 2015-06-15 |
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YC and Subsidiaries' Vertical Integration Benefits Becoming Evident; Stable Growth Expected This Year
MoneyDJ News, June 9, 2015, 09:55:56
Reported by News Center
In May, YC Group (4306) reported consolidated revenue of NT$1.502 billion, a 4.89% month-over-month decrease, and a 13.78% year-over-year decrease for the first five months. Its subsidiary ACHEM (1715) reported consolidated revenue of NT$907 million in May, down 2.04% from April, and a 7.63% decrease year-over-year for the first five months. Newzhou Global (3171) achieved consolidated revenue of NT$147 million in May, a 3.69% increase from April, but a 5.08% decrease year-over-year for the first five months.
YC analyzes that, following a significant drop in crude oil prices at the end of 2014 and the first quarter of 2015, the company's operations faced pressures in the first quarter of this year. However, with oil prices gradually recovering and the company's proactive asset activation, along with the expected completion of the New Taipei City MORE project by the end of the year, revenue and profitability in the second quarter are expected to show significant improvement compared to the first quarter. Thus, overall operations are expected to maintain stable growth this year.
YC states that ACHEM has benefited from the gradual realization of vertical integration effects, with increasing shipment volumes. However, May's revenue showed a decline compared to April, mainly because the OPP production line was moved from the Jiading plant to the Ningbo plant, and the revenue from Ningbo’s OPP tape shipments has not yet been included in ACHEM's figures. Including this adjustment, actual growth would be around 2%. Revenue is expected to see significant growth after the equity transfer is completed in July. In the second half of the year, with production capacity at the Hai'an plant ramping up and increased shipments of new products like PE, overall operations are expected to recover strongly.
YC also notes that Newzhou Global has shown stable profit performance in Taiwan after integrating its packaging materials business. In China, the effectiveness of business expansion is becoming more evident. Orders from the end of May will gradually boost revenue in the region, leading to increased overall profitability in the packaging materials sector. However, due to reduced demand in the cloud services business, May's overall revenue growth has slowed. Despite this, packaging materials revenue is expected to maintain a growth rate of over 5%. Future orders from China’s optoelectronic industry, along with expanded cloud services and technological enhancements, are expected to drive significant growth in overall operations. |
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