 2009-05-25 |
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(Times News - Taipei)
As the Financial Supervisory Commission encourages "investment immigration," funds are pouring into related stocks, leading to significant price increases. Packaging materials giant YC (4306) saw a surge in its stock price due to its subsidiary, Wangzhou Construction, which has three ongoing projects. Starting from the third quarter, it will begin recognizing profits from the "City's Zone" project, with expectations to recognize 60% of the revenue in the second half of the year, contributing approximately NT$1.9 per share to YC's earnings per share (EPS). Coupled with strong demand for BOPP films and other products, the company's operational profitability is expected to improve, with overall profits this year likely surpassing those of last year. During trading, the stock price briefly hit a new high, marking the best performance in nearly ten months.
Wangzhou Construction, a 100% subsidiary of YC, currently has three projects, with "World's Zone" and "City's Zone" already under construction. Analysts estimate that this year, Wangzhou Construction will contribute around NT$1.9 per share to YC's EPS. In the first quarter, YC recognized about NT$20 million from "World's Zone," with projections of NT$50 million recognized from the second to the fourth quarters. The completion rate for "City's Zone" is currently below 15%, with estimates of 40% recognition in the third quarter and 20% in the fourth quarter. Additionally, YC owns two plots of land and plans to launch projects in Neihu and Linkou in 2010 and 2011, which will continue to contribute to profits in the future.
Regarding its core operations, with the rise in raw material prices for polypropylene, YC's revenue performance is gradually improving. The company's production capacity is fully utilized, and raw material prices can be completely passed on to downstream users. However, analysts note that due to declining prices for BOPP films, this year's revenue will be lower than last year's, resulting in a decrease in operational profitability. Nevertheless, with contributions from Wangzhou Construction, this year's EPS is estimated to be around NT$3.5, which would be better than last year's performance. |
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