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
Companies & Associations

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

US engineering plastics demand

April 20, 2015 2:29 pm ET

   More

Image

Ford moving forward in carbon fiber for 'high volume' use

April 17, 2015 10:21 am ET

Ford Motor Co. has signed a deal with a carbon-fiber manufacturer to jointly explore “high-volume” automotive uses for the lightweight...    More

Image

Force majeure declared at six European sites since mid-March

April 17, 2015 1:10 pm ET

At least six European resin makers have declared force majeure on polyethylene, polypropylene and related products since mid-March, leading to higher ...    More

Image

Executives step down from Star Thermoplastics

April 17, 2015 12:56 pm ET

Executives Randall Fortin and Larry Johnson no longer are with materials firm Star Thermoplastics Alloys & Rubbers Inc.    More

Image

Zoltek expanding CF capacity in Europe

April 17, 2015 10:12 am ET

Leading carbon fiber group Zoltek Corp. has signed a strategic agreement with the Hungarian government to expand its operation in northern Hungary, al...    More

Market Reports

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

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

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

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events