I see the threads here, Nextinsight and SJ became active again with sunsine price climbing. Apparently a lot of people are in the money once share price is above 40 cents. I have been busy and still hold the view it's unhealthy to spend too much time in forums. Best is to seek out views of worthy forumers and after some time, we should know whose views worth our time. I am now finally got the time to go through the AR that I received last week. Nothing that those vested should know but don't know. However, it seems that a couple of big shareholders have increase their holding quite substantially. I am cautiously optimistic and I think we can have a better assessment when the 1Q FY15 results are announced.
(18-04-2015, 10:41 PM)Sfsh12 Wrote: [ -> ]http://zgxcl.oilchem.net/x/p_281_110_553_0_1.html
Based on prices reported in the above website, selling price of rubber accelerator NS (also known as TBBS) has been resilient to date even though there is a sharp fall in aniline (raw material) prices. Rubber accelerator NS (also known as TBBS) is a key product of China Sunsine.
TBBS is made from MBT, which is in turn produced from aniline.
TBBS price stayed at RMB 25,800 for a long time before edging up to RMB 26,000 in Jan 14.
When MBT price surged in Mar 14, TBBS price rose to RMB 27,000 in Mar and 29,500 in June.
When MBT price dropped in Nov 14, partly due to plunge in aniline price, TBBS price dipped RMB 500, and has remained since.
(Aniline price, used to be around RMB 10,500 in early 2014, is now RMB 6,700.)
TBBS does not exhibit any characteristics of a commodity. It is still in short supply, else its price should have been dragged down by lower aniline price.
Sunsine management has indicated before that higher technology is required to produce TBBS. Of the five Shangdon accelerator companies which take part in the price survey, only one, 山东曹县斯递尔化工科技有限公司, manufactures TBBS.
Stunned.
Another +ve profit guidance from Sunsine for 1QFY2015 results.
I was not expecting much improvement over 1QFY2014 results because prices of rubber accelerators have been falling and the latest China's economic growth rate at 7% is the lowest in 7 years.
Falling prices of raw materials helped? They managed to not pass the cost savings to the customers?
What has Sunsine done?
(21-04-2015, 07:31 PM)piaopiao Wrote: [ -> ]Stunned.
Another +ve profit guidance from Sunsine for 1QFY2015 results.
I was not expecting much improvement over 1QFY2014 results because prices of rubber accelerators have been falling and the latest China's economic growth rate at 7% is the lowest in 7 years.
Falling prices of raw materials helped? They managed to not pass the cost savings to the customers?
What has Sunsine done?
I also did not expect the announcement of 'Positive Profit Alert'. However, the comparison is against 1QFY14, which recorded a net profit of only RMB 22.8 millions. I would like to compare the upcoming results with 4QFY14 or even 2QFY14 to have a meaningful comparison. I have left out 3QFY14 for the time being as that quarter was exceptional as it mark the start of the tightening and enforcement of the environmental laws, which we by now know benefited Sunsine a great deal.
Going forward, Sunsine should continue to do well. As the industry leader, they may not have to pass too much of the saving in material cost to customers if they can maintain market shares and hence, the increase in gross profit margin. This is possible if their competitors remain out of business for failing to comply with the stricter environmental laws. The increase in profit could also due to the increased sale of TBBS, shall wait for the results and assess further.
Sunsine has focused on technological innovation to produce high-grade accelerators cleanly and efficiently. For example, it is now able to produce DCBS without discharging waste water.
The recent free fall of aniline price has not caused prices of high-grade rubber accelerators (such as TBBS) to retreat much.
Lower aniline price would also benefit.
In 2103, Sunsine spent RMB 400m on aniline purchase. Last year, because of lower price, the same sum bought more aniline to enable Sunsine to produce 12% more rubber chemicals.
Aniline price in 1Q 15 was 40% lower than 1Q 14. As 22% of 2014 output was produced in 1Q, the cost of aniline used in 1Q 14 should be at least RMB 88m. Cheaper aniline in 1Q 15 would have saved RMB 35m, a considerable amount compared with 1Q 14 pre-tax profit of RMB 31m .
By the way, 1Q is the weakest quarter because production ceases during the long holidays during Chinese New Year. However, I will not be surprised if 1Q 15 profit turns out to be not much lower than 4Q 14 profit of RMB 54m.
(21-04-2015, 07:31 PM)piaopiao Wrote: [ -> ]Stunned.
