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Insight | Time:Sep 8 2016 2:00PM
How about the profit of dyestuff enterprises in H1, 2016?
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China printing and dyeing and dyestuff enterprises announces the semi-annual reports successively recently. In the first half year of 2016, with the stricter environmental protection policy and on-going supply-side reform, dyestuff prices have been increasing continuously, especially the disperse dyestuff, the increment exceeded 100% in general. Following will analyze the sales and net profits of major dyestuff enterprises.

1. Business income
Business income of dyestuff enterprises (unit: 10,000 yuan)
Ranking Companies 2015-3-31 2015-6-30 2015-9-30 2015-12-31 2016-3-31 2016-6-30 Yearly growth
1 Lonsen 384,989 758,865 1,177,675 1,484,211 298,063 628,132 -17.23%
2 Transfar 94,982 225,315 331,535 534,034 97,997 238,115 5.68%
3 Runtu 132,754 243,586 340,357 452,183 90,998 209,493 -14.00%
4 Hisoar 62,041 127,613 187,629 246,450 64,170 128,625 0.79%
5 Yabang 70,465 138,770 184,485 229,031 61,670 125,453 -9.60%
6 Dymatic 38,727 96,745 152,179 237,055 42,342 102,829 6.29%
7 Anoky 23,198 42,990 55,925 68,995 29,485 46,375 7.87%

Note: The yearly growth data is calculated by the H1 2016/H1 2015.

In H1, 2016, 4 enterprises saw the y-o-y increase of business income, while 3 enterprises witnessed negative growth, indicating that the sales were moderate during the period. With the larger pressure of environmental protection, small enterprises or those did not reach the standard were shut down gradually and in the meantime, the leading enterprises seized the market shares quickly by virtue of price edge. After the sharp fall o in the second half year of 2015, dyestuff prices soared after the 2016 Spring Festival and leading enterprises have more say on the price.

Zhejiang Lonsen is a leading enterprises in China, with the sales revenue of 6281.32 million yuan in H1, of which 3.727 billion yuan of income from dyestuff sector, 0.475 billion yuan from dyestuff auxiliary sector and 0.907 billion yuan from dye intermediate sector and the gross profit rate of the three sectors scored at 38.61%, 35.59% and 43.16% respectively.

At present, Lonsen has been the world largest textile chemicals producers, with more than 300kt/yr of dyestuff capacity, 100kt/yr of dyestuff auxiliary capacity and 100kt of dye intermediate capacity.

2. Net profits
Net profit of dyestuff enterprises (unit: 10,000 yuan)
Ranking Companies 2015-3-31 2015-6-30 2015-9-30 2015-12-31 2016-3-31 2016-6-30 Yearly growth
1 Lonsen 116,572 187,091 232,009 254,133 30,367 96,370 -48.63%
2 Transfar 3,577 10,485 30,701 55,063 7,267 44,195 321.51%
3 Yabang 21,047 43,898 53,893 66,595 15,174 33,375 -23.97%
4 Hisoar 16,084 33,190 45,062 51,659 13,294 30,396 -8.42%
5 Runtu 33,487 59,997 67,968 73,378 5,805 26,402 -55.99%
6 Dymatic 1,266 25,170 30,615 30,587 -591 9,953 -60.46%
7 Anoky 3,811 7,703 7,979 6,196 2,723 5,573 -27.65%

Note: The yearly growth data is calculated by the H1 2016/H1 2015.

In H1, only one enterprises saw the net profit increase y-o-y and six enterprises saw decrease y-o-y, indicating that the unfavorable profits. It is known that there are two influencing factors on dyestuff profits, one is the raw material prices, the other is the selling price of dyestuff.

Influenced by macro economy, environmental protection policy and increasing supply, dyestuff prices continued to move lower since the second half year of 2015. Till early Mar in 2016, dyestuff prices bounced. But as the average prices were still lower than corresponding period of last year, the net profits still witnessed large fall.

Net profits of Zhejiang Lonsen approached 963.70 million yuan in the first half year of 2016, while that of Anoky were less, to reach 55.73 million yuan. From 2013 to 2015, the output of dyestuff of Anoky scored at 13.2kt, 17.5kt and 20.3kt respectively. With the start-up of 2.5kt/yr disperse dyestuff project in Shandong and the active dyestuff project in Jiangsu, Anoky’s capacity improves further and the output is expected to increase later.

3. Outlook
In 2016, many dyeing, dyestuff and dye intermediate enterprises curtail production or stop operation due to the G20 Summit and the ecological management of Yangtze River, resulting into larger risks of feedstock supply and production demand. Moreover, in recent years, Chinese government exerts more effects on the environmental pollution improvement and more pressure will be put on related enterprises. Nevertheless, the environmental protection pressure speeds up the industry shuffle, pushing up the development of leading enterprises. It is predicted that the performance of dyestuff enterprises will improve obviously in the second half year of 2016.
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