China Sunsine Chemicals Holdings

[Bluechipfan]

China Sunsine has been doing well for all aspects except the “steam” business. They incurred a loss of $1.6 million in 2016. Would it be a startup loss? Any view from the rests? Thanks.

I may have missed it but I can't find the above in AR16 and 4Q16 reports. In any case, the majority of the steam generated are meant for internal consumption and any excess will be channelled to national grid for sale to external party. I think something like that was mentioned in one of the results briefings I attended. The latest is that they are adding one more boiler to cope with higher demand of steam. I think that is positive. 

In the upcoming FY17 results to be released in Feb 2018, I would cast the spotlight on top shareholders list. With the sales of treasury shares in May 2017, some 'institution' investors should made the top 20 list even if their holding is as low as around 1 million range. With extremely high volume (30m plus if I am right) traded right after the trading resumed following the sales of treasury shares, I want to see whether top holders like Robert Stone, Chia Kee Koon etc continue their original holdings, reduce/increase or bail out. Theses guys are holding in the range of 10m to 20m and their actions say a lot, especially with the subsequent developments when price hit the high of 1.09 and 'flash crash' to 92 cents on 14 Nov 2017 and further down to 82 cents on 6 Dec 2017. 

Of course, the price has slowly inch up again but I shall not focus on the share price, at least not at the moment. I am expecting to see stronger cash flow, higher ROE and eps. My holding is somewhat diluted with the sales of treasury shares and before the sales, I am confident eps will be at least 12.5 cents to 13 cents and now I think 12.5 cents may still be achievable. I am looking at dividend payout of at least 2.5 cents (including the .5 cents already paid) but somehow, I am inclined to believe that it would be more.

The RMB1.6 mil loss info can be found in the segment reporting table in page 14 of the 4QFY16 results announcement.

The table also disclosed that RMB72 mil and RMB4.8 mil were internal and external sales respectivley. Maybe some upside to the heating power/steam business in the future?

Sunsine's competitors, Yanggu Huatai and Tianjin Kemai, do not have internal steam generation capabilities.

Thanks for pointing out. With the additional boiler installed, perhaps Sunsine would be able to sell more excess to the external parties. If I recall correctly, the heating plant was set up by Sunsine on guidance/direction of local authority as Sunsine is the biggest plant in the industrial park and with the heating plant, it does not have to tax too much on national grid. Sunsine deemed it is more economical to build own plant and proceeded accordingly. It seems that all the plants in the industrial park has to use the steam generated by Sunsine and there could be some upside but already, Sunsine save a lot of the cost by using own steam.

[Bluechipfan]

http://www.chinasunsine.com/en/wp-conten...n-2018.pdf

CIMB initiated coverage with TP at $1.50

[kkayleng]

http://www.chinasunsine.com/en/wp-conten...n-2018.pdf

CIMB initiated coverage with TP at $1.50

The CIMB report also indicate a forecast of 1 billion rmb in cash reserves in Fy19 translating into  42 cents/share.

[tiongkokgor]

Local Chinese tire manufacturers met with rubber chemical producers in Hainan China in Dec 2017. The Chinese article in the link below mentioned that representatives from Yanggu Huatai and Tianjin Kemai were present in the meeting. The article did not mention China Sunsine.

https://mp.weixin.qq.com/s/15xIEOwiy_KlKAK4Gs8ilA

Key points from the article:

1) Shortage in supply of rubber accelerators.
2) Tire manufacturers want stable supply of high quality accelerators. Price not as important.
3) Environment protection laws pose many challenges to the rubber chemical producers with 2000+ regulations, multiple licence applications, scrutiny by other authorities like water and population with increase risk of relocation of factories, frequent enforcement, environment related taxes etc.

Sunsine with zero borrowings and big cash and bank balances should be able to handle the challenges better than its competitors like Yangu Huatai and Tianjin Kemai. Also China Sunsine adopted green technologies in its production way ahead of the competitors too.

Likely that Sunsine's production can help fill the gap in the supply while its competitors in the next 2-3 years, provided they can get the funds, licenses/permits and land.

