 2011-04-25 |
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Reporter Peng Hsuan-Yi, Taipei
With shipments stabilizing, the plastic processing sector, including YC (4306), ACHEM (1715), Yongyu (1323), and Xinyongquan (2114), is experiencing an operational upturn. YC is leveraging its BOPP film and tape production to achieve continued revenue growth, while Xinyongquan is seeing an increase in order visibility for Q2 due to renewed demand from European and American clients, with projections indicating a 10-15% quarter-over-quarter growth and a 20% year-over-year increase, though the appreciation of the NT dollar poses a concern for earnings.
YC stated that the investment threshold for tape manufacturing is not high; however, the upstream raw material supply of BOPP films is constrained, causing many tape manufacturers in China to be unable to fulfill orders. YC benefits from vertical integration in the production of films and tapes, securing a stable supply of materials and attracting attention from international tape giant 3M, as well as receiving many orders transferred from Chinese tape manufacturers.
Currently, YC operates four BOPP film production lines with a monthly output of 2,000 to 2,500 tons. In January, its Ningbo facility and the Changbin plant in Taiwan began operations with new monthly production of 3,000 tons each in late October, expanding capacity by over 50%, with an annual capacity reaching 130,000 tons.
YC's Chairman, Li Zhi-Xian, pointed out that China's electricity rationing policy implemented last year has eliminated many old and small factories. Considering capital costs and production efficiency, smaller film manufacturers without sufficient production scale are struggling to enter the market. A new production line takes approximately 2-3 years to become operational, which benefits YC in capturing the BOPP film market.
In Q1, YC's revenue grew by 33% year-over-year, breaking new records. Analysts estimate that YC's operations will increase by 30% this year, with EPS projected to reach between NT$3.00 and NT$3.20. |
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