although very capital intensive, sunsine is helped by having a much greater EOS (economy of scale) compared to the other much smaller players. Hence, sunsine has a much lower cost structure and it can afford to play down the prices for the last few years to drive out and suffocate its competitors.
it is a virtuous cost cycle for sunsine. As more companies die out, EOS will get higher and cost structure (per unit volume) will be further lowered.
if everything pans out as pointed out by Portuser, sunsine share price should hit a new high over the next few quarters.
(08-05-2014, 11:41 AM)Sfsh12 Wrote: [ -> ]Based on the 1Q2014 announcement by Sunsine, that some competitor had suspended their operations due to Government action on environmental protection, resulting in a decrease in supply of rubber accelerators, Sunsine may not be a price taker in the current situation. The ability to raise ASP of accelerator in 1Q also indicates that Sunsine has some pricing power.
Are these competitors able to make a come back? Is it a simple matter of installing new environmentally friendly equipment and reconfiguring their existing production lines? At what cost and is re-accreditation by tyre manufacturers required?
(07-05-2014, 11:43 PM)donmihaihai Wrote: [ -> ]GPM on the following periods.
The average selling price of accelerators was as follows:
1st 9 months of 2011 (before
Price cut to grow market share)….…..RMB 21,150 - 25.2%
4Q 2011……………………………………………..RMB 19,600 - 20.54%
2012……………………………………………………RMB 18,610 - 17.2%
2013……………………………………………………RMB 18,480 - 18.16%
4Q 2013........................................RMB 18,230 - 19.83%
1Q 2014………………………………………………RMB 19,330 - 19.19%
For a price taker company in the chemical industry, ASP is just half of the story. GPM depends on input raw materials and utilisation as well.
(08-05-2014, 11:41 AM)Sfsh12 Wrote: [ -> ]Based on the 1Q2014 announcement by Sunsine, that some competitor had suspended their operations due to Government action on environmental protection, resulting in a decrease in supply of rubber accelerators, Sunsine may not be a price taker in the current situation. The ability to raise ASP of accelerator in 1Q also indicates that Sunsine has some pricing power.
Are these competitors able to make a come back? Is it a simple matter of installing new environmentally friendly equipment and reconfiguring their existing production lines? At what cost and is re-accreditation by tyre manufacturers required?
A similar and more drastic situation happened during 2008. ASP raised to a historical high of approx 26k, but dropped to slightly more than 16K a year later, before back to a more normal ASP of 18-19K
Let see its performance 1-2 quarters later.
(not vested)
2008 and 2009 were exceptional years. The spike in ASP in 2008 was due to the Ölympics effect" while the drop in ASP in 2009 was due to the global financial crisis. Despite the yo-yo in ASP during these two years, the underlying sales volume continue its upward trend. In fact, total sales volume increased by 35% in 2009 as compared to 2008.
(vested)
(08-05-2014, 12:07 PM)CityFarmer Wrote: [ -> ] (08-05-2014, 11:41 AM)Sfsh12 Wrote: [ -> ]Based on the 1Q2014 announcement by Sunsine, that some competitor had suspended their operations due to Government action on environmental protection, resulting in a decrease in supply of rubber accelerators, Sunsine may not be a price taker in the current situation. The ability to raise ASP of accelerator in 1Q also indicates that Sunsine has some pricing power.
Are these competitors able to make a come back? Is it a simple matter of installing new environmentally friendly equipment and reconfiguring their existing production lines? At what cost and is re-accreditation by tyre manufacturers required?
A similar and more drastic situation happened during 2008. ASP raised to a historical high of approx 26k, but dropped to slightly more than 16K a year later, before back to a more normal ASP of 18-19K
Let see its performance 1-2 quarters later.
(not vested)
By the time the ASP improves to the 20,000 RMB per ton level, the counter would have moved by quite a bit.
The recent high of 30 cents will be tested again if ASP were to improve to the 20K level. (IMHO)
(24-06-2014, 09:16 PM)CityFarmer Wrote: [ -> ]More debt in the company, as expected. Debt facilities of RMB 270 mil, and borrowed RMB 250 mil.
