The Motley Fool

China Sunsine Chemical Holdings Ltd’s Latest Results: Lower Profit but Cash Flow Remained Strong

At the end of April, China Sunsine Chemical Holdings Ltd (SGX: CH8) announced its financial results for the first- quarter of 2019. 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 fell 20% year-on-year to RMB 686.6 million.
  2. Gross profit also declined by 21% year-on-year to RMB 235.7 million.
  3. Gross profit margin for the quarter dropped marginally from 34.9% last year to 34.3%.
  4. Net profit after tax worsened by 26% year-on-year to RMB 110.2 million.
  5. Similarly, China Sunsine’s diluted earnings per share (EPS) was down by 26% year-on-year to RMB 22.43 cents.
  6. As of 31 March 2019, the company had RMB 1.17 billion in cash on the balance sheet and zero debt.
  7. Operating cash flow for the quarter was RMB 155.4 million, up from RMB 43.4 million last year. The improvement in operating cash flow was mainly due to better working capital management.
  8. Sales volume for the quarter increased by 5% year-on-year to 38, 715 tons. Overall average selling price slid by 24% year-on-year to RMB 17, 637 per ton from RMB 23, 168 per ton.
  9. Xu Cheng Qiu, China Sunsine’s executive chairman, commented on the company’s strategy going forward:

“We will continue to maintain our strategy that “higher production leads to higher sales volume, which in turn stimulates even higher production”. We will expand capacity to gain more market share in the rubber chemicals industry. We will also continue to focus on environmental protection and safety production, as well as production technology and innovation, to gain a competitive edge over other producers.”

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.

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.