Huaxing Chemical Flees from Deficit in 2011

Anhui Huaxing Chemical Industry Co., Ltd. (Huaxing Chemical) went through 2011 at last, without worrying about consecutive deficit following 2010 which will lead to special treatment for the company in stock market. According to 2011 performance forecast released on Feb. 24, 2012, Anhui Huaxing was predicted to meet the fruit of performance growth that net profit and revenue rose by 103% and 9.19% year on year to USD0.6 million and USD0.15 billion respectively last year, according to CCM International’s March Issue of Herbicides China News.

Even though the data of Huaxing Chemical's 2011 performance hasn't been confirmed by the accounting firm yet, it can be sure that Huaxing Chemical had overturned the deficit situation of 2010 in 2011 with the financial assistance from the local government.

Admitted by Huaxing Chemical in the forecast, the governmental subsidy has improved Huaxing Chemical's finance of 2011 indeed. Aiming to save Huaxing Chemical from continuous deficit and the risk of special treatment in stock market, in detail, the local government in Anhui Province had given Huaxing Chemical USD11.8 million (RMB75 million) in the name of research subsidy at the end of 2011.

It's noteworthy that Huaxing Chemical's sales profit in 2011 was still negative, which reached USD-14.2 million with year-on-year growth of 28.74%. As explained by Huaxing Chemical, it was because abnormal climate impacted on the company's insecticide businesses and stagnant glyphosate market eroded the company performance in 2011. Especially, limited profit room in glyphosate production always exerts pressure on Huaxing Chemical, whose main business focuses on glyphosate with technical capacity of about 70,000t/a, though the company has been taking effort to improve current glyphosate performance by adjusting market strategy and management.

Thus, Huaxing Chemical's weak behavior still tenses investors' nerves, and even led them to oppugn company operation once. Some opinions pointed out that Huaxing Chemical's poor performance in recent years has much to do with the company's unadvisable and mutable strategies. As indicated in this opinion, for example, Huaxing Chemical mapped out large investment in the 34,000t/a IDAN project and 20,000t/a glyphosate technical transformation (both initiated in 2009), but can't gain profit from these investments. (Herbicides China News 1112: Huaxing Chemical oppugned)

It probably can relieve the investors a little that Huaxing Chemical's share price (Share code: SZ002018) appears upward recently, but the truth is that the whole uptrend of share market in China contributes primarily to this. According to the tracing as of Feb. 24, 2012, SZSE Component Index has jumped by almost 1,500 points on the basis of the opening level in 2012 of about 8,600 points.

At any rate, Huaxing Chemical's glyphosate business always faces various challenges. Shadowed by shrinking demand in overseas market due to global economic turbulence, Chinese glyphosate encountered anti-dumping investigation from Australian government and price reduction of Roundup recently. It can be said that Chinese glyphosate manufacturers creep for survival in this industry.

As to Huaxing Chemical's performance in 2012, it can't be estimated how the company's performance will be impacted by the complicated market factors, though Huaxing Chemical has been putting large effort to change current situation.

Source: Herbicides China News 1203

http://www.cnchemicals.com/Newsletter/NewsletterDetail_11.html

Content of Herbicides China News 1203:

Chinese pesticide export in 2011-the cahier in 2012 CAC Conference

Huaxing Chemical flees from deficit in 2011

Assets exchange of Huayang Technology blocked

Jiangsu Changqing launches 300t/a nicosulfuron IPO project

Sanonda to launch 10,000t/a pyridine production

MAX (Rudong) emphasizes innovative herbicide technology

Jiangsu Repont to relocate sulfonylurea herbicide production

Pesticide companies promote herbicide sales in March

Chinese 2,4-D witnesses growth in 2011

Decreasing doses of herbicide application researched in China

Chinese paraquat meets demand increase

Dicamba meets supply shortage in Feb.