(not vested)
http://infopub.sgx.com/FileOpen/CS_Discl...eID=302450
Current borrowings of RMB 250m are
lower than last month's RMB 280m.
Cash flows should be strong on account of rising accelerator prices following suspensions of factories that do not conform with pollution control requirements.
Accelerator prices in China are rising, according to analyst reports on 阳谷华泰, a smaller competitor of China Sunsine listed on Shenzhen stock exchange. Government actions on environmental concerns has forced numerous small factories and a couple of large ones to shut their operations, resulting in a shortage in supply of accelerators.
环保因素推动供给端收缩，橡胶促进剂上行趋势明确
(24-06-2014, 10:35 PM)Sfsh12 Wrote: [ -> ]Accelerator prices in China are rising, according to analyst reports on 阳谷华泰, a smaller competitor of China Sunsine listed on Shenzhen stock exchange. Government actions on environmental concerns has forced numerous small factories and a couple of large ones to shut their operations, resulting in a shortage in supply of accelerators.
环保因素推动供给端收缩，橡胶促进剂上行趋势明确
Thank you for sharing the reports. One of the graphs showed that the accelerator prices shot up because of shortage. But the product names (M, CZ and NS) - what are they pl?
(25-06-2014, 11:20 AM)budgetier Wrote: [ -> ] (24-06-2014, 10:35 PM)Sfsh12 Wrote: [ -> ]Accelerator prices in China are rising, according to analyst reports on 阳谷华泰, a smaller competitor of China Sunsine listed on Shenzhen stock exchange. Government actions on environmental concerns has forced numerous small factories and a couple of large ones to shut their operations, resulting in a shortage in supply of accelerators.
环保因素推动供给端收缩，橡胶促进剂上行趋势明确
Thank you for sharing the reports. One of the graphs showed that the accelerator prices shot up because of shortage. But the product names (M, CZ and NS) - what are they pl?
M is another name of MBT.
CZ is also known as CBS. NS stands for TBBS.
CBS, TBBS and MBTS are major rubber accelerators and they are made from MBT.
The conventional technology of producing MBT is simple but pollutive. According to the analyst report, many small MTB factories in China have ceased operations following government clampdown, resulting in a shortage of feedstock for CBS, TBBS and MTBS.
Sunsine had the foresight of devising cleaner method of producing MBT and it is now capable of producing 45,000 tonnes of MBT a year, of which 39,000 tonnes are used to make CBS, TBBS and MTBS.
Aniline is an important raw material for making MBT. Since aniline price has not changed much, Sunsine 2Q profit is expected to be strong as prices of CBS and TBBS spiked only in March.,
Could we make a good preliminary estimate of how much better would sunsine Q2's result turn out to be?
30% more than last year?
(25-06-2014, 04:55 PM)portuser Wrote: [ -> ] (25-06-2014, 11:20 AM)budgetier Wrote: [ -> ] (24-06-2014, 10:35 PM)Sfsh12 Wrote: [ -> ]Accelerator prices in China are rising, according to analyst reports on 阳谷华泰, a smaller competitor of China Sunsine listed on Shenzhen stock exchange. Government actions on environmental concerns has forced numerous small factories and a couple of large ones to shut their operations, resulting in a shortage in supply of accelerators.
环保因素推动供给端收缩，橡胶促进剂上行趋势明确
Thank you for sharing the reports. One of the graphs showed that the accelerator prices shot up because of shortage. But the product names (M, CZ and NS) - what are they pl?
M is another name of MBT.
CZ is also known as CBS. NS stands for TBBS.
CBS, TBBS and MBTS are major rubber accelerators and they are made from MBT.
The conventional technology of producing MBT is simple but pollutive. According to the analyst report, many small MTB factories in China have ceased operations following government clampdown, resulting in a shortage of feedstock for CBS, TBBS and MTBS.
Sunsine had the foresight of devising cleaner method of producing MBT and it is now capable of producing 45,000 tonnes of MBT a year, of which 39,000 tonnes are used to make CBS, TBBS and MTBS.
Aniline is an important raw material for making MBT. Since aniline price has not changed much, Sunsine 2Q profit is expected to be strong as prices of CBS and TBBS spiked only in March.,