 2006-05-08 |
|
|
(CMoney News, Reporter Xiang-Lin Lee / Taipei · May 8, 2006, Monday 19:00)
YC (4306) has seen substantial revenue growth in recent years, maintaining a stable profit level. During today’s (8th) investor briefing, Chairman Li Chih-Hsien announced that YC's Ningbo Asia Plastics plant in China has turned profitable since March. BOPP film demand is expected to outstrip supply starting in the second half of this year, and a real estate development project has already achieved a 90% sales rate, with revenue recognition set to begin in Q2. This positions YC to be optimistic about its business outlook for the next 3-5 years.
Founded as a tape manufacturer, YC has expanded into film production with facilities in Taiwan, China, and Vietnam. For tapes, the Ningbo Asia Plastics plant will add new production lines in the second half of the year, and capacity is projected to surpass Taiwan’s within three years. In Vietnam, the Wang Li plant remains profitable and added a new production line earlier this year.
In the film sector, YC’s Ningbo Asia Plastics BOPP film plant bottomed out of losses last year and is now fully operational, achieving profits since March. In Taiwan, a new BOPP production line is planned for YC’s Changbin Plant 3 by 2007.
Chairman Li noted that the BOPP film industry’s peak was in 2002, but oversupply issues from 2003 to 2005 led to losses at Ningbo Asia Plastics. However, market surveys predict a supply-demand reversal in the second half of this year, with demand exceeding supply. Li emphasized that film production will be YC’s main growth driver.
Another area of interest for investors is YC’s real estate development profit. YC’s “Artistic Taipei” project on Chang’an East Road has reached 60% completion and 90% of units sold. Li indicated that handovers are expected by March next year, generating 180-200 million NT dollars in profit, with 60% of revenue recognized in Q2 based on completion percentage.
YC was listed on the over-the-counter market in 2001, with revenue below 1.5 billion NT dollars. Last year (2005), revenue grew to 4.4 billion NT dollars, and it is estimated that 5 billion NT dollars is within reach this year. The BOPP supply-demand dynamic has reached a 'golden cross,' with demand expected to exceed supply for at least two more years. Coupled with valuable assets, YC's stock price has significant potential. |
|
