- China Sunsine recorded 2H22 net profit of RMB214.9m (-10.9% y-o-y), taking 2022 core profit to RMB606.3m (+11.8% y-o-y), largely in line with our forecast. The lower 2H22 revenue was driven by a decline in sales volume and ASPs.
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- Maintain BUY rating on China Sunsine with a 28% higher target price of S$0.575.
China Sunsine's 2H22 results in line with expectations.
- China Sunsine Chemical (SGX:QES)’s 2H22 net profit fell by 11% y-o-y to RMB214.9m, bringing 2022 core profit to 95% of our full-year estimates.
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- For 2022, overall ASP increased by 8% y-o-y to RMB20,237/tonne, as China Sunsine was able to pass on the increase in raw material prices to customers. This drove the 2.7% y-o-y rise in 2022 revenue, offset by the 5% lower sales volume. 2022 core profit of RMB606.3m (+11.8% y-o-y) excludes an RMB36.1m tax refund received in 1H22 for the overpayment of 2021 tax expenses.
Higher margins recorded; special dividend proposed.
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