Fuwei Films Announces Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

Fuwei Films (FFHL) reported its financial results for Q4 and the full year of 2021. Net revenues for Q4 were RMB92.6 million (US$14.5 million), a 7.2% increase year-over-year, with specialty film sales rising 14.1% to RMB71.1 million (US$11.2 million). Full-year revenues reached RMB396.8 million (US$62.3 million), up 17.8%, with specialty films accounting for 69.9% of total revenues. Net income in 2021 rose to RMB89.2 million (US$14.0 million) from RMB19.6 million in 2020, while gross margin decreased to 37.5%. Cash reserves increased significantly to RMB250.6 million (US$39.3 million).

Positive

• Full-year net revenues rose by 17.8% to RMB396.8 million (US$62.3 million).
• Specialty film sales for 2021 increased by 35.5%, accounting for 69.9% of total revenues.
• Net income attributable to the Company grew to RMB89.2 million (US$14.0 million) from RMB19.6 million in 2020.
• Operating expenses decreased significantly by 53.1% year-over-year.

Negative

• Gross margin declined to 37.5% from 40.6% in 2020.
• Net cash provided by operating activities fell to RMB79.9 million (US$12.5 million) from RMB117.5 million a year ago.

BEIJING, April 28, 2022 /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 financial results for the fourth quarter and full year ended December 31, 2021.

4Q 2021 Highlights

• Net revenues were RMB92.6 million or US$14.5 million
• Sales of specialty films were RMB71.1 million or US$11.2 million, up 14.1% year-over-year
• Gross margin was 30.8%, down from 42.2% a year ago
• Net income attributable to the Company was RMB11.4 million or US$1.8 million
• Basic and diluted earnings per share was RMB3.48 or US$0.55

Full Year 2021 Highlights

• Net revenues were RMB396.8 million or US$62.3 million
• Sales of specialty films were RMB277.3 million or US$43.5 million, up 35.5% year-over-year
• Net income attributable to the Company was RMB89.2 million or US$14.0 million, up from a net income of RMB19.6 million in 2020
• Basic and diluted earnings per share was RMB27.32 or US$4.29, up from a profit per share of RMB6.00 a year ago
• Net cash provided by operating activities was RMB79.9 million or US$12.5 million, compared to RMB117.5 million a year ago

"In 2021, our revenues and gross margins continued to grow. Sales of specialty films increased by 35.5% year-over-year and accounted for 69.9% of our total revenues for the year. Our gross margin was 37.5% in 2021. We are encouraged by positive trends recorded in both revenues and gross margins, which we expect to enable us to better navigate the industrial and economic landscape ahead. We believe that our focus on innovation will allow the Company to expand end-user product applications, attract new clients, and expand relationships with existing customers," commented Mr. Lei Yan, CEO and Chairman of the Company.

Fourth Quarter 2021 Results

Revenues for the fourth quarter of 2021 were RMB92.6 million or US$14.5 million, compared with RMB86.4 million in the fourth quarter of 2020, an increase of RMB6.2 million, or 7.2%. Sales volume accounted for an increase of RMB0.6 million, while the increase in average sales price resulted in an increase of RMB5.6 million.

Sales of specialty films for the fourth quarter of 2021 were RMB71.1 million or US$11.2 million, accounting for 76.8% of total revenues, compared with RMB62.3 million or 72.1% of total revenue in the fourth quarter of 2020. Higher sales volume accounted for an increase of RMB5.5 million, while the rise in average sales price resulted in an increase of RMB3.3 million.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2021, and 2020 (amounts in thousands):

		Three months period ended
		December 31, 2021		% of Total	December 31, 2020	% of Total
		RMB	US$		RMB
Stamping and transfer film		13,240	2,077	14.2%	15,193	17.6%
Printing film		3,752	589	4.1%	4,117	4.8%
Metallized film		802	126	0.9%	815	0.9%
Specialty film		71,064	11,151	76.8%	62,285	72.1%
Base film for other applications		3,726	585	4.0%	3,940	4.6%
Total		92,584	14,528	100%	86,350	100%

 

Sales in China for the fourth quarter of 2021 were RMB86.6 million, or US$13.6 million,  representing 93.6% of total revenues, compared with RMB80.5 million or 93.2% of total revenues recorded in the fourth quarter of 2020. Higher sales volume accounted for an increase of RMB0.3 million, while the rise in average sales price explained the increase of RMB5.8 million.

