Nanjing, Jiangsu – System house Hongbaoli posted its annual results in April, with a 10% gain in net profit to CNY 103m ($16m) on a 14% fall in revenue to CNY 1.8bn, similar to its earlier estimates as UTECH-polyurethane.com reported at the time.
An improved profit-centre system and the promotion of lean management drove up the company’s profitability, said its annual report.
The company is forecasting a rise in net profit up to 20% for the first half of 2016, although over the first three months of 2016 it saw a 12% drop in revenue to CNY 414m. Net profit jumped 12% to CNY 31m.
Overseas sales accounted for 30% of Hongbaoli’s total revenue in 2015 and had a 22.5% gross margin, 3% higher than the company’s domestic businesses.
China’s largest rigid foam systems maker with 150kT/year capacity and over 100kT sales volume last year, Hongbaoli saw the unit’s annual revenue decline by 12% from 2014 to CNY 1.3bn. Gross margin ratio for the unit rose by 2.5% to 19%. The company has been building a 30kT/year specialty polyether polyol is expected to start operation in mid 2016.
Another project, doubling its high flame retardant PU insulation panel capacity to 15m m2 year is planning a trial run in 2016. The business unit upped its sales by 9% in 2015 to CNY 34m, although at a lower price, consequently, there was an over-30% rise in sales volume compared with 2014. The company plans to double the unit’s sales volume in 2016.
Hongbaoli’s 120kT/year propylene oxide plant with CNY 950m planned investment – its CNY 375m private placement to fund the project received regulatory approval in January – is scheduled to finish construction in 2017.
XE Currency Conversion: 16 May, 2016