Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2021

Rhea-AI Summary

Fuwei Films (FFHL) reported a strong performance for Q1 2021, with net sales reaching RMB 101.6 million (US$15.5 million), a 22.1% increase from RMB 83.2 million last year. Specialty films constituted 63.9% of total revenues at RMB 65.0 million. Gross profit improved to RMB 42.5 million (41.8% margin), up from RMB 29.8 million (35.8% margin) a year ago. Net profit attributable to shareholders surged to RMB 31.4 million (RMB 9.60 per share), compared to RMB 13.0 million previously. The company also saw a 55.2% rise in overseas sales.

Positive

• Net sales increased to RMB 101.6 million, up 22.1% year-on-year.
• Gross profit rose to RMB 42.5 million with a margin improvement to 41.8%.
• Net profit surged to RMB 31.4 million compared to RMB 13.0 million a year ago.
• Specialty films sales accounted for 63.9% of total revenues, indicating strong demand.

Negative

• None.

BEIJING, June 24, 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 Ended March 31, 2021		% of  Total	Three-Month Period Ended March 31, 2020	% of  Total
	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 application	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 Ended March 31, 2021		% of  Total	Three-Month Period Ended March 31, 2020	% of  Total
		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; 5,000,000 shares authorized; 3,265,837 issued and outstanding)		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 non-controlling interest		-	-		-
- Foreign currency translation adjustments attributable to the Company		-	-		-
Comprehensive loss attributable to non-controlling interest		-	-		-
Comprehensive income (loss) attributable to the Company		31,365	4,788		12,954
Earnings per share, Basic and diluted		9.60	1.47		3.97
Weighted average number ordinary shares, Basic and diluted		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.

FAQ

What were Fuwei Films' Q1 2021 net sales results?

Fuwei Films reported net sales of RMB 101.6 million (US$15.5 million) for Q1 2021, a 22.1% increase year-on-year.

How did specialty films perform in Q1 2021 for FFHL?

Sales of specialty films reached RMB 65.0 million, making up 63.9% of total revenues.

What is the net profit of Fuwei Films for the first quarter of 2021?

The net profit attributable to the company was RMB 31.4 million (US$4.8 million) for Q1 2021.

What is the gross profit margin for FFHL in Q1 2021?

Fuwei Films reported a gross profit margin of 41.8% for Q1 2021, an increase from 35.8% in the same period last year.

How much did overseas sales increase for Fuwei Films in Q1 2021?

Overseas sales increased by 55.2% to RMB 9.0 million in Q1 2021.