Overseas sales for the fourth quarter of 2021 amounted to RMB5.9 million or US$0.9 million,  representing 6.4% of total revenues, compared with RMB5.9 million or 6.8% of total revenues in the fourth quarter of 2020.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2021, and 2020 (amounts in thousands):

		Three-month period ended
		December 31, 2021		% of Total	December 31, 2020	% of Total
		RMB	US$		RMB
Sales in China		86,636	13,595	93.6%	80,500	93.2%
Sales in other countries		5,948	933	6.4%	5,850	6.8%
Total		92,584	14,528	100%	86,350	100%

 

Gross profit for the fourth quarter of 2021 was RMB28.5 million or US$4.5 million, representing a gross margin of 30.8%, compared with a gross profit of RMB36.5 million, or a gross margin of 42.2% in the fourth quarter of 2020.

Operating expenses for the fourth quarter of 2021 totaled RMB17.9 million or US$2.8 million, compared with RMB60.6 million in the fourth quarter of 2020.

Net income attributable to the Company for the fourth quarter of 2021 was RMB11.4 million or US$1.8 million, compared with a net loss of RMB20.9 million in the fourth quarter of 2020.

Basic and diluted earnings per share was RMB3.48 or US$0.55, compared with basic and diluted loss per share of RMB6.39 in the fourth quarter of 2020.

2021 Full Year Results

During the fiscal year ended December 31, 2021, net revenues reached RMB396.8 million (US$62.3 million), compared to RMB336.8 million in 2020, representing an increase of RMB60.0 million, or 17.8%.

In 2021, sales of specialty films were RMB277.3 million (US$43.5 million), accounting for 69.9% of our total revenues as compared to RMB204.7 million, or 60.8% in 2020, representing an increase of RMB72.6 million, or 35.5% above those recorded in 2020. Higher sales volume led to an increase of RMB59.0 million, and an RMB13.6 million increase from the rise in average sales price.

Overseas sales were RMB39.4 million (US$6.2 million) or 9.9% of total revenues, compared with RMB27.0 million or 8.0% of total revenues in 2020. The rise in average sales price caused an increase of RMB2.5 million, and the higher sales volume explained the RMB9.9 million increase.

The following is a breakdown of domestic versus overseas sales for the years ended December 31, 2021, and 2020 (amounts in thousands):

	For the year ended December 31,
		2021		% of Total	2020	% of Total
		RMB	US$		RMB
Sales in China		357,396	56,083	90.1%	309,801	92.0%
Sales in other countries		39,403	6,183	9.9%	26,954	8.0%
		396,799	62,266	100.0%	336,755	100.0%

 

Our gross profit for the year ended December 31, 2021, was RMB148.9 million (US$23.4 million), up from RMB 136.7 million in 2020. Our average unit sales price rose 11.0% when compared to last year. The unit sales cost increased 16.7% due to the higher raw materials prices. Consequently, the increase in cost of goods sold per unit exceeded that of sales price during 2021 compared with 2020, contributing to the decrease in our gross margin. Our gross margin was 37.5% for the year 2021, compared to a gross margin of 40.6% in 2020.

Our operating expenses during the year ended December 31, 2021, were RMB54.1 million (US$8.5 million), a decrease of RMB61.2 million, or 53.1%, as compared to 2020. The decrease was mainly due to the reduction in loss on impairment of assets held for sale and depreciation of property, plant, and equipment.

Net income attributable to the Company for the full year of 2021 was RMB89.2 million or US$14.0 million, up from a net profit attributable to the Company of RMB19.6 million in 2020.

Basic and diluted earnings per share for the year ended December 31, 2021, was RMB27.32 or US$4.29, up from a profit per share of RMB6.00 a year ago.

Net cash provided by operating activities was RMB79.9 million or US$12.5 million for the year ended December 31, 2021, as compared to net cash provided by operating activities of RMB117.5 million for the year ended December 31, 2020.

