 2015-06-15 |
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Sector Update: YC Family’s May Revenue—Mixed Results
June 9, 2015, 10:57
By Wang Yi-Xin, Taipei
The YC family has reported its May revenue performance, showing a slight decline for both YC and ACHEM compared to April, while Newzhou Global saw a 3.69% increase over April. With the group's ongoing vertical integration efforts, it is expected that operations will maintain stable growth for the year.
In May, YC (4306) reported consolidated revenue of NT$1.502 billion, a 4.89% decrease from April. For the first five months of the year, revenue is down 13.78% compared to the same period last year. ACHEM (1715) reported consolidated revenue of NT$907 million in May, a 2.04% decrease from April. For the first five months, revenue is down 7.63% compared to the previous year. Newzhou Global (3171) achieved consolidated revenue of NT$147 million in May, a 3.69% increase from April. However, revenue for the first five months is down 5.08% year-on-year.
Following a significant drop in crude oil prices at the end of last year and the first quarter of this year, YC faced operational pressures in the first quarter. However, with a gradual recovery in oil prices and proactive asset activation, along with the anticipated completion of the New Taipei City MORE project by the end of the year, the company's revenue and profitability in the second quarter are expected to show significant improvement compared to the first quarter. Therefore, stable growth for the year is anticipated.
ACHEM has benefited from the gradual realization of vertical integration effects, with increasing shipment volumes. The revenue in May declined 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.
Newzhou Global, following the integration of its packaging materials business, has shown stable profit performance in Taiwan. 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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