 2014-09-10 |
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Reporter: Zhao Xiaohui, Taipei
With weak demand in the downstream plastics market, the revenue performance of YC Group (4306-TW) for August fell short of expectations, totaling NT$1.684 billion, a decrease of 0.94% month-over-month and an increase of 4.45% year-over-year. The group hopes that shipment volumes will bottom out and recover starting in September, with a boost from the official production start of ACHEM Petrochemical's acrylic acid plant.
For August, YC Group reported consolidated revenue of NT$1.684 billion, down 0.94% from the previous month and up 4.45% from the same month last year. The cumulative revenue for the first eight months of the year reached NT$13.402 billion, showing a 3.66% increase compared to the same period last year.
In the struggling Chinese packaging materials market, its tape subsidiary, ACHEM (1715-TW), saw August consolidated revenue of NT$912 million, a 0.05% increase from the previous month and a 2.26% rise year-over-year. Year-to-date revenue for ACHEM was NT$7.402 billion, up 7.43% compared to the same period last year.
Another subsidiary, Xinzhou Global (3171-TW), which handles packaging materials and distribution, reported consolidated revenue of NT$148 million in August, a 4.92% increase from July but a 9.04% decrease year-over-year. For the first eight months of the year, Xinzhou Global's revenue reached NT$1.155 billion, a 12.31% decline year-over-year.
Looking ahead, YC Group noted that ACHEM is accelerating its vertical integration in the OPP (Oriented Polypropylene) packaging film market, where conditions are poor. The company is gradually relocating equipment from its Shanghai plant to the Ningbo plant, with the move expected to be completed by the end of the year. Therefore, production and shipments for July and August are anticipated to hit a low, with revenue expected to gradually recover starting in September.
Despite the weak market, ACHEM's revenue for the first eight months of the year still showed a 7.43% increase compared to last year, driven by stable growth in export tape orders and increased shipments of automotive and PVC tapes, indicating that new production capacities are yielding benefits.
YC expects ACHEM's performance in the third quarter to improve, with increased shipments of automotive and protective PVC tapes, the launch of new PE (Polyethylene) products, and steady growth in specialized businesses, leading to a gradual recovery in operations.
Regarding Xinzhou Global, YC indicated that the integration of its packaging materials business has started to show operational efficiency in Taiwan. Additionally, the "Pack Master" business in China has been growing and is now showing profits, with expectations for stable growth in the future.
The group's investment in ACHEM Petrochemical’s acrylic acid is still in trial production. YC anticipates that once full production begins, it will enhance the overall operational efficiency through vertical integration.
Looking towards the second half of the year, YC expects that with the benefits from ACHEM’s new production capacities, ongoing expansion of Xinzhou Global’s packaging material channels in Taiwan and China, and increased capacity at ACHEM Petrochemical, the group will benefit from the growth of these three subsidiaries, leading to stable growth in revenue and profits. |
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