 2011-08-03 |
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(Liberation Daily Reporter Chen Yong-Ji, Taipei) Chairman Lee Chih-Hsien of YC (4306) stated yesterday that ACHEM Petrochemicals will be the largest investment project in YC Group's history. The plan was submitted to the Investment Commission last week, and if it passes this month, production is expected to commence by the end of 2013, with an estimated output value of NT$20 billion in five years, equivalent to the current group revenue.
Lee indicated that this is the first step in YC's vertical integration into the upstream sector. Last month, ACHEM purchased machinery and equipment and signed contracts to acquire technology, with raw materials to be supplied by Japanese and Korean petrochemical companies. The site assessment for the factory has also been completed, and it will be established in China. Currently, only Formosa Plastics Group produces this product in Taiwan, but details cannot be disclosed yet. He mentioned that, in addition to internal use, the future products will also be sold back to major manufacturers in Japan and South Korea.
YC recently raised its financial forecast primarily due to the sale of 700 ping of land in Neihu's fifth phase, contributing NT$700 million in profits. Currently, there are still 1,100 ping of land in hand. Lee noted that there are many buyers evaluating the land, and the offers are higher than the NT$1.65 million per ping sold in July. If the offers are attractive, they do not rule out further sales.
Regarding the core business, YC mentioned that film prices reached a record high of USD 2,250 per ton in April but fell to USD 1,880 in June as oil prices dropped. Since July, prices have rebounded and are currently at USD 2,050. The company expects to see the effects of the price recovery reflected in August's revenue, estimating improvements in the core business for Q3 and Q4.
YC also pointed out that a new film production line will open at the Changbin plant in November, with a monthly capacity of 3,000 tons. Benefiting from new capacity and rising prices, YC anticipates an increase of NT$100 million to NT$200 million in profits compared to the original forecast.
YC announced the revised financial forecast, with the group aiming for profits of NT$1.79 billion this year, an increase of 88% from the previous forecast. However, if calculated based on the parent company, the capital before the end of the year will be NT$2.9 billion, with an estimated pre-tax earnings per share of about NT$5.50. |
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