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

Bayer expands with acquisition of Germany's Thermoplast Composite

March 3, 2015 10:59 am ET

Bayer AG's Bayer MaterialScience LLC has bought composite materials specialist Thermoplast Composite GmbH based near Nuremberg, Germany.    More

Image

Bayer MaterialScience spinoff on schedule

March 3, 2015 10:14 am ET

The head of Bayer AG said the group still must decide the details to spin off its Bayer MaterialScience plastics group this year.    More

Image

Lower oil prices will continue to impact PE, PP resin pricing

March 2, 2015 2:05 pm ET

Lower oil prices will continue to affect North American markets for polyethylene and polypropylene resin in the months ahead.    More

Image

BASF keeps innovating to drive customers

March 2, 2015 11:39 am ET

Materials giant BASF Performance Materials is keeping innovation alive with new products and processes.    More

Image

BASF earnings up despite 'disappointing economic development' for Europe

March 2, 2015 10:50 am ET

Chemicals giant BASF SE said Feb. 27 it had hit its goal for 2014, increasing earnings, “despite the disappointing economic development in Europ...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events