 2012-06-12 |
|
|
Liberty Times / Reporter Hui-Wen Chang / Taipei Report
International oil prices and plastic prices have both fallen sharply, and the ongoing European debt crisis has dampened downstream order fulfillment willingness, leading to significant revenue declines for many plastic manufacturers in April and May. However, major adhesive tape producer YC (4306) reported a slight increase in May revenue, with consolidated revenue reaching NT$1.617 billion, a 5.33% month-over-month increase. ACHEM (1715) also saw a 2.15% increase in revenue in May compared to April.
YC indicated that downstream inventory liquidation has nearly bottomed out, and if oil prices stabilize, it will lead to a rebound in market conditions and a return of orders. Both YC and ACHEM saw their stock prices rise by NT$0.15, closing at NT$26.8 and NT$14.5, respectively.
In April, both YC and ACHEM experienced about a 10% decline in revenue compared to March. YC had predicted that May and June revenues would improve compared to April, and indeed, May saw a recovery. In May, YC's revenue was NT$5.12 billion, down 4.03% from NT$5.34 billion the previous month but up 9.36% from NT$4.68 billion a year ago. Consolidated revenue was NT$16.17 billion, up 5.33% from NT$15.36 billion the previous month and 8.72% higher than NT$14.88 billion in the same month last year.
ACHEM's May revenue was NT$4.75 billion, a 2.15% increase from NT$4.65 billion in April and a 22.52% increase from NT$3.87 billion a year earlier.
YC noted that while the European debt crisis and falling international oil prices have led to weak downstream order fulfillment, stable volume and prices for adhesive tape products and the benefits from the 'Baodashi' packaging channel layout have led to a slight increase in May’s performance. Looking ahead to June, YC expects downstream inventory liquidation to have bottomed out and anticipates a return of stock replenishment demand. However, a confirmed signal of stabilization in oil prices is needed to drive a rebound in the plastic market and bring orders back.
Both YC and ACHEM have expansion plans for this year. YC’s new BOPP film production line, which began operations at the end of last year, is expected to increase capacity by more than 30%. This new line in Zhangbin has a monthly production capacity of 2,500 tons and will be a major driver of this year’s revenue growth. ACHEM’s investments in adhesive tape production in Ho Chi Minh City, Vietnam, and Dongguan and Shanghai, China, will also be completed soon, providing new growth momentum for the group and promising future profitability. |
|
