HaiKe Chemical Group expects profit to be 'considerably' ahead of previous year

23rd Jan 2017 08:59

(ShareCast News) - Shares soared in HaiKe Chemical Group as the Chinese firm announced that it expects profit to be "considerably" ahead of the previous year, largely driven by a positive performance in the second half of 2016, while it has also a new chief financial officer. The AIM-listed chemical company expects profit for the 2016 calendar year will a be "considerably" ahead of the previous year, largely due to a positive operational performance in the second half of the year driven by a focus on higher margin chemical products, product innovation and cost controls.The Shandong Province-based company appointed Jes Cui as chief finical officer, effective from 1 February and he will join the board in due course. Cui was previously executive vice president of ENN Group and president of ENN Solar Energy Group. He was also chief financial officer and then chief executive officer of Siemens Industrial Turbo machinery (Huludao).Meanwhile, revenue slipped 0.21% to ¥725.9m from the previous year, which resulted in a surge in profit to ¥18.1m from ¥4.1m.The gross margin increased to 15.8% from 11.6% as the company adjusted its product mix. Sales of more profitable, high-end products accounted for 8.1% of sales, up from 3%.Overall sales volumes were largely flat at 125,395 tonnes, while the average selling prices fell 1.8% to ¥5,529 per tonnes.Expenses rose 16.7% to ¥40.5m, due to more aggressive sales and marketing activities in restrained market conditions, and general and administrative expenses increased 22.2% to ¥50.3m. This was due to increases in labour and research and development expenses of 15.9% and 35.6%, respectively.Whereas, interest expenses dropped 80% ¥3.9m following the repayment of bank loans during 2015. Total borrowings at the end of 2016 were unchanged at ¥80m. It had ¥57.2m in cash, down 22%.Shares in HaiKe Chemical Group were up 24% to 15.50p at 1118 GMT.