China Sunsine Chemicals Holdings

[Curiousparty]

looks like China Sunsine is going to fall off the cliff at 20 cents....not much support/bid below..

[CityFarmer]

For those vested and those have doubts, there is an opportunity to clarity with the CFO face-to-face ...

(not vested)
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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 second quarter ended 30 June 2013 on Monday, 5 August 2013 after market hours.

To provide an update on the Company’s performance, the Company will hold a results briefing on Tuesday, 6 August 2013 at 3.00 pm at Urban Fairways, 168 Robinson Road, Capital Tower #01-07, Singapore 068912.

http://infopub.sgx.com/FileOpen/Notice_o...eID=249648

[Stockerman]

looks like market did not expect the results to be good, especially with the quitting of the CFO...

[Stockerman]

In short, profit margin continued to be pressured. The company cited overcapacity in the auto/tyre makers, and there is hard to pass on cost increases to its clients.
Bad news for Sunsine...


******
Average Selling Price (“ASP”) for all products slightly decreased from RMB 17,801 per ton in 2Q2012 to RMB 17,233 in 2Q2013. The ASP decrease was in line with the Group’s marketing strategy to expand its market share. The overall gross profit margin slid to 18.6% from 20.0% in 2Q2012 due to higher raw material costs.

The rubber chemicals industry, on the other hand, has continued to face an overcapacity problem. Although the costs of raw materials dipped slightly in the second quarter, the market continues to face upward cost pressure. The market in general is facing pressure in profit margin as it is difficult to pass on the higher cost to customers, namely tyre makers. The automakers are facing overcapacity issues due to past years of aggressive expansion.

[Stockerman]

Since China Sunsine is in the rubber chemicals industry with lots of spare capacity, would it also be the next target of the central govt? Furthermore, these rubber chemical industries are very pollutive in general.

*************
[HONG KONG] Chinese steelmakers led by Baoshan Iron & Steel Co Ltd are likely to face more pressure from the liquidity crunch and soaring financing costs as Beijing intensifies its campaign against overcapacity in the bloated sector in the second half of this year, industry players and analysts said.

The credit chill is gradually spreading from steel traders to the production chain, which would prompt banks to take a vigilant stance in lending to steelmakers and trigger a fresh wave of smaller mills defaulting on loans, they said.

"Many steel mills are facing very tight cash flows as they bear the brunt of the liquidity crunch imposed by the government on highly polluting and energy-consuming sectors like steel," a vice-general manager of a leading steel mill in Hebei province told the Hong Kong Economic Journal's EJ Insight.

"Steel traders have acted as vital intermediaries and built up an inventory pool in China's steel industry. Debt-laden steelmakers would get in trouble soon if so many traders have been shut down. And banks would also take tougher measures to fend off potential risks from lending to them," said the official, who declined to be named. As much as 90 per cent of Chinese mills rely on traders to sell their output.

Since last year, Chinese authorities have waged a crackdown on lending to steel trading firms who have failed to repay loans, forcing thousands of them out of business.

Bank lending to steel traders in Shanghai, China's major steel trading hub, amounted to about 180 billion yuan (S$37.26 billion) at the end of last year, and 20 to 30 per cent of the loans are highly unlikely to be recouped, Citi Research said in a note early this year.

The issue has already attracted attention from top policymakers, as the new leadership is becoming more serious in tackling chronic overcapacity problems in its metal sectors led by steel.

"The steel industry is facing an increasing risk of cashflow rupture as steelmakers are encountering a heavy debt burden," the Ministry of Industry and Information Technology (MIIT) said in a report last Monday.

In the first five months of this year, 86 large and medium-sized steel mills accumulated a combined debt of three trillion yuan, while their debt-asset ratio climbed to 69.4 per cent, up 1.4 percentage points from a year earlier, the report said.

Beijing has been tackling the deep-rooted overcapacity in the industry for years. However, the nation's annual crude steel capacity still surpassed one billion tonnes this year, while only 60 per cent of that capacity has been utilised, industry data showed.

"The financial risk is snowballing as many mills keep losing money and banks are restricting capital flows into the sector. Therefore, those low-end and high-cost producers will suffer the most," said Zou Jiming, an analyst at credit rating agency Moody's Investors Service.

China's large and medium-sized steel firms swung back to a loss of 690 million yuan in June, after they managed to make a negligible profit in the first five months, according to data from the China Iron & Steel Association (CISA).