Wanquan Hongyu's clethodim does not out-sold

Jiangsu Jiannong to resume clomazone supply

Herbicide price fluctuates slightly in early March

Herbicides China News, a monthly publication issued by CCM International on 15^th of every month, provides you with the latest occurrences, exclusive analysis on the market trend as well as professional reviews on competitiveness of companies, products and relative industries in China’s herbicide industry.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1009.html

Investors Question Huaxing Chemical for its Weak Performance

On Nov. 23, 2011, Anhui Huaxing Chemical Industry Co., Ltd. (Huaxing Chemical) announced that it would close one of its subsidiary. The constantly weak performance of Huaxing Chemical makes investors concern about its unadvisable and mutable strategies, and the company was criticized and blamed by investors. CCM’s December Issue of Herbicides China News shares with you the detailed story.

Huaxing Chemical lost USD20.1 million (RMB127.7 million) in net profit in the whole year of 2010, and witnessed continuously net profit loss of USD4.3 million (RMB27.6 million) in the first three quarters of 2011. As a result, Huaxing Chemical's stock price in the exchange market always appears sluggish and unstable after 2008.

Although current pesticide market is unfavorable, the investors doubt that the poor operation and management of Huaxing Chemical are the major reason why the company performed so badly. Take this subsidiary liquidation for example, Huaxing Chemical claimed that the liquidation of its subsidiary Anhui Huaxing Chemical Industry Chongqing Co., Ltd. (Huaxing Chongqing) is due to the current unsuitable situation. But some rumors indicated that the liquidation of Huaxing Chongqing is mainly attributed to the company's unsuccessful investment resulted from the unadvisable decision.

Specifically speaking, Huaxing Chemical's investment of 20,000t/a glyphosate technical transformation initiated in 2009 with accumulative amount of USD4.3 million (RMB27.7 million) is being delayed in the long term. The construction still stays at the installation stage of main equipments due to the weak glyphosate market. These vain investments even withdraw Huaxing Chemical's performance instead of enhancing company competitiveness. Moreover, Huaxing Chemical might probably encounter the problem of deficit in two consecutive years (2010–2011).

What’s worse, the recent suspended reorganization of Huaxing Chemical puts further stresses on investors. On Nov. 7, 2011, Huaxing Chemical suspended stock trade for laying out company reorganization. The company resumed stock trade on Nov. 11, 2011, and declared not to map out the reorganization in the future three months for it isn't at the proper time.

Coupled with industrial integration in Chinese pesticide, Huaxing Chemical will choose reorganization to boost its performance in an estimate. But it can't be predicted who will be the next cooperator of Huaxing Chemical. It can be sure that investors expect Huaxing Chemical to adjust its management and strategy on the right track. However, in fact, Huaxing Chemical's management team witnessed changes of personnel twice in the past eleven months of 2011.

Headline News of Herbicides China News 1112:

-Jiangsu Lanfeng is favored by investors in Chinese stock market.

-Huaxing Chemical is oppugned by investors due to the weak performance.

-Shenyang Sciencreat doesn't run any capacity constructions about haloxyfop-R-methyl and diflufenican.

-Jiangsu Huifeng removes capital in two IPO projects for stronger overseas business.

-Vertellus launched 10,000t/a 3-cyanopyridine production unit around early Dec. 2011.

-Bifenox meets a weak situation in production and market in China.

-Thaihot Group establishes an organofluorine project to take place of weak pesticide business.

-Fengshan Group runs trial production of 3,000t/a trifluralin technical which belongs to the first stage of the 5,000t/a trifluralin technical transformation.

-Tianrong group's whole relocation will go into the stage of Jiangsu Ruihe and Jiangsu Zhongyi's relocation in a short term.

-Hubei Huida runs plant relocation to meet governmental regulation for safe production.

-Five main herbicides such as glyphosate, paraquat, acetochlor, atrazine and quizalofop-P-ethyl all meet price hike at a slow pace in 2011.

-Glyphosate price keeps relatively stable in 2011.

… …

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_c_931.html

Huaxing Chemical Oppugned

Triggered by an announcement about subsidiary liquidation issued on Nov. 23, 2011, Anhui Huaxing Chemical Industry Co., Ltd. (Huaxing Chemical) encountered a trouble of being blamed and questioned by investors. In detail, Huaxing Chemical is criticized for acting with unadvisable and mutable strategies. Although the criticism seems subjective to some extent, it's observed that Huaxing Chemical has witnessed constantly weak performance indeed these years, according to CCM’s DecemberIssue of Herbicides China News.

