Jiutian Chemical back in black with Q4 earnings of 86.2m yuan

JIUTIAN Chemical Group has posted net earnings of 86.2 million yuan (S$17.6 million) for the fourth quarter to December versus a net loss of 237.6 million a year ago, and also achieved record-high earnings of 173.7 million yuan for the full year since listing in 2006.

Despite its stellar results, the Catalist-listed firm said in a statement that it is not profitable at the firm level and thus is not in a position to recommend a dividend.

However, its Chinese unit has apparently provided for profits to be repatriated to the listco with a 3.1 million yuan increase in non-current liabilities, largely due to setting aside of deferred withholding tax liabilities.

The chemical producer's revenue for the quarter rose 89 per cent year on year to 403.5 million yuan, from 213 million yuan a year ago. Its revenue was 9 per cent higher at 1.15 billion yuan, from 1.05 billion yuan.

Jiutian Chemical saw a stronger demand for its dimethylformamide and methylamine, and the permanent closure of the second-largest competitor as key factors contributing to its better performance in what its chairman described as an extraordinary year.

A decline in raw material price partially helped to improve the producer's gross profit margin to 24 per cent for the year, from 7 per cent a year ago.

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Reversal of impairment loss of property, plant and equipment arising from the significant improvement in financial performance of its plant helped boost other income by 26.81 million yuan.

Earnings per share for the fourth quarter stood at 4.66 fen, compared to a loss per share of 13.07 fen. Net asset value per share as at end-December 2020 was 26.29 fen, up from 16.55 fen a year ago.

Jiutian Chemical is in the process of finalising a plan to build a new 100,000 tonne methylamine plant adjacent to its current 120,000 tonne methylamine/dimethylformamide facility to meet the rising demand for methylamine from sectors including electric-vehicle batteries, semiconductor, pharmaceuticals and animal feeds.

UOB Kay Hian has a "buy" recommendation for the counter in a report on Wednesday, with a target price of 12.8 Singapore cents as it cited dividend payment as one of the share price catalysts.

The counter shed 1.1 Singapore cents to S$0.096 when market closed on Wednesday.