"However, the worst is yet to come as smaller mills would run out of operating cash flow if economic growth continues to lose steam," Mr Zou added.

Jiangxi Pingte Iron and Steel Co Ltd, based in eastern China's Jiangxi province, has been declared insolvent and has shut down after failing to pay its debts, China Business News reported on June 26.

The chairman and general manager of the steel firm sought to abscond with 200 million yuan after the company's credit lines were suddenly cut off and the plant shut down, the report said.

China's economic growth slowed in the second quarter to 7.5 per cent from a year earlier as weak overseas demand weighed on output and investment.

"Industries that face overcapacity problems are likely to go through tough restructuring in the second half and we expect these industries to experience corporate defaults," Nomura economist Zhang Zhiwei wrote in a June 20 note.

Chinese steel mills, in particular smaller ones, are also grappling with soaring financing costs as banks are ordered to tighten lending to the sector and investors' appetite for steel bonds are turning sour, analysts said.

"Steelmakers are finding it more difficult to obtain loans from banks and their direct financing costs through short-term commercial paper and medium-term notes are swelling," the MIIT report said.

"Investors are quite vigilant towards the steel sector, which would push up financing costs for steel producers, and things are getting worse as the United States intends to withdraw from its quantitative easing programme," Moody's Mr Zou said.

On June 15, Standard & Poor's lowered Baosteel's stand-alone credit profile to "bbb-" from "bbb", while affirming its "A-" rating because of government support.

"Baosteel's financial risk profile reflects our expectation that the company is likely to generate negative free operating cash flow over the next two to three years," the credit ratings agency said.

The yield on March 2017 debt of Baosteel Group, the nation's third-largest steelmaker, rose 102 basis points and touched a record 4.87 per cent on July 5, the highest among non-financial issuers on HSBC Holdings plc's investment-grade Dim Sum Index, according to Bloomberg data. - EJ Insight

[CityFarmer]

The company's half year result was announced. I took a glance on the result, here are my view

http://infopub.sgx.com/Apps?A=COW_Corpor...gBltZLDlv8

- Revenue increased by +21%, while gross profit increased only 4%, mainly due to raw material cost. However, NPAT increased by +18%. It seems the management managed to control expenses to mitigate the issue.

- Car sales increased by +12%, and the company's sale increased by +21%. The company continue to gain market share, with lower ASP. Well, I am skeptical on the strategy, but it might work. Overcapacity issue will not last forever, and I am sure the company will survive till then ...

- OCF is healthy and improving, with cash reserve increased from 66 million to 138 million RMB y-o-y.

- Valuation stands at PE 15 and PB 0.6, base on historical earning and market price of 20.5 cents. Dividend yield is around 5%.

...Hmm...

(not vested)

[RubberMan]

Hi Stockerman, you mentioned that rubber chemical industries are very pollutive in general. Do you know what are the pollutants that China Sunsine emit?

Since China Sunsine is in the rubber chemicals industry with lots of spare capacity, would it also be the next target of the central govt? Furthermore, these rubber chemical industries are very pollutive in general.

*************
[HONG KONG] Chinese steelmakers led by Baoshan Iron & Steel Co Ltd are likely to face more pressure from the liquidity crunch and soaring financing costs as Beijing intensifies its campaign against overcapacity in the bloated sector in the second half of this year, industry players and analysts said.

The credit chill is gradually spreading from steel traders to the production chain, which would prompt banks to take a vigilant stance in lending to steelmakers and trigger a fresh wave of smaller mills defaulting on loans, they said.

"Many steel mills are facing very tight cash flows as they bear the brunt of the liquidity crunch imposed by the government on highly polluting and energy-consuming sectors like steel," a vice-general manager of a leading steel mill in Hebei province told the Hong Kong Economic Journal's EJ Insight.

"Steel traders have acted as vital intermediaries and built up an inventory pool in China's steel industry. Debt-laden steelmakers would get in trouble soon if so many traders have been shut down. And banks would also take tougher measures to fend off potential risks from lending to them," said the official, who declined to be named. As much as 90 per cent of Chinese mills rely on traders to sell their output.

Since last year, Chinese authorities have waged a crackdown on lending to steel trading firms who have failed to repay loans, forcing thousands of them out of business.

Bank lending to steel traders in Shanghai, China's major steel trading hub, amounted to about 180 billion yuan (S$37.26 billion) at the end of last year, and 20 to 30 per cent of the loans are highly unlikely to be recouped, Citi Research said in a note early this year.

