 2011-08-03 |
|
|
(Industry and Commerce Times Reporter Yuan Yan-Shou, Taipei) Due to the profits generated from land sales, YC (4306) has revised its financial forecast, raising its estimated pre-tax earnings from NT$948 million to NT$1.791 billion, an increase of 88%. YC's Executive Vice President Fang Shu-Fen stated yesterday (2nd) that with the BOPP production capacity at the Changbin plant set to commence in November, and prices expected to rise by the end of Q3, the revenue for the second half of the year should see sequential growth.
YC announced its financial results for the first half of the year, reporting consolidated revenue of NT$9.131 billion, a year-on-year increase of 16.7%. Consolidated gross profit stood at NT$1.3 billion, with a gross profit margin of 14.2%. The consolidated operating profit was NT$600 million, with an operating margin of 6.6%. Pre-tax earnings amounted to NT$590 million, exceeding the previous financial target of NT$420 million, achieving a fulfillment rate of 140%.
The increased financial forecast led to a surge in YC's stock price, with trading volumes spiking, and at one point, the stock hit its daily limit up. It closed at NT$31.9, rising NT$1.55, with a transaction volume of 14,600 lots.
YC's core business involves BOPP films and adhesive tape. Fang noted that in the first four months of this year, both Taiwan and China's film and tape markets had full production and sales. However, demand and pricing for films softened in May and June. Yet, due to excellent performance in April, the second quarter's operating results remained strong. It is estimated that June and July were the low points, and currently, film prices are on the rise, with clearer trends expected in August and September.
In terms of non-core business, YC mentioned that its subsidiary, ACHEM Construction, sold 738 ping of land in the Tam Mei area of Neihu, Taipei, in early July at a price of NT$1.65 million per ping, resulting in a profit of approximately NT$700 million after costs. This profit is expected to be accounted for in Q4 and will contribute to an increase in annual profits.
Furthermore, YC is actively pursuing vertical integration. Chairman Lee Chih-Hsien stated that the subsidiary, ACHEM Petrochemicals, is entering the upstream market and is likely to establish a plant in Eastern China, with an investment of USD 48 million (approximately NT$1.39 billion), to be carried out in two phases. The first phase is expected to begin production in 2013, with the goal of completing the second phase of investment by 2015 and challenging annual revenue of NT$20 billion. |
|
