 2012-04-12 |
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Reported by Peng Xuan-Yi, Taipei
Price increases and shipping boosts have led to strong March revenues for Donglian (1710), YC (4306), and ACHEM (1715), with monthly revenue growth of 21–25%. Both YC and ACHEM achieved record-high revenues in March due to rising demand for tapes and higher BOPP film prices. With the second quarter’s price increase strategies coming into effect, their operations are expected to improve further. Analysts project a 20–25% increase in annual performance for both companies, supported by new production additions.
In March, YC’s revenue increased by 21.56% month-over-month, with first-quarter revenue growing 18% quarter-over-quarter and 14% year-over-year. ACHEM's revenue in March grew by 25.5% month-over-month, and its first-quarter revenue reached NT$12.7 billion, up 27% year-over-year. YC Chairman Li Zhi-Xian noted that film and tape prices lag behind petrochemical raw material prices by 1–2 months. With rising petrochemical costs and recovering demand, prices for film materials and tapes are expected to continue increasing through Q2 and Q3. Additionally, the effects of previous capital expenditures will begin to materialize.
YC’s Changbin plant’s sixth BOPP film production line will operate at full capacity this year, boosting BOPP film production by over 30% and significantly enhancing revenue performance. ACHEM's Shanghai plant will add two new PVC tape production lines, each with a capacity of 800,000 square meters per month, set to start in the second half of the year. The Vietnam plant’s first phase includes new PVC and OPP tape production lines, with capacities of 800,000 square meters and 7.7 million square meters per month, respectively, expected to begin operations in Q4.
Analysts estimate Donglian’s March revenue grew by 21%, with first-quarter EPS exceeding NT$0.50. Due to low-priced ethylene glycol (EG) from Canada and the U.S., high polyester demand in China, and high ethylene prices, the second quarter may face challenges with profit margins. Although CNOOC's EG maintenance in China will end in mid-April, Tianjin Petrochemical and Yangzi are scheduled for maintenance with capacities of 400,000 tons and 380,000 tons respectively. Additionally, South Asia’s 750,000-ton EG capacity is undergoing maintenance, potentially reducing exports to China by about 50,000 tons, which could support a rebound in EG prices. |
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