Sunvic

Sunvic: 4Q13 net profit spiked 81% y/y to Rmb135.4m, while revenue accelerated 33% to Rmb1.8b. This brought FY13 earnings to Rmb369.9m (+282%) and revenue to Rmb6.3b (+46%). Increased topline was attributed to higher ASP and volume of acrylic acid & acrylate esters (AA&AE). Gross margin rose to 14.8% (+2.5ppts). Management expects the sales of main products such as AA & AE to remain robust on strong selling prices. The AA plant, have been and is expected to continue operating at near max utilization rate on the back of long term contracts with major customers. The proposed JV and divestment with Arkema SA on the new Taixing plants are also expected to contribute positively to the financial position in the coming year, as gearing lowers and cash position receives a boost. Sunvic trades at trailing P/E of 5.6x