China Sunsine Chemical Holdings (QES) H1 2023 earnings summary

Executive summary

• 1H2023 revenue fell 15% YoY to RMB 1,729.1m and net profit fell 54% to RMB 194.6m, despite sales volume growth of 10%.

• Sales volume rose 10% to 99,748 tonnes; average selling price fell 22% to RMB 17,093 per tonne amid lower raw-material prices and intensified competition.

Financial highlights

• Gross profit declined 41% to RMB 412.0m; gross margin fell 10.5 percentage points to 23.8%.

• Profit before tax fell 50% to RMB 236.1m; EPS declined 54% to RMB 20.171 cents from RMB 44.06 cents.

• Operating cash flow was RMB 235.9m; cash and bank balances were RMB 1,475.2m at 30 June 2023.

Outlook and guidance

• Management expects profitability over the next 12 months, citing financial stability, market position, product quality, scale, product range and environmental compliance.

• Priorities include sales-volume growth, production-sales equilibrium, flexible pricing, strengthening market position and tighter cost control.