 2012-09-05 |
|
|
[The recovery in petrochemical prices and the rebound in the BOPP market have boosted YC (4306) tape sales. In addition, niche capacity from ACHEM (1715) and its Vietnam plant has started contributing, steadily lifting operations in the second half of the year. YC’s performance hit a low point in June and July due to the sluggish economy. However, demand in August picked up significantly, with analysts estimating double-digit month-on-month growth. Full-year revenue is expected to grow by 5-10%, with an EPS of around NT$2.
In the second quarter, a steep drop in petrochemical prices hurt YC’s BOPP film business. However, the packaging material and tape sectors, including ACHEM, remained relatively stable in demand, and easing cost pressures, along with contributions from the Wangzhou construction project, provided further support to operations. YC’s first-half revenue reached NT$2.916 billion, a 6.73% year-over-year increase, with an EPS of NT$0.96, down 18.24% compared to the same period last year.
YC noted that ACHEM benefited from the group's tape business integration strategy. Additionally, the effects of Xinzhou Global’s distribution channel, Bao Dash, began to emerge. ACHEM’s first-half revenue reached NT$2.647 billion, a 24.21% year-over-year increase, with an EPS of NT$0.62, up 19.6% year-over-year. However, profits from Weida Optoelectronics, in which YC holds an investment, decreased due to the weak electronics market. Moreover, the group’s undistributed earnings of NT$500 million from last year incurred an additional 10% tax, increasing tax expenses by NT$50 million and affecting first-half profit performance.
Looking ahead to the second half, YC remains cautiously optimistic. Despite global economic uncertainties, the group’s production and sales plans are clear. ACHEM and the new capacity from the Vietnam plant will begin production in the fourth quarter. Additionally, Wangzhou's NT$700 million construction project still has 30% of its total sales to be recognized, which will further boost operations for YC and ACHEM.
YC operates three BOPP film production lines in Taiwan and three in China. Taiwan’s operations are supported by stable orders from major customer 3M, ensuring steady sales and profits. However, weak market conditions in China have led to slight operational losses, which have weighed on profitability. With the recent rebound in petrochemical prices, operations in China’s BOPP sector are expected to improve gradually.
In addition, YC and ACHEM together operate 30 global OPP tape production lines. ACHEM’s new niche production lines, set to start operating in the second half, will help boost performance and improve revenue structure.]
(News Source: Commercial Times – Reporter Peng Xuanyi, Taipei) |
|
