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China Sunsine Chemical Holdings Ltd’s Latest Results: Revenue Up 22% While Net Profit Jumps 85%

On Monday, China Sunsine Chemical Holdings Ltd (SGX: CH8) announced its financial results for the third quarter ended 30 September 2018. As a quick introduction, China Sunsine is a specialty chemical producer selling rubber accelerators, insoluble sulphur and antioxidants used for the production of rubber tyres.

Here are 10 things investors should know from the latest earnings announcement:

1. Revenue for the quarter jumped 22.0% year-on-year to RMB 775.6 million. The increase was due to the higher sales volume and average selling price (ASP).

2. Gross profit improved by 50.0% year-on-year to RMB 254.0 million.

3. Gross profit margin for the quarter was up from 26.8% last year to 32.7%.

4. Net profit after tax was up by 85.0% year-on-year to RMB 143.4 million.

5. China Sunsine’s diluted earnings per share (EPS) was up by 85% year-on-year to RMB 0.292.

6. As of 30 September 2018, the company had RMB 822.3 million in cash on the balance sheet with no debt.

7. Operating cash flow for the quarter was RMB 271.5 million, up from RMB 121.1 million last year. The improvement in operating cash flow was mainly due to improvement in profitability and better working capital management.

8. Trade receivables was up from RMB 637.8 million at 31 December 2017 to RMB 806.8 million at the end of quarter. During the same period, inventories declined from RMB 212.1 million to RMB 197.5 million.

9. Sales volume for the quarter increased by 9% year-on-year to 37,166 tons. Overall ASP increased by 12% year-on-year to RMB 20,706 per ton from RMB 18,541 per ton.

10. Xu Cheng Qiu, executive chairman of China Sunsine, commented:

“I am glad that the Group has achieved another excellent performance in 3Q2018. Despite a decline in ASP in this quarter, the Group was able to maintain a reasonably good profit margin level due to its core competences of stable delivery and superior quality. Stringent environmental protection and safety requirements, and frequent inspections will be the norm in next three years. The Group will continue to place emphasis on and invest heavily in environmental protection and safety, and technology innovation, to further strengthen its market leadership position.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.