Kingboard Chemical’s half-time profit soars 84pc

Laminates manufacturer delivers interim profit of HK$1.6 billion, as revenue jumps 11pc to HK$18.3 billion.

PUBLISHED : Monday, 15 August, 2016, 11:15pm
UPDATED : Monday, 15 August, 2016, 11:15pm

Laminates manufacturer Kingboard Chemical Holdings has reported an 84 per cent surge in underlying net profit for the first half of the year.

Kingboard, which produces laminates, printed-circuit boards and chemical products, posted an underlying profit of HK$1.6 billion for the period, compared with HK$881.1 million a year earlier. Revenue jumped 11 per cent to HK$18.3 billion.

In prepared statements, chairman Paul Cheung Kwok-wing attributed the company’s strong performance to a “market advantage built firmly on a vertically integrated production platform and a diversified business portfolio”.

Profit margins for Kingboard increased largely due to the improved demand-supply dynamics in the laminates market, which saw a 3 per cent gain in monthly shipments to an average of 10 million square metres.

The company expects demand for its electronics products to remain solid.

It said it planned to boost the production of thin, halogen-free and LED-related laminates as it sought to expand its market share and strengthen its leading position in the industry.

Kingboard also said it would continue to optimise its existing production lines to tap into the high-end printed-circuit board market and meet the increasing orders from the consumer electronics and vehicle sectors.

While the company acknowledged that increases in the selling prices of its chemical products had remained slow due to low petroleum prices and a slowdown in China’s domestic demand, it said profit margins improved following industry consolidation and a reduction in excess capacity.

Turnover for the division dropped 20 per cent year on year to HK$4.7 billion while earnings before interest, tax, amortisation and depreciation dipped 7 per cent to HK$504 million.

Kingboard’s property division saw contracted sales of HK$6.3 billion during the first half, an eightfold increase from a year earlier, while segment turnover grew 2.2 times to HK$4.7 billion, boosted by the booking of sales and rental income from its residential projects in Huaqiao, Zhangpu and the Kunshan development zone.

The company said its major commercial project, Shanghai Kingboard Plaza Phase 1, was due to be completed during the second half of the year and would contribute significantly to its rental income.

Shares in Kingboard rose 2.19 per cent on Monday to close at HK$16.82. The stock has climbed 33 per cent over the past 12 months.

An interim dividend of 30 HK cents per share was declared, up from 20 HK cents a year earlier.