 2012-11-12 |
|
|
By Yih-Lang Chou, Economic Daily News
YC (4306) Group is benefiting from rising demand for films and adhesive tapes in Mainland China this quarter, with October sales rebounding, and the company expects to emerge from its downturn. Analysts estimate that YC's revenue will reach around NT$19 billion this year. With new production lines, the launch of ACHEM Petrochemicals, and the expansion of the “Bao Master” distribution outlets next year, operations are expected to surge, with revenue potentially reaching NT$25 billion, a 38% year-on-year increase.
This year, YC Group faced challenges from rising oil prices and was in an expansion phase across its films, adhesive tapes, and distribution segments, which increased operating expenses such as shipping and sales costs. This resulted in a decrease in earnings per share (EPS) from NT$0.96 in the second quarter to NT$0.89 in the third quarter. Last Friday, the company’s stock closed flat at NT$19.
However, entering the fourth quarter, demand in Mainland China’s film and adhesive tape markets has begun to recover. YC Group’s consolidated revenue for October reached NT$1.542 billion, up 10.15% from NT$1.401 billion in September but down 1.69% year-on-year.
Company executives noted that with the U.S. election settled and the conclusion of the 18th National Congress of the Communist Party of China, the global economy is expected to gradually stabilize. As a result, the third quarter is likely to represent the bottom of the downturn, and the fourth quarter is projected to show more stable performance.
Analysts pointed out that industrial adhesive tape demand was affected by the broader economic conditions, which caused the group's estimated consolidated revenue for this year to be around NT$19 billion, down slightly from NT$19.523 billion in 2011, representing a minor decline of 2%.
YC executives stated that the group's various divisions are actively expanding and investing in new projects. To meet the demand for film products from clients like 3M, YC is currently building its seventh film production line, which is expected to be operational by mid-2013.
To secure raw materials for adhesive tapes, YC has also invested in ACHEM Petrochemicals in Jiangsu to produce acrylic acid and butyl acrylate. The first phase of the plant’s construction began in July of this year, with completion and production expected by the fourth quarter of 2013.
YC’s subsidiary ACHEM is undergoing significant expansion in Taiwan, Mainland China, and Vietnam. The Yangmei plant in Taiwan will start producing specialty tapes in the fourth quarter, while two new PVC adhesive tape production lines in Shanghai started operations in the second half of the year. The Vietnam plant's new PVC and OPP adhesive tape production lines are set to begin operations this quarter.
Company executives estimate that with the expansion and new projects in place for YC, ACHEM, and Xinzhou Global, the group’s growth momentum next year is highly promising. |
|
