BEIJING, June 25, 2021 /PRNewswire/ — Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) (“Fuwei Films” or the “Company”), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the first quarter of 2021 ended March 31, 2021.
First quarter highlights
- Net sales were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%.
- Sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020.
- Gross profit was RMB42.5 million (US$6.5 million), representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020.
- Net profit attributable to the Company was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million a year ago.
Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, “Despite the oversupply in the marketplace and the ongoing coronavirus pandemic, we achieved positive trends in overall sales, especially sales of specialty films, including base film for dry film, which accounted for 63.9% of our total revenues. Base film is a high value-added and differentiated product, which is used to produce dry film that is used in printed circuit boards. The sales increase of base film for dry film demonstrates that the quality of our products is well recognized by our customers. We believe that the order growth also helps improve the Company’s financial performance. For the future, we remain committed to innovation and differentiated marketing strategy and expanding the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions.”
First Quarter 2021 Results
Net sales during the first quarter ended March 31, 2021 were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%, mainly due to increased sales volume. The increase of sales volume led to an increase of RMB12.2 million, and the increase of sales price resulted in the increase of RMB6.2 million.
In the first quarter of 2021, sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020. The increase was mainly due to increased sales volume.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
|
Three-Month Period |
% of |
Three-Month Period |
% of |
||
|
RMB |
US$ |
RMB |
|||
|
Stamping and transfer film |
25,350 |
3,869 |
25.0% |
34,522 |
41.5% |
|
Printing film |
5,482 |
837 |
5.4% |
5,845 |
7.0% |
|
Metallization film |
1,643 |
251 |
1.6% |
1,501 |
1.8% |
|
Specialty film |
64,963 |
9,915 |
63.9% |
39,877 |
47.9% |
|
Base film for other |
4,186 |
639 |
4.1% |
1,488 |
1.8% |
|
101,624 |
15,511 |
100.0% |
83,233 |
100.0% |
|
Overseas sales were RMB9.0 million or US$1.4 million, or 8.9% of total revenues, compared with RMB5.8 million or 6.9% of total revenues in the first quarter of 2020, representing an increase of RMB3.2 million or 55.2%. The increase was mainly due to increased sales volume.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):
|
Three-Month Period |
% of |
Three-Month Period |
% of |
|||
|
RMB |
US$ |
RMB |
||||
|
Sales in China |
92,596 |
14,133 |
91.1% |
77,448 |
93.1% |
|
|
Sales in other countries |
9,028 |
1,378 |
8.9% |
5,785 |
6.9% |
|
|
101,624 |
15,511 |
100.0% |
83,233 |
100.0% |
||
Gross profit was RMB42.5 million (US$6.5 million) for the first quarter ended March 31, 2021, representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020. Average product sales prices increased by 6.5% while average cost of goods sold decreased by 3.5% compared to the same period in 2020. Consequently, the increase in average product sales prices and the decrease in the average cost of goods sold during the first quarter ended March 31, 2021 contributed to the increase in gross profit and gross margin during the period.
Operating expenses for the first quarter ended March 31, 2021 were RMB10.5 million (US$1.6 million), which was RMB4.5 million, or 30.0% lower than the same period in 2020. This decrease was mainly due to the decreased depreciation on the Dornier Production Line and the trial production line as assets of these two production lines were classified as assets as held for sale.
Net profit attributable to the Company during the first quarter ended March 31, 2021 was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million during the same period in 2020.
Basic and diluted net benefit per share was RMB9.60 (US$1.47) and RMB3.97 for the three-month period ended March 31, 2021 and 2020, respectively.
Total shareholders’ equity was RMB259.2 million or US$39.6 million as of March 31, 2021, compared with RMB227.8 million as of December 31, 2020.
As of March 31, 2021, the Company had 3,265,837 basic and diluted ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Friday, June 25, 2021, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 minutes prior to the scheduled start time.
A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 41764.
About Fuwei Films
Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. (“Fuwei Shandong”). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei’s BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.
Safe Harbor
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission which, among other things, include the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the uncertainty of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People’s Republic of China (“China“) conducted by certain countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company’s operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company’s estimates as of the date of the press release, and subsequent events and developments may cause the Company’s estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company’s estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.
