Turnover hit a new high in 2014, up 4% to HK$10.26 billion, and total product sales increased 7% year-on-year
News: March 17, the world's largest producer of acetate solvents and One of China's largest chemical products manufacturers, Yeshi Chemical Group Co., Ltd. (stock number: 00408) ("Ye's Chemical" or "Group") announced its full-year results for the 12 months ended December 31, 2014 (the "Review Period").
review period, continued weakness in global and Chinese economic growth, reduced demand for consumer goods and a downward adjustment in the RMB exchange rate have all had a negative impact on the development of the industry. In the face of the difficult business environment, the Group's turnover still recorded a new high of HK$10,255,839,000, exceeding the pre-set medium-term target of HK$10 billion, an annual growth rate of 4%, while total product sales increased by 7% year-on-year to 973,600 tonnes. During the year, shareholders should have a net profit of HK$223,182,000, down 11% year-on-year, as the Group's solvent business was affected by the fall in oil prices and the
business recorded a one-time plant consolidation expense as a result of the overall consolidation optimization, as well as exchange losses due to the depreciation of the RMB. The Group has always adhered to the principle of sound and prudent financial management, so that the lending ratio has been kept at a healthy level of 58.1%. Basic earnings per share were HK$39.7 (for the same period in 2013: HK$44.6).
's Board of Directors recommended a closing dividend of HK$15 per share (for the same period in 2013: HK$15 per share), together with a interim dividend of HK$10 per share for the full year and a total of HK$25 per share for the full year (for the same period in 2013: HK$25 per share).
, Chairman of the Company's Yee Chemical Company, said: "Although the RMB exchange rate reduction will result in exchange losses during the period, the Group's real business performance and cash flow will not be affected." Last year, we made great efforts to optimize the coatings business, civil
and resin business into the Bauhinia Coatings Group, which will comprehensively enhance the competitiveness of the coatings business, and the costs associated with plant integration have been reflected in the review period. Although China's growth target has slowed in recent years, it remains the world's most dynamic and opportunity-filled market today. Group rooted in China for many years, fully prepared, confident that by virtue of their own strength to share the fruits of the country's economic take-off. After the integration and optimization of the Group's core business, a streamlined management structure and clear market positioning will further enhance the overall competitiveness, synergies will gradually emerge. During the
Business Review and Outlook
review period, the turnover of the solvent business reached a new high of HK$6,575,516,000, an increase of 7% over the same period last year. Thanks to increased demand for environmentally friendly solvents, the Group's main product acetate has maintained a strong sales growth rate of 679,000 tonnes, up 6% year-on-year, thanks to its outstanding overall competitiveness. Sales of acrylates also met expectations, reaching 63,000 tons.
In addition to the exchange losses caused by the devaluation of the Renminbi, the Group was required to make a provision of HK$28,814,000 for impairment of inventories and raw materials at the end of last year as a result of the sharp drop in the price of solvent products, resulting in a decrease of 14.5% to HK$226,657,000 in operating profit, net of exchange gains and losses, and a slight decrease of 1.6% on a year-on-year increase in operating profit and loss. Operating profit from acetate, the main product, continued to grow, rising by 4.9% during the period.
response to changes in the operating environment, management has launched a response to actively expand acetate production capacity and enhance the product portfolio. The Group will accelerate the construction of a new production line with a production capacity of 300,000 tons of acetate at the Taixing plant in Jiangsu Province, which is expected to be put into operation in the second quarter of 2015, resulting in a total production capacity of more than one million tons. At the same time, the Group will develop a series of acetate products with higher added value. In addition, the Group plans to increase its scientific research investment in two major products, acetate and acrylates, and gradually retrofit production equipment to further save energy and material consumption.
the coatings business recorded a 4% increase in the total sales tonnage during the period, and then a new high. However, the lower unit price of sales due to lower material prices and the lower unit price of
which led to the increase in sales were also relatively low compared to oily coatings, thus reducing the overall sales volume of the coatings business. Turnover in the coatings business in 2014 was HK$3,350,517,000 (including ink business), a slight decrease of 1% over the same period last year. Operating profit from the coatings business was HK$95,300,000, while operating profit and loss, not including exchange gains and losses, decreased by 14.1% year-on-year, mainly due to one-time plant consolidation costs of HK$20,768,000 resulting from the consolidation of the business.
review period, the Group's focus is on the full integration of civil building coatings, industrial coatings and resin business, in order to form the Bauhinia Coatings Group. The new management core team, which combines the original class elite with industry professionals, was officially launched on January 1, 2015. Bauhinia Coatings Group will bring technical, sales, procurement, logistics and production integration benefits, synergies and brand benefits to the coatings business.
ink business, the overall ink business decreased by 4% to HK$1,603,868,000 due to weak domestic demand and flat sales in the food packaging ink business due to weak domestic demand and individual food safety incidents. In addition, the printing of paper-based paper inks, affected by the popularization of electronic media, slowed market demand, resulting in sales volume only recorded an increase in units. The Group will comply with China's environmental trends, the introduction of the market's first "alcohol-soluble" and "water-like" two varieties of ink, to compete for the first opportunity. At the same time, following the acquisition of "China Color Resin" by the ink business at the end of 2013, the Group will further optimize the production above and downstream of the ink business to improve the cost structure.
Lubricants business recorded a turnover of HK$431,837,000 during the review period, a decrease of 7% over the same period in 2013, while sales decreased by 2% in tonnage to 25,200 tonnes. In the face of a severe and changing business environment, the Group will actively adjust its sales strategy and carry out rigorous cost control.
Mr. Ye Xuan, Chairman of the Executive Committee of Ye's Chemical Industry, concluded: "The competition situation in the dissolved business is still fierce, but the main product acetate solvent still occupies a leading position in the market, and the Group will continue to expand its production capacity and enrich its product line in order to stabilize the market; The integration benefits of the plants will be gradually reflected, the ink sector will also be in line with market trends, the development of environmentally friendly water-based and alcohol-based inks is ready to be put on the market this year, and lubricants will continue to examine the cost structure in the face of its depressed market environment. The Group will adhere to three major development strategies, including achieving scale, brand and research results, a focus on sales development, and strict cost control to enhance profitability for sustainable long-term and healthy development. ”