Yizheng hits record low as costs go up

Yizheng Chemical Fibre Co shares plunged to a record low yesterday amid concerns over rising raw material costs and falling product prices.

The counter tumbled 8.6 per cent to $1.39, down about 28 per cent from $1.95 at the start of the year and 41 per cent below its issue price of $2.38. The H-share company was listed in March 1994.

The company, the world's fourth-largest polyester producer, will announce its results for last year on Friday.

The 35 brokerages surveyed in the March edition of The Estimate Directory predicted a 58 per cent fall in Yizheng's net profit for last year to 474 million yuan (about HK$440 million).

Yizheng said raw material costs rose for the fourth quarter in succession.

It said the international price for PTA - used to make polyester - edged up 4 per cent to $650 a tonne for the second quarter. The first quarter already saw an increase of 2.5 per cent.

The cost of MEG - another key raw material for making polyester - rose 7.1 per cent to $600 a tonne in the second quarter after a 5.7 per cent increase in the first quarter.