China Sunsine Chemicals

potatolover wrote: Dropped below 40 cents, even after analyst called for 69 cents Target level...

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Do you think 69 cents (equiv to 7X PE) is out of reach for a business that has scale (being No.1 in China) and economies of scale (hence its 27% gross margin in 2014)?

Sunsine is the world's largest rubber accelerator producer, with 17% of global output.

Tyres consume 60% of world's rubber output, and Sunsine's clients are predominantly tyre companies. 28% of tyres all over the world are produced with Sunsine's accelerators.

Another profit alert:

the Group is expected to report a substantial increase in consolidated net profit, compared to the corresponding period from 1 January 2014 to 31 March 2014.

The expected profit growth is mainly due to the increase in gross profits as sales volume of the Group’s products increased, while the cost of raw materials decreased. The expected profit growth is consistent with the trend of decreased cost of raw materials as seen in the previous quarter.

infopub.sgx.com/FileOpen/ChinaSunsine_Po...cement&FileID=345166

Great start. If cash flow improve, it will be a lot more attractive!

R&D expenses in 1Q shot up to 10m rmb, from 0.5 m rmb. I don't like this.

(quote company: "The increase in R&D expense was due to R&D activities undertaken by the Group to enhance our product quality and also to develop other potential products in order to enrich our product line.") I find this not sufficiently clear .

infopub.sgx.com/FileOpen/Response%20to%2...cement&FileID=352344

I view R&D spending positively.
An example is the reintroduction of DCBS after finding ways to produce this high-valued rubber chemical without waste water discharge.