital and new project ventures...

(not vested)

http://infopub.sgx.com/FileOpen/CS_Discl...eID=304451

Do you mean that borrowing is a good sign? The higher the borrowing, the higher the production rate? What are the new project ventures in the pipeline for chinasunsine? Thanks.

(15-07-2014, 03:51 PM)Young Investor Wrote:

(07-07-2014, 09:07 PM)CityFarmer Wrote: The latest update of the company debt level, RMB 338.9 mil.

Base on my estimation, the debt level will be increased to a level between RMB 340 mil - 400 mil, both for working capital and new project ventures...

(not vested)

http://infopub.sgx.com/FileOpen/CS_Discl...eID=304451

Do you mean that borrowing is a good sign? The higher the borrowing, the higher the production rate? What are the new project ventures in the pipeline for chinasunsine? Thanks.

I assume the questions are directed to me. FYI, I am the devil advocate in this thread.

Is the borrowing a good sign? No, in the context of this company, albeit borrowing doesn't always mean negative. In some cases, it is a very useful tool.

You might want to read the previous posts in this thread. The company has embarked on non-core business ventures recently.

http://www.valuebuddies.com/thread-2006-...l#pid69390

http://www.valuebuddies.com/thread-2006-...l#pid70203

(07-07-2014, 09:40 PM)Curiousparty Wrote: Could someone more well-verse with sunsine give an assessment of whether this level of debt is sustainable?

many tks.

(07-07-2014, 09:07 PM)CityFarmer Wrote: The latest update of the company debt level, RMB 338.9 mil.

Base on my estimation, the debt level will be increased to a level between RMB 340 mil - 400 mil, both for working capital and new project ventures...

(not vested)

http://infopub.sgx.com/FileOpen/CS_Discl...eID=304451

Do you mean that borrowing is a good sign? The higher the borrowing, the higher the production rate? What are the new project ventures in the pipeline for chinasunsine? Thanks.