China Sunsine Chemicals Holdings

[mslee888]

Great 1st Qtr results.

http://infopub.sgx.com/FileOpen/China_Su...eID=346378

[CityFarmer]

A brief look into the 1Q result. The ASP has gone lower as expected, back to FY2013 level. I am expecting it will go lower than that. The overall profit growth, was due to the lower raw material cost, especially the Aniline. It seems the cost saving was not transferred to customer. I reckon the same will happen when raw material cost go up.

(not vested)

[CityFarmer]

The company 1H 2015 result is announced.

http://infopub.sgx.com/FileOpen/2Q2015%2...eID=364263

The overall ASP has normalized back to ~16K/ton, from the peak of more than 20K/ton in 3Q2014. The gross margin has also normalized back to around 25%, from a peak of more than 30% in 3Q2014. Will the ASP, and the gross margin go down further? Let's see the next few quarters performance.

Let me end this post with the following comment in the 2Q report.

"In July 2015, the US Department of Commerce announced the imposition of punitive duties on certain
Chinese tire manufacturers following the issuance of the final decision by the US International Trade
Commission confirming anti-dumping and countervailing duty rates on the importation of Chinese
passenger vehicle and light truck tires.3 The imposition of such duties may adversely affect the China
tire industry at a time when the China tire industry is still facing over-capacity and under-utilisation issues,
which may dampen demand for our rubber chemical products.

With the international crude oil prices remaining depressed, which has resulted in our main raw material
prices remaining at low levels, our selling prices may continue to come under pressure. However, due
to the current stringent environmental regulations in China, there may be further consolidation in the
rubber chemicals industry, which may benefit us."

(not vested, but monitoring)

[piaopiao]

Just want to share this article from Nextinsight with its link below.

http://nextinsight.net/index.php/story-a...s-compares


1 of Sunsine's closest competitor which is based in Tianjin, Kemai, is unable to build a new base for accelerator production in Inner Mongolia with a capacity of 80,000 tonnes after its plan for an IPO is delayed. There is a link to Kemai's draft IPO prospectus in the article.

Looks like Sunsine will be widening its lead with more customers, sales and a bigger market share.

[CityFarmer]

Will the tax cut, benefit the company, and other auto-related companies?

China cuts tax on small-engine cars to revive market
30 Sep 2015 10:33
[BEIJING] China has decided to halve sales tax on small cars from Thursday, boosting local auto shares, as the government tries to revive growth in the world's largest car market.

The tax cut will run until the end of 2016 and apply to cars with 1.6-litre engines or smaller, a segment that accounts for nearly 70 per cent of total sales in China.

The move, announced by cabinet late on Tuesday, sent shares of major Chinese automakers higher on Wednesday, with Great Wall Motor jumping 5 percent in Shanghai in early trade. Its Hong Kong stock surged more than 10 percent.

Other carmakers BYD, BAIC Motor and SAIC Motor also rose sharply.
...
REUTERS

Source: Business Times Breaking News

[CityFarmer]

The 3rd Q result is coming soon. Let's see the performance. Will the overall ASPs continue in down-trend?

(not vested, but monitoring)

----------
SINGAPORE, 23 October 2015 - The Board of Directors of China Sunsine
Chemical Holdings Ltd. (the “Company”) wishes to inform that the Company will
release its financial results for the third quarter ended 30 September 2015 on
Monday, 9 November 2015.
...
http://infopub.sgx.com/FileOpen/Notice%2...eID=374761

[DCF]

The 3rd Q result is coming soon. Let's see the performance. Will the overall ASPs continue in down-trend?

(not vested, but monitoring)

----------
SINGAPORE, 23 October 2015 - The Board of Directors of China Sunsine
Chemical Holdings Ltd. (the “Company”) wishes to inform that the Company will
release its financial results for the third quarter ended 30 September 2015 on
Monday, 9 November 2015.
...
http://infopub.sgx.com/FileOpen/Notice%2...eID=374761

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

[CityFarmer]

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)

[DCF]

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

[Bluechipfan]

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.