(10-08-2014, 10:34 AM)Curiousparty Wrote: [ -> ]Human tends to like to interpret and extrapolate performance in "linear terms". Can we continue to extrapolate sunsine's upside performance in a similar fashion? The high ASP might not be sustainable for next few quarters, and as such the lofty valuation as touted by analysts might not be valid. (IMHO)
http://www.nextinsight.net/index.php/sto...-discountq
From 100 odd lots daily volume traded just a few months back to now 3 to 4 k lots traded per day since the confirmation of surge in profits, it can only implied that the best is yet to come. I am salivating at the huge jump in EPS especially. If it improve further in the coming quarters this is the stock to watch regardless of it being s-chip or not. In any case based on who are their clients and the regular dividend, this businesses have to be real. Yes, they have bank borrowing but the money was spend on capex, not unaccounted for or missing into some black holes.
The working capital for China sunsine has increased from about -RMB0.7mil to RMB374mil between 2008 to Q2 FY14. Short-term loan increased in tandem from RMB0mil to RMB319mil. Seems like age of receivables are getting lengthier. Any concern about this?
(10-08-2014, 07:21 PM)GPD Wrote: [ -> ]The working capital for China sunsine has increased from about -RMB0.7mil to RMB374mil between 2008 to Q2 FY14. Short-term loan increased in tandem from RMB0mil to RMB319mil. Seems like age of receivables are getting lengthier. Any concern about this?
It looks very familiar. Buyers BEWARE!
Majority of their receivables are underwrite by banks so it should be safe. Nevertheless it's good to be wary and if vested better constantly keep a close watch on the stock. At least the PE is only about 4 times unlike a similar set up that listed in shen zeng with PE of 22x. This tell us the valuation of sunsine is more realistic and in line with company's performance.
(10-08-2014, 07:21 PM)GPD Wrote: [ -> ]The working capital for China sunsine has increased from about -RMB0.7mil to RMB374mil between 2008 to Q2 FY14. Short-term loan increased in tandem from RMB0mil to RMB319mil. Seems like age of receivables are getting lengthier. Any concern about this?
GPD
Can you let us know how you got the figure of RMB 374m for working capital for 2Q 2104?
If your concern is with the high trade receivables (RMB 569m) as at 30 June 2014, you may wish to note that trade receivables relative to revenue has remained below 30% both at year end and middle of year. Higher sales nearer the end of a financial period would result in more outstanding debts.
End of ..……………………….…...2010….2011..…2012.…2013
Revenue (RMB m)…………..……991….,175….1,417…1,696
Trade receivables (RMB m)….242….…277……403…….479
%.....................................24.4……23.6….28.4…..28.2
The percentage on 30 June was not much different from year end:
………………………………..………...2011..…2012.…2013…..2014
4*2Q Rev (RMB m)……………1,257….1,453…1,696...2,178
Trade receivables
as at 30 June (RMB m)….….…280…..…387…….427…...569
%.....................................22.3….…26.6…..25.2..…26.0
More importantly, some customers have to get banks to underwrite the debts they owe to Sunsine, resulting in very low impairment of trade receivables:
2010….RMB 0.31m
2011….RMB 0.53m
2012….RMB 0.05m
2013….RMB 0.87m
Given that rubber accelerators are now in short supply, Sunsine should be in a comfortable financial position.
It is quite improbable for ASP of Sunsine's products to keep "rising to the moon". Company has made it quite clear that ASP will "normalize" when other companies progressively comply with the regulations.
The other point to note is that the rate of increase of vehicles is likely to slow down considerably with the curbing policies in place to ease pollution and traffic congestion.
It is ironical that the same factor (i.e. pollution control) that helps to propel Sunsine also has a "curbing effect" 
**************
Extract from Q2 result
In the 1st half of 2014, China’s economy grew 7.4%1. The automakers sold 11.682 million vehicles in
the world's largest car market, growing 8.4 percent year-on-year. Moving forward, with the rapid
increase of the middle class population, auto sales are likely to increase.
However, the increase in car
sales may slow down as more cities have implemented curbing policies in its effort to ease air
pollution and traffic congestion.
As the Chinese government is continuously placing more emphasis on environmental protection,
some players which have failed to meet the relevant environmental regulations were forced to
suspend their production.
