 2015-03-12 |
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Optimistic Outlook for YC Group's ACHEM and Xinzhou
March 11, 2015, 11:57
Reported by Wang Yi-Hsin, Taipei Times
YC Group released its February revenue performance, which was generally weak due to fewer working days during the Lunar New Year holiday. Looking ahead, YC's operations face challenges due to persistently low oil prices. However, ACHEM and Xinzhou are expected to see gradual improvements in March, as the number of working days returns to normal and business expansion efforts gain momentum.
YC Group (4306) reported consolidated revenue of NT$1.06 billion for February, a 27.45% year-on-year decrease. Cumulative revenue for the first two months was down 14.14% compared to the same period last year. ACHEM (1715) reported February consolidated revenue of NT$662 million, a 17.4% decrease year-on-year, with cumulative revenue for the first two months down 7.78%. Xinzhou (3171) posted consolidated revenue of NT$115 million in February, a 3.8% year-on-year decrease, with a cumulative two-month revenue drop of 5.5%.
ACHEM’s February revenue was impacted by fewer working days during the Lunar New Year and reduced demand in the Chinese market. Although the sharp drop in crude oil prices has been relatively beneficial, lower unit selling prices contributed to the revenue decline. With the Chinese market stabilizing and increasing export orders from the U.S. and Japan, ACHEM’s revenue is expected to return to normal levels in March. Additionally, with the Yangmei PE plant and the Haian plant in China gradually coming online this year, and vertical integration benefits becoming increasingly evident, ACHEM’s operations are expected to show a steady growth trend.
After the integration of Xinzhou Global’s packaging business, its operational efficiency in Taiwan has improved significantly, and Taiwan’s packaging market is expected to grow steadily this year. In China, "Master of Packaging" has achieved monthly break-even status after last year's restructuring, and the company plans to expand its operations in central and northern China, with gradual growth expected for Xinzhou's future operations.
YC faces significant pressure due to the continued low oil prices, which have impacted the performance of its film business. The persistent oversupply in China’s film market further complicates matters. If oil prices continue to decline, the operational pressure will worsen, and future revenue and profit growth will face challenges. |
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