Sinostar PEC FY2019 net profit jumps 37.5% to 113.7m yuan

SINOSTAR PEC Holdings on Thursday posted a 37.5 per cent jump in net profit for FY2019 to 113.7 million yuan (S$22.6 million) from 82.7 million yuan.

The Mainboard-listed group, which produces and supplies downstream petrochemical products in China, saw revenue soar 62 per cent to 3.7 billion yuan for the year ended Dec 31, up from 2.3 billion yuan previously.

This was mainly on higher sales contribution from its newly acquired subsidiary Dongming Qianhai, which doubled the group's propylene production capacity and broadened its product offerings. The rise was partially offset by a decrease in revenue from another subsidiary, Dongming Hengchang.

Earnings per share were 17.8 RMB cents versus 12.9 RMB cents a year ago. No dividend was declared for the period under review, or the corresponding period of the previous year.

Sinostar PEC's construction of a new polypropylene production plant is on track to be completed by Q4 2020. Meanwhile, it will continue to be prudent in its cash flow management and focus on cost efficiency.

With the Covid-19 outbreak driving demand for polypropylene-based masks, protective wear and other downstream products, Sinostar PEC is upbeat about the polypropylene market's prospects. However, it remains cautious about the virus outbreak's impact on the overall Chinese economy, which remains uncertain.

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Said Zhang Liucheng, CEO and executive director of Sinostar PEC: "Despite periodical production plant maintenance, which temporarily stopped production, we managed to record a set of commendable results. We begin the new year on a cautious note, monitoring the Covid-19 outbreak situation closely while remaining confident about our long-term growth outlook."

Sinostar PEC shares closed at S$0.158 on Thursday before the results announcement, down 1.5 cents or 8.67 per cent.