strong buy on china sunsine chemical holdings singapore css
DESCRIPTION
Strong Buy on China Sunsine Chemical Holdings Singapore CSSTRANSCRIPT
China Sunsine Chemical Holdings Ltd
SGX: CSS
Symbol CSS
Exchange SGX
Current Price 0.26
52 Week High/ Low 0.021/0.029
Shares Outstanding 477.36 M
Market Cap (in $ mn) 126.5
P/E Ratio 5.42
Recommendation:
Price target $1.30c
Strong Profit Growth and a very Low P/E make
China Sunshine chemical an outstanding buy.
Key Developments:
• 3QFY2010 net profit rises 35% to RMB33.8m on 32% increase in revenue
to RMB267.1 m
• 9MFY2010 net profit at RMB92.5m has exceeded the full year FY2009 net profit
of RMB88.3m
• Strong demand pushes 3Q volume 24% higher to 14,585 tons, consecutive record
quarter volume
• Expects demand for its products to
remain strong because of the robust PRC
and Asia Automobile Market
About the Company
China Sunsine Chemical Holdings Ltd (China Sunsine) is an investment holding company. It is
engaged in the production of rubber accelerators in the People’s Republic of China and globally. The
Company’s products are sold under the Sunsine brand. It includes a range of rubber chemicals, such as
accelerators, anti-oxidant TMQ, vulcanising agent insoluble sulphur, as well as anti-scorching agent CTP.
The Company’s production facilities are located in Shanxian, near Heze City in Shandong Province. The
wholly owned subsidiary of the Company is Shandong Shanxian Chemical Co., Ltd, which is engaged in
the manufacture and sale of rubber chemicals, comprising rubber accelerators, anti-oxidant agents, anti-
scorching agents and insoluble sulphur.
Company’s Website: http://www.chinasunsine.com/
Business Overview
Quarter 3/2010
Full Year 2009
Daily Chart
Outlook
Expansion Plans Update
During 9MFY2010, the Group has completed the following expansions:
• structural construction of the R&D centre and office facilities at Facility 2 in June.
• capacity expansion of insoluble sulphur to 10000 tons pa in September along with the commencement trial production.
• construction of 15000-ton 6PPD plant at Facility 2 in September with trial production commencing in 3Q2011 after completion of its intermediary material (4-Aminodiphenylamine)
production plant construction.
The Group will continue with the following projects:
• Complete the interior works of the R&D centre and office facilities at Facility 2 by end FY2010.
• Complete Phase 1 of Facility 3 at Weifang plant (15,000-ton MBT) by 1QFY2011.
• Complete the shifting of all production facilities from Facility 1 to Facility 2 by 1H2011. As a
Consequence, we shall recognise impairment of plant and equipment progressively. Due to
Facility 1’s proximity to commercial development within Shanxian city, the local government
Intends to rezone this site for commercial and residential use. The Group is negotiating with the
Local government
Financial Statement
VALUATION RATIOS
Company Industry Sector S&P 500
P/E Ratio (TTM) 5.42 11.42 27.52 17.84
P/E High - Last 5 Yrs. -- 0.23 0.56 18.98
P/E Low - Last 5 Yrs. -- 0.08 0.06 4.83
Beta 0.79 1.12 1.39 1.27
Price to Sales (TTM) 0.70 0.59 2.21 2.09
Price to Book (MRQ) 0.97 1.08 2.91 2.84
Price to Tangible Book (MRQ) 0.99 1.28 3.33 19.10
