China Sunsine Chemical Holdings has reported 11% high earnings for the 2HFY2020 ended December of RMB136.4 million ($27.9 million), compared to earnings of RMB123.0 million in 2HFY2019.

 

For the full-year, earnings fell 44% to RMB218.8 million from RMB388.9 million in FY2019 due to lower revenue arising from lower average selling prices (ASPs).

 

The lower ASPs were a result of lower raw material prices and the impact of Covid-19.

Earnings per share (EPS) for the 2HFY2020 grew 12% y-o-y to 14.04 RMB cents and 43% lower y-o-y for the FY2020 to 22.50 RMB cents.

 

Group revenue for the 2HFY2020 increased 1% y-o-y to RMB1.29 billion due to the higher sales volume, but was offset by the lower ASP.

 

ASP fell 9% y-o-y to RMB13,579 per tonne, from RMB14,877 per tonne a year ago, mainly due to the lower raw material prices and higher competition in the rubber chemicals industry.

 

Profit before tax for the FY2020 fell 34% y-o-y to RMB300.5 million mainly due to the lower revenue arising from lower ASP, especially in 1HFY2020.

 

As at end-December, cash and cash equivalents stood at RMB1.32 billion.

 

For the 2HFY2020, a final dividend of 1 cent per share has been proposed, same as last year.

 

&ldquo As we enter 2021, we are seeing positive signs from the downstream demand the rubber chemicals industry is further consolidating and raw material prices are increasing. All these factors will provide support for our ASP. With our two major expansion projects slated for completion in 2021, we will be able to strengthen our market leadership position further. Coupled with our other competitive advantages, such as our strong balance sheet and financial position, ability to provide high-quality products, large-scale production, a variety of product range of rubber chemicals, and compliance with national environmental protection laws and regulations, we are confident about the group&rsquo s profitability in the next 12 months," says executive chairman Xu Cheng Qiu.

CHINA SUNSINE: Grows market share amid Covid-19, stock price +41%

From 35 cents at the start of 2H2020, the share price of China Sunsine has recently risen to 49.5 cents.

UOB Kay Hian recently set a target price of 58 cents (see:  CHINA SUNSINE: On recovery mode, 46% net profit growth in 2021?)