However, those players which comply with environmental regulations will
slowly resume production. As such, the market supply of accelerators will progressively increase in
the coming year. The Group anticipates the price of accelerators will normalise when supply increases.
The Group also anticipates that Insoluble Sulphur will continue to face intense competition. The sales
volume of our Anti-oxidant products will increase as our products are accredited by more customers.
Curiousparty
You are absolutely correct in saying “It is quite improbable for ASP of Sunsine's products to keep "rising to the moon". Company has made it quite clear that ASP will "normalize" when other companies progressively comply with the regulations.”
But you may want to read Amfraser report which states:
“During Sunsine’s results briefing, we found out that orders and prices are usually fixed one quarter in advance. With the further spike in spot rubber accelerator prices in 2Q14, we can expect more ASP appreciation in 3Q14.”
In other words, the RMB 60m profit was achieved with 1Q spot prices that were still not high.
The chart in Nextsight article showed that accelerator prices spiked only in June 2014.
I am looking for RMB 200m profit (RMB 63m for 1st half + RMB 60 for 3Q and 4Q) this year. Good enough.
Noted pls, tks
One-off bonanza. Share price might burst up and then euphoria will die back down to reality again..
(e.g. Dukang went from a low of 20 cents up to 90 cents and back down to below 20 cents. pray that u don't buy at the 90 cent level)
(11-08-2014, 11:37 AM)simpleman Wrote: [ -> ]Curiousparty
You are absolutely correct in saying “It is quite improbable for ASP of Sunsine's products to keep "rising to the moon". Company has made it quite clear that ASP will "normalize" when other companies progressively comply with the regulations.”
But you may want to read Amfraser report which states:
“During Sunsine’s results briefing, we found out that orders and prices are usually fixed one quarter in advance. With the further spike in spot rubber accelerator prices in 2Q14, we can expect more ASP appreciation in 3Q14.”
In other words, the RMB 60m profit was achieved with 1Q spot prices that were still not high.
The chart in Nextsight article showed that accelerator prices spiked only in June 2014.
I am looking for RMB 200m profit (RMB 63m for 1st half + RMB 60 for 3Q and 4Q) this year. Good enough.
(11-08-2014, 05:42 AM)portuser Wrote: [ -> ] (10-08-2014, 07:21 PM)GPD Wrote: [ -> ]The working capital for China sunsine has increased from about -RMB0.7mil to RMB374mil between 2008 to Q2 FY14. Short-term loan increased in tandem from RMB0mil to RMB319mil. Seems like age of receivables are getting lengthier. Any concern about this?
GPD
Can you let us know how you got the figure of RMB 374m for working capital for 2Q 2104?
If your concern is with the high trade receivables (RMB 569m) as at 30 June 2014, you may wish to note that trade receivables relative to revenue has remained below 30% both at year end and middle of year. Higher sales nearer the end of a financial period would result in more outstanding debts.
End of ..……………………….…...2010….2011..…2012.…2013
Revenue (RMB m)…………..……991….,175….1,417…1,696
Trade receivables (RMB m)….242….…277……403…….479
%.....................................24.4……23.6….28.4…..28.2
The percentage on 30 June was not much different from year end:
………………………………..………...2011..…2012.…2013…..2014
4*2Q Rev (RMB m)……………1,257….1,453…1,696...2,178
Trade receivables
as at 30 June (RMB m)….….…280…..…387…….427…...569
%.....................................22.3….…26.6…..25.2..…26.0
More importantly, some customers have to get banks to underwrite the debts they owe to Sunsine, resulting in very low impairment of trade receivables:
2010….RMB 0.31m
2011….RMB 0.53m
2012….RMB 0.05m
2013….RMB 0.87m
Given that rubber accelerators are now in short supply, Sunsine should be in a comfortable financial position.
I got it by cumulatively adding the WC under the cashflow statement from 2008 to Q2 2014. 2008 is the earliest I start compiling the stats for China Sunsine.
http://www.nextinsight.net/index.php/sto...n-controls
A lot of analysts (e.g. CIMB) predicted that some S-chips can hit $X target level (e.g. China Essence, China XXX,etc). China Essence is only 1 cent now.
My humble view is lock in profit on sunsine and run
Does AmFraser Securities dare to put its head on the line and declare 65 cents as a target profit level for this S-chip?