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Hurt by high oil prices
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zhuge_liang
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20-Dec-2006 22:44
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Xingda has reportedly attracted GIC, Henderson Land chairman Lee Shau- kee, and Goldman Sach's investment arm as strategic investors. |
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giantlow
Master |
19-Dec-2006 15:36
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Wah. Stamford Tyres got more competition eh. |
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zhuge_liang
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19-Dec-2006 15:32
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Xingda International Holdings, a Chinese manufacturer of radial tyre cords, is set to raise up to HK$1.19b in a HK IPO, the company said Thursday. Xingda was China's largest supplier of tyre cords in 2005, with a domestic market share of 40%. The company is selling 386m shares, or 30% of enlarged share capital, at HK$2.45 - HK$3.08 apiece. Xingda will start its Hong Kong retail offering on Friday, with the shares set to begin trading on Dec. 21. |
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Nostradamus
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06-Sep-2006 11:38
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Rubber planters in Asia are tapping trees faster than ever, pushing down prices and helping a recovery in shares of tyremakers Bridgestone, Michelin and Goodyear. Rubber prices in Tokyo, the world's biggest futures market for the material, have fallen > 20% since reaching a record on June 12. Shares of Tokyo-based Bridgestone, the world's 2nd- largest tyremaker, have climbed 15% in the past month while stock in France-based Michelin, the biggest, has climbed 16%. U.S.-based Goodyear, the biggest U.S. tyremaker, also has rallied 16%. At their 2006 lows, set late last month, the stocks had fallen 11%, 14% and 39%, respectively, over the past year. Further declines in crude oil prices would also help tyre companies, because oil is used to produce synthetic rubber. Crude futures have fallen > 7% since setting a record July 14 in New York futures trading. Synthetic rubber's market share will be little changed in 2006 at about 58%, according to the rubber study group. Materials including rubber, textiles, chemicals and steel cord account for about a third of the cost of a tyre, according to Adam Jonas, a Morgan Stanley analyst in London. Bridgestone, Michelin and Goodyear all raised tyre prices this year to offset higher costs. The decline in rubber prices will enable Bridgestone to report profit growth of slightly more than 10% next year, according to Shingo Hayashi, an analyst in Tokyo for Daiwa Institute of Research. He rates the stock "outperform"' and said it may reach 2,750 yen in the next six months, a 16% gain. Michelin last month reduced its profit target for the year after reporting a first-half slump in earnings because of higher rubber costs. Standard & Poor's on Aug. 3 lowered its credit rating on the company, citing the earnings decline. Jonas at Morgan Stanley raised his rating on the stock Aug. 1 to "overweight" from "equal-weight". Assuming raw material prices fall no further, the stock will gain as the company cuts costs and the truck-tyre market recovers, he wrote in a report. Himanshu Patel, an analyst at J.P. Morgan Securities Inc. in New York, increased his rating on Goodyear shares Aug. 22 to "overweight" from "neutral", citing the prospect of a favourable outcome to negotiations with unionized workers in the U.S. Earnings in the second half of the year will be helped by the decline in rubber prices, Patel wrote in a report. Goodyear shares sell for 8.1x Patel's estimate of the company's 07 earnings, below its average PER of 11 over the past 15 years. Shares of the 10 largest tyremakers by market value have risen in the past month, led by a 33% gain in Finland's Nokian Renkaat Oyj, the biggest Nordic tiremaker. The average gain for the 10 stocks was 14%. "Natural rubber prices will decline further as supply catches up," Wang said. "Tyremakers' raw material costs will decline." Falling rubber prices could increase demand for tyre cords by tyre manufacturers. Falling oil prices will reduce cost of CPL. Hence, these will benefit Junma. |
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Nostradamus
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06-Sep-2006 11:24
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Sales of nylon tyre cord decreased due mainly to decrease in sales volume and average selling price which are attributable to the following reasons: 1) Domestic sales volume decreased due to reduced demand from tyre manufacturers as a result of higher cost of production of tyres caused by substantially higher raw material prices in particular rubber and carbon black. However, its domestic market share increased to 30% as at end HY06. 2) Export sales volume decreased due primarily to imposition of anti-dumping duties by India. 3) Average selling price of nylon tyre cord decreased due mainly to: a) Fall in the price of CPL, a crude oil derivative. CPL price accounts for approximately 79% of the total cost of nylon tyre cords. b) Due to the fall in sales demand of nylon tyre cord, resulting in the price of nylon tyre cord falling by a relatively larger margin than the fall in CPL price. With the fall in oil and rubber prices, Junma should benefit. |
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Nostradamus
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13-Aug-2006 21:19
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Its price is at the lowest in its history. 2G Capital made mistakes in this company and mDR. But 2G does have successes in other companies. My point is that it doesn't have the Midas touch. Not every company it invests in turned to gold. The Steel Tyre Cord (STC) business is running close to full capacity, but remains loss-making at despite falling steel price. the rising prices of caprolactam (CPL), an oil derivate which comprises 60-70% of Junma's cost, will affect Junma's margin. Junma is unable to pass on the higher raw material costs to downstream tyre manufacturers. Its customers, tyre manufacturers, also suffering. Junma's leverage is expected to rise from 3.1x to 3.6x in 2005. Gearing has deteriorated from 2.3x to 2.4x. If Junma is able to refinance its debt, its bankruptcy risk will be under control. Of its over Rmb1b debt, 78% is short-term debt. Since Junma has good relations with local banks, it is possible for Junma to refinance its loans when they expire. Junma is also trying to transfer its short-term loans into long-term ones. Meanwhile, we can expect a possible fund-raising exercise to fix its cash crunch and keep its gearing in check. Production output from its steel tyre cord (STC) facility is expected to be ramped up by this year-end. However, STC sales is projected to only make a minor contribution to total sales. Hence, the STC business is unlikely to pull Junma out of the rut in the short to medium term. |
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