Tuesday, February 5, 2013

China Essence

China Essence: Group’s revenue dipped 58% y/y to Rmb246m for 3Q13. 9M13 revenues decreased 55% y/y to Rmb385m. The decrease in revenue was mainly due to the fall in sales volumes and ASP of potato starch, potato starch-based products and animal feed. The Company reported an increase of 69% y/y overall loss of Rmb209m for 3Q13, and 107% y/y overall loss of Rmb281m for 9M13. Mainly due to the low utilisation rates, resulting allocation of higher fixed overheads and challenging market condition. In addition, the severe weather in the Northeast of China has affected the Group’s potato stock. The Group expects market and operating environment to remain challenging for the rest of FY2013. Nevertheless, the management will be vigilant in monitoring the weather condition and market situation closely. Group trades at 0.06x P/B.

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