China Sunsine posts 26% drop in Q1 net profit to 110.2m yuan

SPECIALTY rubber chemicals producer China Sunsine Chemical Holdings on Monday posted a 26 per cent fall in net profit to 110.2 million yuan (S$22.3 million) for the first quarter ended March 31.

Revenue for the quarter shrank 20 per cent to 686.6 million yuan due to a decrease in average selling price (ASP). ASP slid 24 per cent in Q1, mainly on the back of a decrease in raw material prices.

Earnings per share decreased 26 per cent to 22.42 RMB cents from 30.4 cents a year ago.

Executive chairman Xu Cheng Qiu said he was delighted despite the year-on-year profit decline, as the company still managed to achieve "satisfactory" results amid a slowdown in the global and Chinese economies.

China Sunsine increased its sales volume by 5 per cent in the quarter by increasing production and using its flexible pricing strategy, and Mr Xu said the company will continue to follow its strategy which states that "higher production leads to higher sales volume, which in turn stimulates even higher production".

As such, the company plans to expand its capacity to gain more market share in the rubber chemicals industry.

China Sunsine shares closed up two Singapore cents or 1.71 per cent to S$1.19 on Monday before the results were announced.