China's Kingfa fighting domestic slowdown

By Nina Ying Sun
Assistant Managing Editor

Published: September 10, 2012 6:00 am ET

Related to this story

Topics Materials, Suppliers

GUANGZHOU, CHINA (Sept. 10, 5 p.m. ET) — Guangzhou-based Kingfa Science & Technology Co. Ltd., ranked as China’s largest plastic compounder, reported mixed results for the first half of the fiscal year. The company cited a notable slowdown among its major end markets, including automotive, appliances and electronics, though automotive materials sales managed to grow at a double-digit pace.

In the half-year report, the company said operating income grew 2.4 percent year-on-year to 6 billion yuan. Net profit dipped 30 percent to 398 million yuan, mainly because the company received 215 million yuan in revenue through the sale of its shares in a real estate company in the first half of 2011. With that factor excluded, net profit grew 7.4 percent year-on-year. Consolidated gross profit margin came in at 17.3 percent, about the same level as last year.

The company sold a total of 442,200 metric tons of products during the first half, including its trading business, registering 11.3 percent year-on-year growth. Excluding the trading business, it sold 321,300 tons of plastic compound materials, about 4 percent higher than the same period last year.

Thanks to aggressive technological and marketing pushes, sales of automotive materials rose 12 percent, while car sales in China only increased by 3 percent during the same period, the company said.

Sales picked up in the second quarter, growing 20.5 percent compared to the first quarter. Net profit in the second quarter soar by 63.8 percent compared to the first three months of the year.

Kingfa said it’s on track with its eight ongoing expansion projects. Two of them, the 200,000-ton automotive material project in Guangzhou and the 150,000-ton recycled plastics project, have started generating revenue. The company plans to improve its product and capacity structure during the second half and stay ahead of the market.

It aims to reach 1.2 million tons of compounding capacity by 2015.

Geographically, operating income rose 11.4 percent in overseas market, while domestic growth was 1.6 percent during the first half.

Kingfa’s new materials business, including biodegradable resin, carbon fiber material, wood-plastic composites, and specialized engineering resins are making slow progress. Biodegradable materials are not expected to cast a positive impact on 2012 performance, the company noted, due to the shutdown of its facility in Zhuhai for maintenance.


Comments

China's Kingfa fighting domestic slowdown

By Nina Ying Sun
Assistant Managing Editor

Published: September 10, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International...    More

Image

Updating a travel icon for the professional millennial

August 29, 2014 11:44 am ET

As part of a drive to expand its customer base to include more millennials, Airstream Inc. turned to the Columbus College of Art & Design's...    More

Image

American Starlinger-Sahm begins work on new US headquarters

August 29, 2014 10:18 am ET

American Starlinger-Sahm Inc., which sells equipment for woven plastic bag production, PET recycling equipment, sheet extrusion and laminating lines...    More

Image

Chinese compounders seek market shares, often at the expense of margins

August 29, 2014 10:02 am ET

China's largest compounder, Kingfa Sci. & Tech. Co. Ltd., as well as its more automotive-focused counterparts Shanghai Pret Composites Co. Ltd. and Ch...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events