China Sunsine Chemicals Holdings

[tiongkokgor]

China Sunsine has been doing well for all aspects except the “steam” business. They incurred a loss of $1.6 million in 2016. Would it be a startup loss? Any view from the rests? Thanks.

I may have missed it but I can't find the above in AR16 and 4Q16 reports. In any case, the majority of the steam generated are meant for internal consumption and any excess will be channelled to national grid for sale to external party. I think something like that was mentioned in one of the results briefings I attended. The latest is that they are adding one more boiler to cope with higher demand of steam. I think that is positive. 

In the upcoming FY17 results to be released in Feb 2018, I would cast the spotlight on top shareholders list. With the sales of treasury shares in May 2017, some 'institution' investors should made the top 20 list even if their holding is as low as around 1 million range. With extremely high volume (30m plus if I am right) traded right after the trading resumed following the sales of treasury shares, I want to see whether top holders like Robert Stone, Chia Kee Koon etc continue their original holdings, reduce/increase or bail out. Theses guys are holding in the range of 10m to 20m and their actions say a lot, especially with the subsequent developments when price hit the high of 1.09 and 'flash crash' to 92 cents on 14 Nov 2017 and further down to 82 cents on 6 Dec 2017. 

Of course, the price has slowly inch up again but I shall not focus on the share price, at least not at the moment. I am expecting to see stronger cash flow, higher ROE and eps. My holding is somewhat diluted with the sales of treasury shares and before the sales, I am confident eps will be at least 12.5 cents to 13 cents and now I think 12.5 cents may still be achievable. I am looking at dividend payout of at least 2.5 cents (including the .5 cents already paid) but somehow, I am inclined to believe that it would be more.

The RMB1.6 mil loss info can be found in the segment reporting table in page 14 of the 4QFY16 results announcement.

The table also disclosed that RMB72 mil and RMB4.8 mil were internal and external sales respectivley. Maybe some upside to the heating power/steam business in the future?

Sunsine's competitors, Yanggu Huatai and Tianjin Kemai, do not have internal steam generation capabilities.