Chinese automotive compounder Shanghai Pret Composite Co. Ltd. posted stagnant net profit for fiscal year 2014, but first quarter results received a strong boost from the acquisition of U.S. recycler WPR Holdings LLC, as well as higher margins.
The company reported 2014 sales of 2 billion yuan ($321.6 million), up 18.5 percent from 2013. Sales volume by weight grew slightly faster, by 20.3 percent to about 142,900 metric tons.
In the first quarter, sales jumped 37 percent to 636 million yuan ($102.3 million) and net profit shot up 74 percent to 86 million yuan ($13.8 million).
The company also forecast that its first half net profit will increase in the range of 80 to 100 percent.
The public company did not elaborate on the details of the first quarter financials, but analysts at Haitong Securities estimated that the company benefited from price drops for polypropylene and ABS resins and therefore saw its gross margin increase by 6.4 percentage points.
The Haitong analysts also estimated WPR contributed about 130 million yuan in sales and 7 million yuan in net profit to Pret's first quarter figures, since it was integrated into Pret's financials on Feb. 12. After deducting WPR numbers, Pret's own sales rose an estimated 12 percent in the first quarter.
Pret highlighted the growth of its new thermotropic liquid crystal polymer (TLCP) composite business. The U.S. Patent and Trademark office gave the company a patent for its TLCP product in 2014, Pret's first patent outside of China. The business grew about 20 percent in the past year, albeit from a small base, to 6.2 million yuan ($997,000), Pret said in an April 27 investors' meeting.
For its core automotive business, Pret said its long glass fiber reinforced PP composite is making successful entry into multiple existing and upcoming BMW models for a variety of components including instrument panels.
The same material was also added to Land Rover's global procurement catalog in November, Pret said, claiming to be the first ever Chinese material supplier in Land Rover's global procurement catalog.
On the production side, Pret's new facility in West China's Chongqing city reached 30,000 metric tons of capacity at the end of 2014. The company now has a total capacity of 180,000 tonnes.