China Sunsine

China Sunsine: ($0.33) Beneficiary of continued anti-pollution drive in China Bloomberg News reports that Beijing's Environmental Protection Bureau has issued fines totalling more than US$2m to 615 companies, including chemical producers, since its local air pollution prevention and control action plan went into effect on 1 Mar. This corroborates with earlier Chinese media reports, that other provincial governments in Tianjin and Hebei, have been executing on their environmental protection plans. These moves are reflective of the central government’s commitment to a broader national anti-pollution drive that was implemented a year ago, and reinforces the bull case for China Sunsine, which reported a stellar set of 2Q14 results last month. Recall, the group’s net profit tripled y/y to a record Rmb60.2m, driven by a jump in ASP and sales volume, as it capitalized on the short supply of accelerator products in the market after a number of its peers were forced to suspend production for failing to meet the relevant environmental standards. Backed by the ISO14001 standard for environment, and GB/T28001-2001 standard for occupational health and safety management system, Sunsine is well positioned to continue to gain market share as the lower quality players scramble to catch up. Sunsine has gained 8.1% since its recommendation into Market Insight’s Growth model portfolio, and we continue to reiterate our preference for the stock.