 2016-04-11 |
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"Hot Sector: Chinese Annual Maintenance Boosts PP Group"
April 11, 2016
Due to the upcoming annual maintenance of three polypropylene (PP) plants in China, PP prices surged by 2% last week. According to Platts, the PP price has reached $1,019 to $1,021 per ton. This price increase led to significant gains in the stock prices of Ronghua (1704) and Taihua (1326). Ronghua's stock rose nearly 3% in the past week, with foreign investors buying over 3,500 shares in the last three days, closing at NT$34.85 on Friday (April 8). Taihua also saw a rise of NT$1.5, ending at NT$80.1 on Friday.
Yongguang (1711) also experienced a stock increase of NT$1.05, closing at NT$21.3 on Friday. Yongguang announced that March revenue reached NT$941 million. By sector, March saw a 17% year-over-year decrease in dye chemicals, an 18% increase in specialty chemicals, a 22% increase in carbon powders, a 12% decrease in electronic chemicals, and a 21% increase in pharmaceutical chemicals. Yongguang noted that the significant reduction in dye chemicals was due to last year's price hikes related to raw materials, while the electronic chemicals sector continued to struggle due to the ongoing poor conditions in the LED and optoelectronic industries, though there was improvement.
For YC Group (4306), despite last year's challenges from falling oil prices and weak market demand in China affecting their film business, the outlook for this year is more stable. If oil prices do not experience significant fluctuations or declines, and with the recognition of revenues from the ongoing development projects of Wangzhou, as well as the commencement of production at WanZhou Petrochemical, the company's operational performance is expected to remain steady.
Achem (1715), although facing a sluggish domestic market in China last year, saw continued growth in its tape business due to stable export orders to the Americas and the Middle East. Looking ahead, with the completion of production at the Hai'an plant in the second quarter and raw material prices remaining low, the overall operation is expected to grow this year. |
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