Financial Tables to Follow
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2021 AND DECEMBER 31, 2020 (amounts in thousands except share and per share value) (Unaudited) |
|||||
|
March 31, 2021 |
December 31, 2020 |
||||
|
RMB |
US$ |
RMB |
|||
|
ASSETS |
|||||
|
Current assets |
|||||
|
Cash and cash equivalents |
218,279 |
33,316 |
113,423 |
||
|
Restricted cash |
12,500 |
1,908 |
7,500 |
||
|
Accounts and bills receivable, net |
45,329 |
6,919 |
32,393 |
||
|
Inventories |
22,227 |
3,393 |
25,436 |
||
|
Advance to suppliers |
12,408 |
1,894 |
7,359 |
||
|
Prepayments and other receivables |
1,172 |
179 |
1,103 |
||
|
Assets held for sale |
122,919 |
18,761 |
122,919 |
||
|
Deferred tax assets – current |
6,947 |
1,060 |
6,947 |
||
|
Total current assets |
441,781 |
67,430 |
317,080 |
||
|
Plant, properties and equipment, net |
108,879 |
16,618 |
111,308 |
||
|
Lease prepayments, net |
15,085 |
2,302 |
15,219 |
||
|
Advance to suppliers – long term, net |
926 |
141 |
1,542 |
||
|
Deferred tax assets – non current |
472 |
72 |
507 |
||
|
Total assets |
567,143 |
86,563 |
445,656 |
||
|
LIABILITIES AND EQUITY |
|||||
|
Current liabilities |
|||||
|
Short-term borrowings |
65,000 |
9,921 |
65,000 |
||
|
Due to related parties |
50,519 |
7,711 |
73,571 |
||
|
Accounts payables |
20,187 |
3,081 |
25,730 |
||
|
Notes payable |
25,000 |
3,816 |
15,000 |
||
|
Advance from customers |
139,112 |
21,233 |
9,297 |
||
|
Accrued expenses and other payables |
6,318 |
964 |
27,400 |
||
|
Total current liabilities |
306,136 |
46,726 |
215,998 |
||
|
Deferred tax liabilities |
1,838 |
281 |
1,854 |
||
|
Total liabilities |
307,974 |
47,007 |
217,852 |
||
|
Equity |
|||||
|
Shareholders’ equity |
|||||
|
Registered capital (of US$0.519008 par value; |
13,323 |
2,033 |
13,323 |
||
|
Additional paid-in capital |
311,907 |
47,606 |
311,907 |
||
|
Statutory reserve |
37,441 |
5,715 |
37,441 |
||
|
Accumulated deficit |
(104,342) |
(15,926) |
(135,707) |
||
|
Cumulative translation adjustment |
840 |
128 |
840 |
||
|
Total shareholders’ equity |
259,169 |
39,556 |
227,804 |
||
|
Total equity |
259,169 |
39,556 |
227,804 |
||
|
Total liabilities and equity |
567,143 |
86,563 |
445,656 |
||
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020 (amounts in thousands except share and per share value) (Unaudited) |
|||||
|
The Three-Month Period Ended March 31, |
|||||
|
2021 |
2020 |
||||
|
RMB |
US$ |
RMB |
|||
|
Net sales |
101,624 |
15,511 |
83,233 |
||
|
Cost of sales |
59,174 |
9,032 |
53,474 |
||
|
Gross Profit |
42,450 |
6,479 |
29,759 |
||
|
Operating expenses |
|||||
|
Selling expenses |
4,114 |
628 |
4,086 |
||
|
Administrative expenses |
6,355 |
970 |
10,955 |
||
|
Total operating expenses |
10,469 |
1,598 |
15,041 |
||
|
Operating income |
31,981 |
4,881 |
14,718 |
||
|
Other income (expense) |
|||||
|
– Interest income |
856 |
131 |
289 |
||
|
– Interest expense |
(1,575) |
(240) |
(2,216) |
||
|
– Others income (expense),net |
122 |
19 |
69 |
||
|
Total other expense |
(597) |
(90) |
(1,858) |
||
|
Income (loss) before provision for income taxes |
31,384 |
4,791 |
12,860 |
||
|
Income tax benefit (expense) |
(19) |
(3) |
94 |
||
|
Net income |
31,365 |
4,788 |
12,954 |
||
|
Net loss attributable to non-controlling interests |
