Q1 2020 Earnings Call Transcript

Published:

  • Operator:
    Good morning, ladies and gentlemen, and welcome to the Fuwei Films' First Quarter 2020 Conference Call. All lines have been placed in a listen-only mode, and the floor will be open for questions following the presentation. At this time, it is my pleasure to turn the floor over to Shiwei Yin. Please go ahead.
  • Shiwei Yin:
    Thank you, and welcome. Before we start, I'd like to remind you that certain statements are not of historical facts made during the course of this conference call about future events and projected financial results constitute forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. You should know that the company's actual results may differ materially from those projected in these statements due to a variety of factors affecting the business. Forward-looking statements are subject to risks and uncertainties. A discussion of the factors that may affect future results is contained in our filings with the U.S. Securities and Exchange Commission. We undertake no obligation to correct or update any forward-looking statements provided as a result of new information, future events, or changes in our expectations. Joining us on today's call is Mr. Yong Jiang, Corporate Secretary. Before I walk you through our financial results, Mr. Jiang will deliver his opening remarks. Sir, please go ahead.
  • Yong Jiang:
    [Foreign Language]
  • Shiwei Yin:
    [Interpreted] Thank you for joining us today. Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant adverse effects on the world economy, we achieved positive trends in overall sales, especially sales of specialty films which accounted for 47.9% of our total revenues. In addition, we achieved net profit for four consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded 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. Net sales during the first quarter were RMB83.2 million, (US$11.8 million), compared to RMB81.1 million, during the same period in 2019, representing an increase of RMB2.1 million or 2.6%, mainly due to increased sales price. In the first quarter of 2020, sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues as compared to RMB32.2 million or 39.7% in the same period of 2019. The increase was mainly due to increased sales volume. [Technical difficulty] RMB5.8 million (US$0.8 million), or 6.9% of total revenues, compared with RMB16.2 million or 20.0% of total revenues in the first quarter of 2019, representing a decrease of RMB10.4 million or 64.2%. The decrease was mainly due to decreased sales volume. Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter, representing a gross margin of 35.8%, as compared to a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019. Our average product sales prices increased by 5.4%, while our average cost of goods sold decreased by 20% compared to the same period in 2019. Consequently, our gross profit and gross margin was higher during the period. [Technical difficulty] first quarter were RMB15.0 million (US$2.1 million), which was RMB1.5 million, or 11.1% higher than the same period in 2019. This increase was mainly due to the increased accrued allowance for doubtful accounts receivable and increased transportation expenses. [Technical difficulty] to the company during the first quarter was RMB13.0 million (US$1.8 million) compared to net loss attributable to the company of RMB3.4 million during the same period in 2019. [Technical difficulty] net earnings per share was RMB3.97 (US$0.56) for the three-month period ended March 31, 2020, while basic and diluted net loss per share was RMB1.03 for the three-month period ended March 31, 2019. [Technical difficulty] was RMB221.1 million or US$31.2 million as of March 31, 2020, compared with RMB208.2 million as of December 31, 2019. [Technical difficulty] 2020, the company had 3,265,837 basic and diluted ordinary shares outstanding. Cash and cash equivalents on March 31, 2020 was RMB55.7 million or US$7.9 million compared with RMB60.9 million as of December 31. I would like to thank our shareholders for their continued loyalty and support, we believe we are well-positioned to face the current challenges and are committed to providing value to our shareholders and customers. We'll keep you informed of our progress. With that, Mr. Jiang will be happy to answer your questions. Christi, let's begin the Q&A.
  • Operator:
    And I am showing no questions from the audience at this time. So I will turn it back over for any closing remarks.
  • Shiwei Yin:
    [Technical difficulty] today's conference call. We look forward to being in touch with you and we'll keep you updated about our progress.
  • Operator:
    And that does conclude today's conference call. Thank you for attending. You may disconnect your lines at this time, and have a great day.

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