The issue has already attracted attention from top policymakers, as the new leadership is becoming more serious in tackling chronic overcapacity problems in its metal sectors led by steel.

"The steel industry is facing an increasing risk of cashflow rupture as steelmakers are encountering a heavy debt burden," the Ministry of Industry and Information Technology (MIIT) said in a report last Monday.

In the first five months of this year, 86 large and medium-sized steel mills accumulated a combined debt of three trillion yuan, while their debt-asset ratio climbed to 69.4 per cent, up 1.4 percentage points from a year earlier, the report said.

Beijing has been tackling the deep-rooted overcapacity in the industry for years. However, the nation's annual crude steel capacity still surpassed one billion tonnes this year, while only 60 per cent of that capacity has been utilised, industry data showed.

"The financial risk is snowballing as many mills keep losing money and banks are restricting capital flows into the sector. Therefore, those low-end and high-cost producers will suffer the most," said Zou Jiming, an analyst at credit rating agency Moody's Investors Service.

China's large and medium-sized steel firms swung back to a loss of 690 million yuan in June, after they managed to make a negligible profit in the first five months, according to data from the China Iron & Steel Association (CISA).

"However, the worst is yet to come as smaller mills would run out of operating cash flow if economic growth continues to lose steam," Mr Zou added.

Jiangxi Pingte Iron and Steel Co Ltd, based in eastern China's Jiangxi province, has been declared insolvent and has shut down after failing to pay its debts, China Business News reported on June 26.

The chairman and general manager of the steel firm sought to abscond with 200 million yuan after the company's credit lines were suddenly cut off and the plant shut down, the report said.

China's economic growth slowed in the second quarter to 7.5 per cent from a year earlier as weak overseas demand weighed on output and investment.

"Industries that face overcapacity problems are likely to go through tough restructuring in the second half and we expect these industries to experience corporate defaults," Nomura economist Zhang Zhiwei wrote in a June 20 note.

Chinese steel mills, in particular smaller ones, are also grappling with soaring financing costs as banks are ordered to tighten lending to the sector and investors' appetite for steel bonds are turning sour, analysts said.

"Steelmakers are finding it more difficult to obtain loans from banks and their direct financing costs through short-term commercial paper and medium-term notes are swelling," the MIIT report said.

"Investors are quite vigilant towards the steel sector, which would push up financing costs for steel producers, and things are getting worse as the United States intends to withdraw from its quantitative easing programme," Moody's Mr Zou said.

On June 15, Standard & Poor's lowered Baosteel's stand-alone credit profile to "bbb-" from "bbb", while affirming its "A-" rating because of government support.

"Baosteel's financial risk profile reflects our expectation that the company is likely to generate negative free operating cash flow over the next two to three years," the credit ratings agency said.

The yield on March 2017 debt of Baosteel Group, the nation's third-largest steelmaker, rose 102 basis points and touched a record 4.87 per cent on July 5, the highest among non-financial issuers on HSBC Holdings plc's investment-grade Dim Sum Index, according to Bloomberg data. - EJ Insight

[Stockerman]

Hi RubberMan

Any by-products relating to the production of rubber accelerators, 6PPD, etc will be emitted.

Anyone who has done a plant visit to Sunsine, cld pls share your experience What did u smell in the air ? (Sulphur? SO2, SO3?)

Even the company admitted that they are still working on pollution reduction if I didn't read wrongly??

Anyone who went to the results briefing yesterday, grateful if u cld share your findings here.

(extracted from Sunsine's website)
Strong R & D Expertise
Achieving 2 awards for our R&D work, our R&D team continue to work on new products to bring to market, improve our production processes to minimise operational costs, and work on pollution reduction and environmental initiatives.

Hi Stockerman, you mentioned that rubber chemical industries are very pollutive in general. Do you know what are the pollutants that China Sunsine emit?

Since China Sunsine is in the rubber chemicals industry with lots of spare capacity, would it also be the next target of the central govt? Furthermore, these rubber chemical industries are very pollutive in general.

*************
[HONG KONG] Chinese steelmakers led by Baoshan Iron & Steel Co Ltd are likely to face more pressure from the liquidity crunch and soaring financing costs as Beijing intensifies its campaign against overcapacity in the bloated sector in the second half of this year, industry players and analysts said.