– |
– |
– |
||
|
Net income attributable to the Company |
31,365 |
4,788 |
12,954 |
||
|
Other comprehensive income |
|||||
|
– Foreign currency translation adjustments attributable to |
– |
– |
– |
||
|
– Foreign currency translation adjustments attributable to the |
– |
– |
– |
||
|
Comprehensive loss attributable to non-controlling interest |
– |
– |
– |
||
|
Comprehensive income (loss) attributable to the Company |
31,365 |
4,788 |
12,954 |
||
|
Earnings per share, |
9.60 |
1.47 |
3.97 |
||
|
Weighted average number ordinary shares, |
3,265,837 |
3,265,837 |
3,265,837 |
||
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020 (amounts in thousands except share and per share value) (Unaudited) |
||||||
|
The Three-Month Period Ended March 31, |
||||||
|
2021 |
2020 |
|||||
|
RMB |
US$ |
RMB |
||||
|
Cash flow from operating activities |
||||||
|
Net income |
31,365 |
4,788 |
12,954 |
|||
|
Adjustments to reconcile net loss to net cash |
||||||
|
used in operating activities |
||||||
|
– Depreciation of property, plant and equipment |
3,162 |
483 |
6,847 |
|||
|
– Amortization of intangible assets |
134 |
20 |
134 |
|||
|
– Deferred income taxes |
19 |
3 |
(94) |
|||
|
– Bad debt expense |
(2) |
– |
447 |
|||
|
-Inventory provision |
– |
– |
– |
|||
|
Changes in operating assets and liabilities |
||||||
|
– Accounts and bills receivable |
(12,934) |
(1,974) |
(14,984) |
|||
|
– Inventories |
3,209 |
490 |
(679) |
|||
|
– Advance to suppliers |
(5,049) |
(771) |
(6,171) |
|||
|
– Prepaid expenses and other current assets |
(69) |
(11) |
(73) |
|||
|
– Accounts payable |
(5,542) |
(846) |
1,285 |
|||
|
– Accrued expenses and other payables |
(21,259) |
(3,246) |
– |
|||
|
– Advance from customers |
11,607 |
1,772 |
(3,540) |
|||
|
– Tax payable |
177 |
27 |
1,590 |
|||
|
Net cash provided by operating activities |
4,818 |
735 |
(2,284) |
|||
|
Cash flow from investing activities |
||||||
|
Purchases of property, plant and equipment |
(734) |
(112) |
(364) |
|||
|
Restricted cash related to trade finance |
– |
– |
– |
|||
|
Advanced to suppliers – non current |
616 |
94 |
– |
|||
|
Proceeds from sale of property, plant and equipment |
118,208 |
18,042 |
– |
|||
|
Net cash provided by investing activities |
118,090 |
18,024 |
(364) |
|||
|
Cash flow from financing activities |
||||||
|
Proceeds from related party |
(23,052) |
(3,518) |
1,148 |
|||
|
Payment of capital lease obligation |
– |
– |
– |
|||
|
Change in notes payable |
10,000 |
1,526 |
(14,200) |
|||
|
Net cash used in financing activities |
(13,052) |
(1,992) |
(13,052) |
|||
|
Effect of foreign exchange rate changes |
– |
(75) |
– |
|||
|
Net decrease in cash and cash equivalent |
109,856 |
16,692 |
(15,700) |
|||
|
Cash and cash equivalent |
||||||
|
At beginning of period/year |
120,923 |
18,532 |
86,371 |
|||
|
At end of period/year |
230,779 |
35,224 |
70,671 |
|||
|
SUPPLEMENTARY DISCLOSURE: |
||||||
|
Interest paid |
1,575 |
240 |
2,216 |
|||
|
Income tax paid |
– |
– |
– |
|||
|
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: |
||||||
|
Account payable for plant and equipment: |
1,010 |
154 |
1,010 |
|||
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Source: Fuwei Films (Holdings) Co., Ltd.