[Bluechipfan]

Local Chinese tire manufacturers met with rubber chemical producers in Hainan China in Dec 2017. The Chinese article in the link below mentioned that representatives from Yanggu Huatai and Tianjin Kemai were present in the meeting. The article did not mention China Sunsine.

https://mp.weixin.qq.com/s/15xIEOwiy_KlKAK4Gs8ilA

Key points from the article:

1) Shortage in supply of rubber accelerators.
2) Tire manufacturers want stable supply of high quality accelerators. Price not as important.
3) Environment protection laws pose many challenges to the rubber chemical producers with 2000+ regulations, multiple licence applications, scrutiny by other authorities like water and population with increase risk of relocation of factories, frequent enforcement, environment related taxes etc.

Sunsine with zero borrowings and big cash and bank balances should be able to handle the challenges better than its competitors like Yangu Huatai and Tianjin Kemai.  Also China Sunsine adopted green technologies in its production way ahead of the competitors too.

Likely that Sunsine's production can help fill the gap in the supply while its competitors in the next 2-3 years, provided they can get the funds, licenses/permits and land.

[font=宋体]橡胶助剂专委会名誉理事长许春华在会议上作了讲话，[/font]

[font=宋体]Extract from the article. How can Sunsine's representative not there [/font]

[tiongkokgor]

Local Chinese tire manufacturers met with rubber chemical producers in Hainan China in Dec 2017. The Chinese article in the link below mentioned that representatives from Yanggu Huatai and Tianjin Kemai were present in the meeting. The article did not mention China Sunsine.

https://mp.weixin.qq.com/s/15xIEOwiy_KlKAK4Gs8ilA

Key points from the article:

1) Shortage in supply of rubber accelerators.
2) Tire manufacturers want stable supply of high quality accelerators. Price not as important.
3) Environment protection laws pose many challenges to the rubber chemical producers with 2000+ regulations, multiple licence applications, scrutiny by other authorities like water and population with increase risk of relocation of factories, frequent enforcement, environment related taxes etc.

Sunsine with zero borrowings and big cash and bank balances should be able to handle the challenges better than its competitors like Yangu Huatai and Tianjin Kemai.  Also China Sunsine adopted green technologies in its production way ahead of the competitors too.

Likely that Sunsine's production can help fill the gap in the supply while its competitors in the next 2-3 years, provided they can get the funds, licenses/permits and land.

[font=宋体]橡胶助剂专委会名誉理事长许春华在会议上作了讲话，[/font]

[font=宋体]Extract from the article. How can Sunsine's representative not there [/font]

Thanks for highlighting that.

i did not comsider Xu chunhua a representative because she is an independent director and not part of management of China Sunsine.

Xu may also be a director of other rubber chemical companies. So cant say she is a representative of these companies too.

The article only mentioned she is from some rubber accelerator commitee.

[JonRobin]

Hi Guys, Do we know when will next company report (the same one that was released Nov 12 2017) will be publicized? Or is this date not pre-determined and just suddenly is done? I will appreciate it greatly.

[ricklim1]

Hi Guys, Do we know when will next company report  (the same one that was released Nov 12 2017) will be publicized?   Or is this date not pre-determined and just suddenly is done?  I will appreciate it greatly.

If you are referring to the quarterly financial statement the next report should be out by end Feb 2018.

[kkayleng]

Hi Guys, Do we know when will next company report  (the same one that was released Nov 12 2017) will be publicized?   Or is this date not pre-determined and just suddenly is done?  I will appreciate it greatly.

If you are referring to the quarterly financial statement the next report should be out by end Feb 2018.

[kkayleng]

Bloomberg) -- Phillip Securities initiated coverage of
China Sunsine Chemical Holdings Ltd. with a recommendation of
buy.
Phillip Secs predicted China Sunsine Chemical Holdings will
trade at S$1.60 within a year, implying a 43 percent increase
from the last regular trade. The new target is 11 percent above
the consensus average of S$1.44 and is at the high end of
forecasts ranging from S$1.25 to S$1.60. China Sunsine Chemical
Holdings had 3 buy recommendations, 0 holds and 0 sells
previously.
Analysts raised their consensus one-year target price for
the stock by 4 percent in the past three months. Forecasts range
from S$1.25 to S$1.60.