Clouded by the shrinkage of company performance in 2009, Huaxing Chemical lost USD20.1 million (RMB127.7 million) in net profit in the whole year of 2010, and witnessed continuously net profit loss of USD4.3 million (RMB27.6 million) in the first three quarters of 2011. As a result, Huaxing Chemical's stock price in the exchange market always appears sluggish and unstable after 2008, and the global stock market is also impacted by some severe social events such as the European Debt Crisis.

As to the responsibility behind such a weak performance, the investors' fire burns toward Huaxing Chemical's operation and management rather than current unfavorable pesticide market. Take this subsidiary liquidation for example, Huaxing Chemical put its subsidiary, Anhui Huaxing Chemical Industry Chongqing Co., Ltd. (Huaxing Chongqing), into liquidation because of current unsuitable situation, according to Huaxing Chemical's explanation in the announcement. But some rumors indicated that the liquidation of Huaxing Chongqing, who runs a 34,000t/a IDAN project (initiated in 2009) valuated at USD5.6 million (RMB35.5 million), is mainly attributed to the company's unsuccessful investment resulted from the unadvisable decision.

As Huaxing Chemical indicated, owing to the depressed glyphosate market, the whole glyphosate production chain is trapped in dilemma at present. Intense competition and overcapacity lead to many suspensions and stops of the relative productions such as IDAN in China.

In Huaxing Chemical's investments, a 20,000t/a glyphosate technical transformation initiated in 2009 with accumulative investment of USD4.3 million (RMB27.7 million) is being delayed in the long term. In detail, the construction still stays at the installation stage of main equipments due to the weak glyphosate market.

These vain investments even withdraw Huaxing Chemical's performance instead of enhancing company competitiveness. Huaxing Chemical will probably encounter the problem of deficit in two consecutive years (2010–2011), implying that the company will meet special treatment in stock market if the loss happens again in 2011.

Although Huaxing Chemical acquired local government's subsidy of USD11.8 million (RMB75 million) in total last month, the reduction of deficit risk can't alleviate investors' worries. What's more, recent suspended reorganization of Huaxing Chemical tenses the investors' nerve further.

According to Huaxing Chemical's bulletin issued on Nov. 11, 2011, Huaxing Chemical resumed stock trade on that day, and declared not to map out the reorganization in the future three months for it isn't at the proper time. On Nov. 7, the company suspended stock trade for laying out company reorganization.

Coupled with industrial integration in Chinese pesticide, Huaxing Chemical will choose reorganization to boost its performance in an estimate. But it can't be predicted who will be the next cooperator of Huaxing Chemical.  It can be sure that investors expect Huaxing Chemical to adjust its management and strategy on the right track. However, in fact, Huaxing Chemical's management team witnessed changes of personnel twice in the past eleven months of 2011.

Source: Herbicides China News 1112

http://www.cnchemicals.com/Newsletter/NewsletterDetail_11.html

Content of Herbicides China News 1112:

Jiangsu Lanfeng favored in weak stock market

Huaxing Chemical oppugned

Shenyang Sciencreat clarified confusion about new constructions

Jiangsu Huifeng pushes overseas business

Vertellus launches 10,000t/a 3-cyanopyridine production

Only two bifenox registrations in China

Thaihot Group: Pesticide production to fluorinated-chemicals business

Fengshan Group runs trifluralin trial production

Acetochlor supply shortage alleviates in Nov.

Lier Chemical's glufosinate-ammonium construction always late

Fire pushes relocation in Shandong Zhongshi

Tianrong group to meet new stage of relocation

Hubei Huida runs plant relocation

Review of five popular herbicide prices in 2011

Glyphosate price in the first eleven months

Herbicides China News, a monthly publication issued by CCM International on 15^th of every month, provides you with the latest occurrences, exclusive analysis on the market trend as well as professional reviews on competitiveness of companies, products and relative industries in China’s herbicide industry.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_904.html