The credit chill is gradually spreading from steel traders to the production chain, which would prompt banks to take a vigilant stance in lending to steelmakers and trigger a fresh wave of smaller mills defaulting on loans, they said.

"Many steel mills are facing very tight cash flows as they bear the brunt of the liquidity crunch imposed by the government on highly polluting and energy-consuming sectors like steel," a vice-general manager of a leading steel mill in Hebei province told the Hong Kong Economic Journal's EJ Insight.

"Steel traders have acted as vital intermediaries and built up an inventory pool in China's steel industry. Debt-laden steelmakers would get in trouble soon if so many traders have been shut down. And banks would also take tougher measures to fend off potential risks from lending to them," said the official, who declined to be named. As much as 90 per cent of Chinese mills rely on traders to sell their output.

Since last year, Chinese authorities have waged a crackdown on lending to steel trading firms who have failed to repay loans, forcing thousands of them out of business.

Bank lending to steel traders in Shanghai, China's major steel trading hub, amounted to about 180 billion yuan (S$37.26 billion) at the end of last year, and 20 to 30 per cent of the loans are highly unlikely to be recouped, Citi Research said in a note early this year.

The issue has already attracted attention from top policymakers, as the new leadership is becoming more serious in tackling chronic overcapacity problems in its metal sectors led by steel.

"The steel industry is facing an increasing risk of cashflow rupture as steelmakers are encountering a heavy debt burden," the Ministry of Industry and Information Technology (MIIT) said in a report last Monday.

In the first five months of this year, 86 large and medium-sized steel mills accumulated a combined debt of three trillion yuan, while their debt-asset ratio climbed to 69.4 per cent, up 1.4 percentage points from a year earlier, the report said.

Beijing has been tackling the deep-rooted overcapacity in the industry for years. However, the nation's annual crude steel capacity still surpassed one billion tonnes this year, while only 60 per cent of that capacity has been utilised, industry data showed.

"The financial risk is snowballing as many mills keep losing money and banks are restricting capital flows into the sector. Therefore, those low-end and high-cost producers will suffer the most," said Zou Jiming, an analyst at credit rating agency Moody's Investors Service.

China's large and medium-sized steel firms swung back to a loss of 690 million yuan in June, after they managed to make a negligible profit in the first five months, according to data from the China Iron & Steel Association (CISA).

"However, the worst is yet to come as smaller mills would run out of operating cash flow if economic growth continues to lose steam," Mr Zou added.

Jiangxi Pingte Iron and Steel Co Ltd, based in eastern China's Jiangxi province, has been declared insolvent and has shut down after failing to pay its debts, China Business News reported on June 26.

The chairman and general manager of the steel firm sought to abscond with 200 million yuan after the company's credit lines were suddenly cut off and the plant shut down, the report said.

China's economic growth slowed in the second quarter to 7.5 per cent from a year earlier as weak overseas demand weighed on output and investment.

"Industries that face overcapacity problems are likely to go through tough restructuring in the second half and we expect these industries to experience corporate defaults," Nomura economist Zhang Zhiwei wrote in a June 20 note.

Chinese steel mills, in particular smaller ones, are also grappling with soaring financing costs as banks are ordered to tighten lending to the sector and investors' appetite for steel bonds are turning sour, analysts said.

"Steelmakers are finding it more difficult to obtain loans from banks and their direct financing costs through short-term commercial paper and medium-term notes are swelling," the MIIT report said.

"Investors are quite vigilant towards the steel sector, which would push up financing costs for steel producers, and things are getting worse as the United States intends to withdraw from its quantitative easing programme," Moody's Mr Zou said.

On June 15, Standard & Poor's lowered Baosteel's stand-alone credit profile to "bbb-" from "bbb", while affirming its "A-" rating because of government support.

"Baosteel's financial risk profile reflects our expectation that the company is likely to generate negative free operating cash flow over the next two to three years," the credit ratings agency said.

The yield on March 2017 debt of Baosteel Group, the nation's third-largest steelmaker, rose 102 basis points and touched a record 4.87 per cent on July 5, the highest among non-financial issuers on HSBC Holdings plc's investment-grade Dim Sum Index, according to Bloomberg data. - EJ Insight

[Stockerman]

Sunsine has conviningly broken below the 20 cents level... Look for deeper pullback in the weeks ahead...

[RubberMan]

Sunsine has been recycling its sulphur to produce IS.
Since 2008, the company has been accredited with the ISO14001:2004 for its Environment Management System.