China Sunsine net profit up 85% in Q3

SPECIALTY rubber chemicals producer China Sunsine Chemical Holdings has posted a net profit of RMB 143.4 million (S$28.6 million) in the third quarter, up 85 per cent from the same period a year earlier.

Revenue in the three months ended Sept 30 jumped 22 per cent to RMB 775.6 million, due to a 9 per cent rise in sales volume and 12 per cent increase in average selling price (ASP). 

The higher ASP in Q3 was due mainly to the fixing of higher quarterly prices with bigger customers in advance in the second quarter, given the short supply of rubber chemicals in China during the past few quarters, the group said.

However, on a quarter-on-quarter basis, the ASP fell 11 per cent from Q2, owing to the decrease in the group's raw material prices and weaker demand from domestic tyre makers, the group noted.

Executive chairman Xu Cheng Qiu said: "Despite a decline in ASP in this quarter, the group was able to maintain a reasonably good profit margin level due to its core competences of stable delivery and superior quality. Stringent environmental protection and safety requirements, and frequent inspections will be the norm in the next three years. The group will continue to place emphasis on and invest heavily in environmental protection and safety, and technology innovation, to further strengthen its market leadership position."

Mr Xu said the group will continue to maintain its strategy of "higher production leading to higher sales volume, which in turn will stimulate even higher output".

He added: "We can see that the ASP has stabilised in October and the Chinese tyre makers have started to increase their production utilisation rate in the fourth quarter. With our strong competitive advantages, we remain cautiously optimistic about the group's performance in the next 12 months, and are confident of its sustainable and stable growth."   

China Sunsine added that it is in the final stages of obtaining approval from the authorities for the trial run of the new Phase 1, 10,000-tonne TBBS rubber accelerator production line as well as the new 10,000-tonne insoluble sulphur production line at its Ding Tao facility. Meanwhile, the expansion of Guangshun Heating plant has been completed and has started its trial run.

Q3 earnings per share was 29.18 RMB cents, up 85 per cent from 15.79 RMB cents in Q3 last year. Net asset value per share was 450.28 RMB cents (89.49 Singapore cents) as at Sept 30, up from 327.58 RMB cents as at Dec 31 last year.

The counter fell six Singapore cents or 5.61 per cent to S$1.01 on Monday before results were announced after trading hours.