Another +ve profit guidance from Sunsine for 1QFY2015 results.
I was not expecting much improvement over 1QFY2014 results because prices of rubber accelerators have been falling and the latest China's economic growth rate at 7% is the lowest in 7 years.
Falling prices of raw materials helped? They managed to not pass the cost savings to the customers?
What has Sunsine done?
It is also out of my expectation.
Let's see the detail. I have very likely missed a gem again
(not vested)
(21-04-2015, 08:50 PM)portuser Wrote: [ -> ]Sunsine has focused on technological innovation to produce high-grade accelerators cleanly and efficiently. For example, it is now able to produce DCBS without discharging waste water.
The recent free fall of aniline price has not caused prices of high-grade rubber accelerators (such as TBBS) to retreat much.
Lower aniline price would also benefit.
In 2103, Sunsine spent RMB 400m on aniline purchase. Last year, because of lower price, the same sum bought more aniline to enable Sunsine to produce 12% more rubber chemicals.
Aniline price in 1Q 15 was 40% lower than 1Q 14. As 22% of 2014 output was produced in 1Q, the cost of aniline used in 1Q 14 should be at least RMB 88m. Cheaper aniline in 1Q 15 would have saved RMB 35m, a considerable amount compared with 1Q 14 pre-tax profit of RMB 31m .
By the way, 1Q is the weakest quarter because production ceases during the long holidays during Chinese New Year. However, I will not be surprised if 1Q 15 profit turns out to be not much lower than 4Q 14 profit of RMB 54m.
Thank you for the quick analysis.
China sunsine is definitely one of the better S chips in sgx. I am expecting a 100% increase in net profit compared to 1Qtr 2014.
(21-04-2015, 09:06 PM)mslee888 Wrote: [ -> ]China sunsine is definitely one of the better S chips in sgx. I am expecting a 100% increase in net profit compared to 1Qtr 2014.
There may be further positive surprises.
Sunsine has alerted that its 1Q profit was substantially higher. When alerts were made in the past quarters, profits turned out to be around 2 times higher quarter on quarter:
2014 2013 % change
2Q RMB 60.2 RMB 20.5 190
3Q RMB 83.0 RMB 27.1 210
4Q RMB 54.2 RMB 17.5 210
1QFY2014 net profit after tax was RMB 22.8 mil. QFY2015 NPT RMB 68.4 mil?
Like mslee888, I will be very happy if it is 100%, or RMB 46m.
Sunsine has stepped up production of 'green' accelerators such as TBBS (known as NS in China) in place of inferior ones.
中国化工报 (2011-08-15) reported that Sunsine had increased its TBBS capacity to 20,000 tonnes (35% of total accelerator capacity of 56,500 tonnes in 2011), and stopped producing MBS (known as NOBS in China):
"
NS作为世界公认的绿色助剂，是促进剂NOBS产品的理想替代品，是近年来发展最快的产品之一。为此，公司抓住机遇，开发了NS新产品，并采用国际先进的产品质量标准，申请了国家发明专利。目前，公司开发的NS产品达到世界技术领先水平，NS产能达到20000吨，位居全国第一，同时公司果断淘汰了落后的NOBS产品，实现了产品结构的调整，向绿色化工迈出了一大步。"
http://www.sunsine.com/news_detail/newsId=69.html
In its 3 Nov 14 business update, Sunsine stated that it stopped producing DCBS earlier and converted the facility to produce TBBS:
"
Shandong Sunsine has converted its DCBS facility to produce TBBS due to the higher market demand for accelerator TBBS and the rising cost of production of DCBS. In addition, during the production process of DCBS highly pollutive wastewater is generated.
However, as a result of improved technology, the production cost of DCBS has reduced and at the same time the process no longer generates highly pollutive wastewater.
Therefore, Shandong Sunsine is reactivating its DCBS facility and building a new DCBS facility with 8,000-ton per annum capacity. The budget for this facility is approximately RMB 9 million and it is expected to be completed by end of this year."
Sunsine is benefitting from higher TBBS price (RMB 29,000 [VAT-inclusive] in 1Q 15 vs RMB 25,800 a year ago), and lower aniline price (RMB 7,000 now vs RMB 10,000 in early 2014).
It is interesting to note that Sunisne has recently reintroduced DCBS, having found a cheaper way to produce it without discharging waste water.
DCBS is as high-priced as TBBS, based on:
https://www.zauba.com/importanalysis-RUB...eport.html