 2011-05-10 |
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Reporter He Mei-Ju, Taipei
Packaging material giant YC Group (4306) continued its momentum from March, achieving consolidated revenue of NT$1.71 billion in April, representing a 30.53% year-over-year increase, setting a new high since its listing. The company noted that while China’s electricity rationing policy has affected part of Ningbo Asia Polymer’s production capacity, demand for consumer goods has increased, driving strong shipments of packaging materials such as films and tapes. The supply-demand situation remains tight, and with falling oil prices reducing raw material costs, product profit margins have expanded. This bodes well for both revenue and gross margins in the second quarter.
YC’s April revenue was about NT$536 million, a 40.05% year-over-year increase and an 8.35% growth compared to March. Cumulative revenue from January to April 2011 reached approximately NT$1.83 billion, a 35.7% increase compared to the same period last year. Consolidated revenue for April was NT$1.71 billion, up 30.53% year-over-year and 2.7% higher than March. Cumulative consolidated revenue from January to April 2011 was around NT$6.045 billion, a 24.36% growth compared to the same period last year.
In the first quarter, YC’s consolidated revenue reached NT$4.334 billion, a 28% year-over-year increase. However, the gross margin dropped by about 3 percentage points to 14.29%, compared to 17.49% for the same period last year. Consolidated operating profit was NT$300 million, a 27.6% year-over-year increase. Consolidated pre-tax profit was NT$297 million, and consolidated net profit after tax was NT$207 million, with year-over-year growth rates of 4.2% and 28%, respectively. Earnings per share (EPS) were NT$0.75, better than NT$0.61 in the same period last year.
Looking ahead to Q2, YC expects revenue to continue growing, supported by the vertical integration of upstream, midstream, and downstream production of films and tapes, shielding the company from raw material shortages. Demand for BOPP films is expected to rise, and gross margins are likely to improve compared to the previous quarter. The company also foresees a surge in domestic demand as China prepares to open its doors to individual travelers from the mainland, driving purchases of personal care products, food and beverages, and gifts, significantly stimulating domestic consumption and widening the supply gap for films.
Currently, YC operates five BOPP film production lines with a monthly output of around 2,500-3,000 tons. In January, Ningbo Asia Polymer successfully reached full production. The new film plant in Changbin, with a monthly output of 3,000 tons, is currently being fast-tracked and is expected to begin production in the second half of the year to capitalize on this growth opportunity. The group’s annual production capacity is estimated to reach 160,000 tons. With new production lines coming online and product prices rising, revenue is expected to continue growing, helping YC expand its share in the BOPP film market. |
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