Cash and cash equivalents on December 31, 2021 amounted to RMB250.6 million or US$39.3 million, compared with RMB113.4 million as of December 31, 2020.

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 for packaging 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 significant competition in the BOPET film industry, especially 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 adverse impact 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 main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully obtain additional funds to meet the working capital needs of the new BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread; risks related to an economic downturn or recession in the United States and in other countries around the world; and changes in political, business, and economic conditions, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. 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 the information contained in the forward-looking statements as a result of the risk factors.

 

 

Financial Tables Follow

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2021, and 2020
(amounts in thousands, except share and per share data)
				December 31, 2021				December 31, 2020
				RMB		US$		RMB
ASSETS
Current assets
Cash and cash equivalents				250,608		39,326		113,423
Restricted cash				28,294		4,440		7,500
Accounts and bills receivable, net				29,225		4,586		32,393
Inventories				35,456		5,564		25,436
Advance to suppliers				7,933		1,245		7,359
Prepayments and other receivables				1,199		188		1,103
Assets held for sale				0		0		122,919
Deferred tax assets – current				1,144		180		6,947
Total current assets				353,859		55,529		317,080
Property, plant and equipment, net				106,928		16,779		111,308
Construction in progress				0		0		—
Lease prepayments, net				14,685		2,304		15,219
Advance to suppliers - long term, net				0		0		1,542
Deferred tax assets - non-current				227		36		507
Total assets				475,699		74,648		445,656
LIABILITIES AND EQUITY
Current liabilities
Short-term loans				65,000		10,200		65,000
Due to related parties				0		0		73,571
Accounts payables				22,616		3,549		25,730
Notes payable				50,126		7,866		15,000
Advance from customers				7,672		1,204		9,297
Accrued expenses and other payables				11,479		1,801		27,400
Total current liabilities				156,893		24,620		215,998
Deferred tax liabilities				1,789		281		1,854
Total liabilities				158,682		24,901		217,852
Equity
Shareholders' equity
Registered capital(of US$0.519008 par value; 5,000,000 shares authorized; 3,265,837 issued and outstanding)				13,323		2,091		13,323
Additional paid-in capital				311,907		48,945		311,907
Statutory reserve				37,441		5,875		37,441
Retained earnings				(46,494)		(7,296)		(135,707)
Cumulative translation adjustment				840		132		840
Total shareholders' equity				317,017		49,747		227,804
Total equity				317,017		49,747		227,804
Total liabilities and equity				475,699		74,648		445,656

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2021, 2020 and 2019
(amounts in thousands, except share and per share data)
				The Year Ended December 31,
				2021				2020		2019
				RMB		US$		RMB		RMB
Net sales				396,799		62,266		336,755		335,620
Cost of sales				247,902		38,901		200,056		252,010
Gross profit				148,897		23,365		136,699		83,610
Operating expenses:
Selling expenses				20,706		3,249		17,483		13,721
Administrative expenses				33,424		5,245		59,865		46,794
Loss on assets held for sale				0		0		37,951		—
Total operating expenses				54,130		8,494		115,299		60,515
Operating  income (loss)				94,767		14,871		21,400		23,095
Other income (expense):
- Interest income				5,128		805		2,145		1,106
- Interest expense				(5,054)		(793)		(8,490)		(8,892)
- Other income (expense), net				390		61		(1,560)		(1,621)
Total other income (expense)				464		73		(7,905)		(9,407)
Income (loss) before provision for income taxes				95,231		14,944		13,495		13,688
Income tax (expense) benefit				(6,018)		(944)		6,115		(2,325)
Net income (loss)				89,213		14,000		19,610		11,363
Net income (loss) attributable to noncontrolling interests				0		0		—		—
Net income (loss) attributable to the Company				89,213		14,000		19,610		11,363
Other comprehensive income (loss):
- Foreign currency translation adjustments attributable to noncontrolling interest				0		0		—		—
- Foreign currency translation adjustments attributable to the Company				0		0		—		—
Comprehensive income (loss) attributable to non-controlling interest				0		0		—		—
Comprehensive income (loss) attribute to the Company				89,213		14,000		19,610		11,363
Net earnings (loss) per share, Basic and diluted				27.32		4.29		6.00		3.48
Weighted average number of ordinary shares, Basic and diluted				3,265,837		3,265,837		3,265,837		3,265,837

