 2009-06-10 |
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(Times News - Taipei)
YC (4306) announced yesterday (9th) that its 100% subsidiary, Wangzhou Construction, has sold land in Linkou. The land measures 886.29 square meters, equivalent to 268.10 ping, with a total transaction amount of NT$131 million. The expected profit from this sale is NT$40.56 million, which will add to the non-operating income for the second quarter. Given YC's capital, this translates to an earnings contribution of approximately NT$0.25 per share.
Wangzhou Construction currently has three projects, with "World's Zone" and "City's Zone" already under construction. In the first quarter, YC recognized about NT$20 million from "World's Zone," and it is estimated to recognize NT$50 million from the second to the fourth quarters. The completion rate for "City's Zone" is currently below 15%, with recognition expected to start in the third quarter, estimating 40% recognition in that quarter and 20% in the fourth quarter.
Currently, YC maintains two BOPP production lines at its factories in China and Taiwan. BOPP has high entry barriers (each line requires an investment of about NT$1 billion) and is produced on an order basis, offering advantages over PVC films. The global annual demand for BOPP is approximately 4.5 million tons, with a demand growth rate of around 8% to 10% per year. YC plans to continue expanding new production lines, expecting to start production in the third quarter of next year.
YC noted that its current utilization rate is at full capacity. Even with surging raw material prices, there is tangible demand from downstream industries, allowing for a complete pass-through of raw material costs. The company is cautiously optimistic about its second-quarter operations. Analysts believe that benefiting from the steady growth in demand from Southeast Asia and Central and South America, as well as better-than-expected order intake and pricing feedback, YC's profits in the first quarter outperformed market estimates. With the benefit of low-priced inventory in the second quarter, the gross margin for the quarter is expected to be better than in the first quarter, estimated at around 21%.
(Source: Industrial Times - Reporter Peng Hsuan-yi, Taipei) |
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