 2011-08-02 |
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In terms of core business, Chairman Lee Chih-Hsien noted that the impact of the shutdown at the sixth naphtha cracking plant on the film business is relatively minor, with adhesive tape being less affected. The main pressure comes from the chemical supply for adhesive. Since 70% of the raw materials are sourced from abroad and there is currently one month of inventory available, the supply and demand situation suggests that prices are likely to rise. Moreover, a pricing mechanism has been implemented to reflect the raw material costs, facilitating a smooth transfer of these costs to the market. The BOPP film production line, which has a monthly capacity of 3,000 tons, began operations in January, and another BOPP film production line is expected to be completed by the end of next year.
Regarding investment, Lee Chih-Hsien also revealed that the group plans to invest approximately NT$1.39 billion in ACHEM Petrochemicals, which will be established in the Eastern China region. This product is also produced by Formosa Plastics, offering excellent profits. Last week, the project was submitted to the Investment Review Committee, and if approved, production is expected to begin in 2013, contributing revenue and profits within five years. Previously, the group invested NT$200 million to acquire a 42% stake in Tian Chi Electronics, which is still operating at a loss. In the future, Tian Chi plans to advance in both packaging channels and entry-level computer businesses, with expectations for synergy with YC's cloud customer base next year.
YC announced its financial results for the first half of the year, reporting a consolidated revenue of NT$9.131 billion, achieving 102% of its target, with pre-tax net profit reaching NT$590 million. Thanks to the sale of land in Neihu in July, an additional profit of NT$700 million is expected to be recognized.
Due to the land sale profits expected to contribute to Q4 performance and the revenue achievement rate already at 102%, with a pre-tax net profit achievement rate of 140%, YC adjusted its annual financial forecast on August 1. The new forecast estimates that the consolidated revenue for the year will increase by 6.86% to NT$20.304 billion; operating gross profit will rise by 29.92% to NT$3.392 billion; operating net profit will increase by 99.29% to NT$1.717 billion; and pre-tax net profit will increase by 88.91% to NT$1.791 billion. After excluding minority interests, analysts estimate pre-tax earnings to be around NT$1.6 billion, with pre-tax earnings per share of approximately NT$5.7. |
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