Sunvic: blow out 4Q10/ FY10 results that beat Street expectations. FY10 EPS came in at S 23.3cts, vs consensus’ S 17.3cts, as strong growth momentum continued in 4Q10.
4Q10 revenue at Rmb 910m, +67% yoy, driven by strong demand for AA & AE which resulted in higher ASP (AA ASP +82% to Rmb 15100/mt) and sales volume (full yr sales vol of AA & AE +31% to 228.5k mt). Sequentially however, revenue dipped by 7%, but utilization for AA remained high...
Accordingly, 4Q10 gross margins expanded to 41% from 7% yoy, 30% qoq.
4Q net profit surged to a record Rmb 301m, vs Rmb 18m loss yoy, +55% qoq, boosted in part by tax benefits arising from capital allowances.
Proposed final & special div of 1ct each, vs no div last yr. This translates to a yield of 2.7% based on last close at $0.745...
Going forward, mgt is optimistic about outlook of the AA & AE industry in the PRC, expects CAGR of 15-20% demand growth. The 1m tpa cracking plant to produce raw material propylene and petroleum related pdts will commence pdtn in 2Q11, while the 2 new 160k tpa AA plants are expected to come onstream in 2 separate phases at end 2Q11 and 1H12 r’ptively...
Stellar earnings narrow valuations to just 3.2x P/E, and may lead Street to re-ratings the stock.
Pre-results, Street has Buy ratings with TP ranging btwn $1.02- 1.07.
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