China Sunsine Chemical - CGS-CIMB Research 2022-04-29: Solid Performance But Uncertainties Arise

China Sunsine Chemical - Solid Performance But Uncertainties Arise

  • China Sunsine (SGX:QES)'s 1Q22 net profit came in strong at RMB157m (+11% q-o-q, +26% y-o-y), above expectations on the back of better-than-expected profit spreads.
  • With its production base and key domestic customers mainly based in Shandong Province, China Sunsine’s operations are not directly impacted by the multiple outbreaks of COVID-19 cases in China currently. That being said, with China’s economy facing increasing pressure relating to shrinking demand and supply disruptions, China Sunsine’s volume weakness could persist in the coming quarters.
  • While China Sunsine’s profit spread should remain healthy in the near-term, we think China’s COVID-19 woes may pose downside risk to its sales volumes.
  • Reiterate ADD call on China Sunsine given undemanding valuations at 1.5x FY23F P/E (ex-cash), but we lower target price to S$0.67 due to the near-term challenging outlook.
  • Despite the near-term challenging outlook, we continue to like China Sunsine for its consistent profitability and positive free cash flow generation track record.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

ONG Khang Chuen CFA CGS-CIMB Research | 2022-04-29
SGX Stock Analyst Report ADD MAINTAIN ADD 0.67 DOWN 0.780

Read also CGS-CIMB's most recent report:
2022-08-15 China Sunsine Chemical - A Record Half Despite A Challenging Backdrop

Relevant links:
China Sunsine Analyst Report,
China Sunsine Target Price,

China Sunsine Share Price History,
China Sunsine Announcements,
China Sunsine Dividends/ Corp Actions,
China Sunsine News Articles


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