Sinostar PEC's Q1 profit soars on post Covid-19 recovery

SINOSTAR PEC Holdings on Saturday posted a significant jump in net profit to 59.3 million yuan (S$12.2 million) for the first quarter of 2021, up from 801,000 yuan a year ago on the back of a ramp-up in production volume of most products and the expansion of gross margins due to increased average selling prices of certain petrochemicals.

The revenue of the mainboard-listed group, which produces and supplies downstream petrochemical products in China, increased 22.5 per cent to 960.4 million yuan compared to a year ago when the group's operations were affected by Covid-19.

A new polypropylene plant, which is currently undergoing trial productions, also registered its maiden revenue contribution to the group.

Earnings per share were 9.27 fen compared with 0.13 fen a year ago. No dividend was declared for the period under review.

In its outlook, the group noted that the resumption in commercial activities and demand for personal protective equipment (PPE) such as surgical masks, shields and gloves have stimulated the sale for products such as polypropylene fibre which is utilised in the produce of these PPE.

With the completion of our new polypropylene production plant in late 2020, the group said that it has undertaken trial-run production and expects utilisation to increase within the year - which will contribute to the group's financial performance in the year ahead.

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Li Xiangping, executive chairman and CEO of Sinostar PEC, said that the new polypropylene plant has significantly expanded its polypropylene production capacity and product types, allowing the group to explore into new industries and the international markets.

He added that the group is confident of its performance for FY2021 and will continue to manage its cash flow closely and focus on operational efficiency, optimising production and exploring the international market for the group's polypropylene.

Sinostar PEC shares closed flat at S$0.185 last Friday before the results announcement.