China Sunsine Chemicals Holdings

[tiongkokgor]

I have a similar figure on accelerator to rubber (weight). Mine is 1.7%, vs yours 1.5%. Anyway, a good point.

The important debate, is the level of competition (i.e. supply), which I have elaborated in previous post, IMO

CityFarmer,

1) Can you share how you arrive at the 1.7%?

2) What is the cost of accelerator as a % of the tire cost?

[CityFarmer]

I have a similar figure on accelerator to rubber (weight). Mine is 1.7%, vs yours 1.5%. Anyway, a good point.

The important debate, is the level of competition (i.e. supply), which I have elaborated in previous post, IMO

CityFarmer,

1) Can you share how you arrive at the 1.7%?

2) What is the cost of accelerator as a % of the tire cost?

I didn't work out the ratio in term of cost, only the weight ratio.

P/S: A good reference for rubber consumption, is the site below
http://www.rubberstudy.com/

[portuser]

The environmental impact report by the research institute for Sunsine's new 30,000-tonne TBBS factory can be found by typing:
山东尚舜化工有限公司3万吨年橡胶促进剂TBBS项目环境影响报告书

Nearly one-third of the capex is for waste treatment facilities (RMB 27m [page 2-43] out of RMB 86.82m [page 15-3]). 

By the way, page 2-6 gives 470,000 tonnes as annual world-wide consumption of rubber accelerators.

In my earlier post, I derived a global accelerator consumption of 412,300 tonnes by inverting Sunsine's sales volume of 70,090 tonnes.

Sunsine's sales volume should be 76,090 tonnes (not 70,090), which gives rise to 447,100 tonnes as global sales volume.

[CityFarmer]

It seems no reliable data for accelerator consumption available FOC online. I got it randomly in regular research online. The historical figures are listed below. I rounded them, since accuracy was not the objective, but the trend. The consumption seemed pretty stable, and consistent with rubber consumption. I assume 2015 accelerator consumption, should be about the same as 2014 (consistent with portuser's latest post)

2014: 450,000 tonnes
2013: 470,000 tonnes
2012: 450,000 tonnes

(sharing few data, hopefully useful for VB's analysis)

[tiongkokgor]

Sunsine’s 3QFY2016 quarterly profit of RMB 72.8 mil is the 2nd highest since IPO and with record sales volume.

Highest quarterly report is 3QFY2014’s RMB 83 mil. The comparatives are as follow:
 
                                                 3QFY2016         3QFY2014           

Quarterly profit (RMB)                  72.8 mil            83.0 mil
Average selling price (RMB)          14.8K                20.1K
Sale volume (tons)                       36.8K               28.9K

Selling prices have also increased over the last quarter's prices.

[Bluechipfan]

I am glad that Mr Xu highlighted that the strategy is working. Gaining market share with lower margin. Even then, Sunsine managed to increase ASP slightly over 2Q. New plant with 10,000 capacity should be ready soon. I also noted the decrease in bank loan which now stand at RMB 83m, a drastic drop from well over 400m just 2 years or so ago. Also, it seems the new expansion can be funded without additional bank loan. Key note: Sunsine has not made a single cash call since IPO and has been paying consistent dividends since IPO.

[tiongkokgor]

Sunsine's latest analyst report attached herein. Target price SGD 73 cents.

[Bluechipfan]

Thanks for sharing the analyst's report. 2 main positives. Firstly, the bank loan is likely to be fully paid by year end, which is my observation too. Secondly, with consistent FCF and low (no) debt, there should be an increase in the dividend. The company already demonstrated their willingness to increase dividend when they can afford, the dividend was increased by 50% since 2014. I will continue to stay vested.

[tiongkokgor]

Sunsine annouced share repurchases today.

29 Nov 273,400 shares, 45.329c
1 June 200,000 shares, 39.925c 
31 May 30,000 shares, 38.5c
30 May 260,000 shares, 37.728c 

Sunsine is raising purchase price, reflecting confidence in itself. 

Aniline price going up according to this website:
http://www.sunsirs.com/uk/prodetail-258.html

Likely prices and margins of Sunsine products going up too.

[Bluechipfan]

Buyback continue yesterday with 13,200 shares bought at 48.5 cents each. Total for he past 4 days stood at 513200 shares. This mean company still deem the share price is undervalued at 48.5 cents. This could lay the floor for the share price at 48.5 cents if there is no further buyback. Based on the past conduct of the company ie. they didn't buy back any shares when price surged in 2014 - probably due to then high capex and loan consideration - but they do it now with lower capex and diminishing loan, I am confidence that the management know what they are doing. I hope the company formalise a dividend payout policy soon. A 30-35% payout from the eps will be nice. This year eps should be 8 cents or more.