Price to Cash Flow (TTM) 4.60 5.22 27.68 10.46
Price to Free Cash Flow (TTM) -- 9.39 6.92 47.74
% Owned Institutions -- -- -- --
DIVIDENDS
Company Industry Sector S&P 500
Dividend Yield 7.55 2.05 1.07 1.68
Dividend Yield - 5 Year Avg. -- 1.53 1.70 2.46
Dividend 5 Year Growth Rate -- 6.11 11.82 -6.46
Payout Ratio(TTM) 19.33 26.82 10.07 39.62
GROWTH RATES
Company Industry Sector S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago 32.42 25.33 54.79 9.36
Sales (TTM) vs TTM 1 Yr. Ago 41.87 18.33 10.58 8.94
Sales - 5 Yr. Growth Rate 24.69 2.10 13.97 9.86
EPS (MRQ) vs Qtr. 1 Yr. Ago 35.34 187.24 78.52 5.76
EPS (TTM) vs TTM 1 Yr. Ago 73.00 -- -- --
EPS - 5 Yr. Growth Rate 29.79 -3.04 13.71 6.98
Capital Spending - 5 Yr. Growth Rate 35.61 -3.33 21.02 4.90
FINANCIAL STRENGTH
Company Industry Sector S&P 500
Quick Ratio (MRQ) 2.58 1.61 1.69 0.67
Current Ratio (MRQ) 2.93 2.09 2.12 0.99
LT Debt to Equity (MRQ) 0.00 42.40 23.22 118.67
Total Debt to Equity (MRQ) 13.46 57.17 40.32 173.06
Interest Coverage (TTM) -- 0.19 0.07 19.01
PROFITABILITY RATIOS
Company Industry Sector S&P 500
Gross Margin (TTM) 23.63 22.33 20.21 32.87
Gross Margin - 5 Yr. Avg. 24.30 23.38 25.63 29.18
EBITD Margin (TTM) 17.82 -- -- --
EBITD - 5 Yr. Avg 16.96 11.82 19.60 18.55
Operating Margin (TTM) 15.16 7.57 7.66 --
Operating Margin - 5 Yr. Avg. 14.88 6.78 13.80 16.25
Pre-Tax Margin (TTM) 15.16 7.38 7.65 15.01
Pre-Tax Margin - 5 Yr. Avg. 14.41 6.63 13.57 15.86
Net Profit Margin (TTM) 12.94 5.31 4.76 11.14
Net Profit Margin - 5 Yr. Avg. 12.57 4.22 9.54 11.64
Effective Tax Rate (TTM) 14.64 25.83 16.16 50.15
Effecitve Tax Rate - 5 Yr. Avg. 12.76 44.54 28.16 25.24
EFFICIENCY
Company Industry Sector S&P 500
Revenue/Employee (TTM) -- 28,644,531 49,242,125 676,313
Net Income/Employee (TTM) -- 1,471,714 -49,517,005 84,785
Receivable Turnover (TTM) 4.83 4.38 9.82 10.51
Inventory Turnover (TTM) 12.31 5.64 2.40 6.76
Asset Turnover (TTM) 1.14 0.82 0.34 0.55
MANAGEMENT EFFECTIVENESS
Company Industry Sector S&P 500
Return on Assets (TTM) 14.73 5.64 4.28 6.01
Return on Assets - 5 Yr. Avg. 17.44 3.83 9.90 5.77
Return on Investment (TTM) 19.24 7.75 5.31 7.71
Return on Investment - 5 Yr. Avg. 25.03 5.40 14.30 7.46
Return on Equity (TTM) 19.24 13.88 7.06 18.04
Return on Equity - 5 Yr. Avg. 25.10 6.96 19.07 9.25
CONTACT:
Mr. Woraphop Viriyaroj
Corporate Account Executive
Heffernan Capital Management
Email : [email protected]
Mr Woraphop Viriyaroj passed Level 1 of the Chartered Financial Analyst (CFA) in the year
2010 and Certified Investment and Securities Analyst (CISA) Level 2 in 2010 and holds a degree
in Industrial Engineering.
Price Estimate by Shayne Heffernan PhD
Shayne Heffernan of Ebeling Heffernan holds a PhD in Economics serves as CEO of Heffernan
Holdings Inc and Co Founder of Ebeling Heffernan www.ebeling-heffernan.com
Bangkok
Suite 53 Athenee Tower 63 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 THAILAND
Tel: +66 2 126 8000 Fax: +66 2 126 8080
New York
347 5th Avenue, Suite 1402-508 Ny, NY 10016
Tel: +1 646-403-9881 Fax: +1 646-403-8014
Singapore
3 Raffles Place #07-01 Bharat Building Singapore 048617
Tel: +65 6329 6408Fax: +65 6329 9699
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