Sunvic: blowout 3Q10 results. Net profit surged to Rmb 193m, +88 qoq, reversing last yr’s Rmb 6m loss. Revenue +124% to Rmb 981m due to higher ASP, sales volumes. ASP for acrylic acid (AA) was Rmb 13,273/ton (+75% yoy), while combined sales volume for AA and acrylate esters (AE) was 40.3k tons (+61%yoy)…
Rapid recovery and growth in downstream sectors, including Super Absorbent Polymers, water treatment chemicals, coatings, adhesives and related industries, have led to strong demand for AA both in the PRC and overseas. There were also supply shortages this yr…
Mgt remains upbeat, expects stable outlook for AA, AE pdts; sees long term sustainable growth. Rapid expansion plans as per previous guidance, i) a new 1m ton pa propylene cracking plant to commence operations in 1Q11 to satisfy its raw mat’l needs, ii) a new AA plant in Jiangsu to add 320k tons pa of capacity (from 205k tons currently) progressively from end 2011. Aims to raise equity to partially finance the expected capex of Rmb 900m…
At 9M10, Sunvic’s net profit Rmb348m has exceeded its full year target of Rmb 300m. Stock trades at just 4.1x annualized 9M10 earnings. Phillip has a Buy rating with $0.95 target.
Yday stock made a new 3-yr high at $0.695 in intraday trading. A break above $0.70 resistance could see prices move toward $0.80 levels next.
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