 2013-09-18 |
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Economic Daily News
Reporter: Zhou Yilang, Taipei
YC (4306) has seen a significant boost this year due to several factors. The activation of the seventh BOPP (Biaxially Oriented Polypropylene) production line, the 30% annual growth in the PVC (Polyvinyl Chloride) tape market in China, and the improved performance of the world’s largest industrial consumables brand 3M are all contributing to an anticipated record high in consolidated revenue, potentially challenging the NT$20 billion mark this year.
In recent years, YC has focused on integrating the industry chain, covering everything from raw materials to tape and packaging channels. The company has expanded its production investments in Taiwan, China, and Vietnam, becoming a vertically integrated manufacturer in the tape industry. In addition to producing BOPP itself, its listed subsidiaries, ACHEM, produce OPP (Oriented Polypropylene) and PVC tapes, while Xinzhou Global serves as a downstream packaging channel provider. On September 17, YC's stock closed at NT$24.40, down NT$0.25.
The benefits of YC’s capital expenditures from last year are becoming increasingly apparent. Originally having six BOPP production lines across Taiwan and China, the seventh line began operation in Taiwan in July, increasing the total monthly output from 12,500 tons to 15,000 tons. Analysts estimate that this will boost YC’s revenue by 20% to 30% for the second half of the year.
ACHEM is benefiting from the recovery of the U.S. manufacturing sector, which has boosted the performance of 3M, the world’s largest industrial consumables brand. ACHEM, a leading player in the global OPP and PVC tape markets, also gains from 3M’s growth.
Additionally, ACHEM is addressing the shortage of PVC tape in China. The company’s Yangmei plant in Taiwan increased its production capacity this year, adding 300 tons per month for PE (Polyethylene) blown film and 3.6 million square meters per month for coating lines, resulting in significant growth for the second half of the year.
Xinzhou Global, which focused on expanding its presence last year to capture market share in China, adjusted its mainland strategy significantly in the second quarter, including changes to its production and sales structure and adopting new marketing strategies. The effects of these adjustments are expected to improve the company’s performance in the second half of the year.
Analysts note that as demand in the Chinese market continues to rise and with YC’s new production capacities coming online, the third quarter’s performance for tapes, films, and packaging channels will likely exceed that of the second quarter. The full-year consolidated revenue is expected to approach the NT$20 billion target. |
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