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021, 2020 and 2019
(Amounts in thousands)
		The Years Ended December 31,
		2021				2020		2019
		RMB		US$		RMB		RMB
Cash flow from operating activities
Net income (loss)		89,213		14,000		19,610		11,363
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
- Loss on assets held for sale impairment		0		0		37,951		—
- Depreciation of property, plant, and equipment		12,365		1,940		41,722		41,451
- Amortization of intangible assets		534		84		534		534
- Deferred income taxes (benefit)		6,018		944		(6,115)		2,325
- Bad debt (recovery) expense		(1,230)		(193)		578		(1,014)
- Inventory provision		(431)		(68)		267		1,489
Changes in operating assets and liabilities
- Investment income recorded on Fuwei Holdings' book		0		0		—		—
- Accounts and bills receivable		3,470		545		(5,086)		(3,319)
- Inventories		(9,589)		(1,505)		(2,119)		(399)
- Advance to suppliers		352		55		(2,009)		(583)
- Prepaid expenses and other current assets		(96)		(15)		(35)		10
- Accounts payable		(3,114)		(489)		6,198		(1,217)
- Accrued expenses and other payables		(15,273)		(2,398)		21,938		(302)
- Advance from customers		(1,625)		(255)		4,093		3,344
- Tax payable		(645)		(101)		9		684
Net cash provided by (used in) operating activities		79,949		12,544		117,536		54,366
Cash flow from investing activities
Purchases of property, plant, and equipment		(7,986)		(1,253)		(11,257)		(12,925)
Advanced to suppliers - non-current		1,542		242		—		—
Amount change in construction in progress		0		0		—		366
Proceeds from sale of property, plant, and equipment		122,919		19,289		—		—
Deposit for purchase		0		0		—		—
Net cash used in (provided by) investing activities		116,475		18,278		(11,257)		(12,559)
Cash flow from financing activities
Principal payments of bank loans		0		0		—		—
Proceeds from short-term bank loans		0		0		—		50
Proceeds from related party		(73,571)		(11,545)		(45,726)		4,606
Payment of capital lease obligation		0		0		—		—
Change in notes payable		35,126		5,512		(26,000)		(7,000)
Net cash provided by (used in) financing activities		(38,445)		(6,033)		(71,726)		(2,344)
Effect of foreign exchange rate changes		0		445		(1)		—
Net increase (decrease) in cash and cash equivalent, restricted cash		157,979		25,234		34,552		39,463
Cash and cash equivalent, and restricted cash
At beginning of the period/year		120,923		18,532		86,371		46,908
At end of the period/year		278,902		43,766		120,923		86,371
SUPPLEMENTARY DISCLOSURE:
Interest paid		5,054		793		8,490		8,892
Income tax paid		0		0		—		—
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:
Account payable for plant and equipment:		1,010		158		1,010		1,010
Obligations for acquired equipment under capital lease:		0		0		—		—

 

 

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SOURCE Fuwei Films

FAQ

What were Fuwei Films' Q4 2021 financial results?

Fuwei Films reported Q4 2021 revenues of RMB92.6 million (US$14.5 million), a 7.2% increase year-over-year.

How much did specialty film sales grow in 2021 for FFHL?

Specialty film sales for fully year 2021 increased by 35.5% to RMB277.3 million (US$43.5 million).

What is the net income for Fuwei Films in 2021?

Net income for Fuwei Films in 2021 was RMB89.2 million (US$14.0 million), up from RMB19.6 million in 2020.

How did Fuwei Films' earnings per share change in 2021?

Basic and diluted earnings per share for 2021 were RMB27.32 (US$4.29), up from RMB6.00 in 2020.

What were the operating expenses for Fuwei Films in 2021?

Operating expenses for 2021 were RMB54.1 million (US$8.5 million), down 53.1% compared to 2020.