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Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2021

FFHL

BEIJING, June 24, 2021 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. (NASDAQ:FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the first quarter of 2021 ended March 31, 2021.

First quarter highlights

  • Net sales were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%.
  • Sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020.
  • Gross profit was RMB42.5 million (US$6.5 million), representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020.
  • Net profit attributable to the Company was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million a year ago.

Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "Despite the oversupply in the marketplace and the ongoing coronavirus pandemic, we achieved positive trends in overall sales, especially sales of specialty films, including base film for dry film, which accounted for 63.9% of our total revenues. Base film is a high value-added and differentiated product, which is used to produce dry film that is used in printed circuit boards. The sales increase of base film for dry film demonstrates that the quality of our products is well recognized by our customers. We believe that the order growth also helps improve the Company's financial performance. For the future, we remain committed to innovation and differentiated marketing strategy and expanding 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."

First Quarter 2021 Results

Net sales during the first quarter ended March 31, 2021 were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%, mainly due to increased sales volume. The increase of sales volume led to an increase of RMB12.2 million, and the increase of sales price resulted in the increase of RMB6.2 million.

In the first quarter of 2021, sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020. The increase was mainly due to increased sales volume.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):



Three-Month Period

Ended

March 31, 2021

% of

 Total

Three-Month Period

Ended

March 31, 2020

% of 

Total



RMB

US$



RMB



Stamping and transfer film

25,350

3,869

25.0%

34,522

41.5%

Printing film

5,482

837

5.4%

5,845

7.0%

Metallization film

1,643

251

1.6%

1,501

1.8%

Specialty film

64,963

9,915

63.9%

39,877

47.9%

Base film for other

application

4,186

639

4.1%

1,488

1.8%















101,624

15,511

100.0%

83,233

100.0%

Overseas sales were RMB9.0 million or US$1.4 million, or 8.9% of total revenues, compared with RMB5.8 million or 6.9% of total revenues in the first quarter of 2020, representing an increase of RMB3.2 million or 55.2%. The increase was mainly due to increased sales volume. 

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):





Three-Month Period

Ended

March 31, 2021

% of 

Total

Three-Month Period

Ended

March 31, 2020

% of 

Total





RMB

US$



RMB



Sales in China



92,596

14,133

91.1%

77,448

93.1%

Sales in other countries



9,028

1,378

8.9%

5,785

6.9%



















101,624

15,511

100.0%

83,233

100.0%

Gross profit was RMB42.5 million (US$6.5 million) for the first quarter ended March 31, 2021, representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020. Average product sales prices increased by 6.5% while average cost of goods sold decreased by 3.5% compared to the same period in 2020. Consequently, the increase in average product sales prices and the decrease in the average cost of goods sold during the first quarter ended March 31, 2021 contributed to the increase in gross profit and gross margin during the period.

Operating expenses for the first quarter ended March 31, 2021 were RMB10.5 million (US$1.6 million), which was RMB4.5 million, or 30.0% lower than the same period in 2020. This decrease was mainly due to the decreased depreciation on the Dornier Production Line and the trial production line as assets of these two production lines were classified as assets as held for sale.

Net profit attributable to the Company during the first quarter ended March 31, 2021 was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million during the same period in 2020.

Basic and diluted net benefit per share was RMB9.60 (US$1.47) and RMB3.97 for the three-month period ended March 31, 2021 and 2020, respectively.

Total shareholders' equity was RMB259.2 million or US$39.6 million as of March 31, 2021, compared with RMB227.8 million as of December 31, 2020.

As of March 31, 2021, the Company had 3,265,837 basic and diluted ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, June 25, 2021, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 41764.

About Fuwei Films

Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.

Safe Harbor

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the uncertainty of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.

 

Financial Tables to Follow

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2021 AND DECEMBER 31, 2020

(amounts in thousands except share and per share value)

(Unaudited)







March 31, 2021



December 31, 2020



RMB

US$



RMB

ASSETS

Current assets











Cash and cash equivalents



218,279

33,316



113,423

Restricted cash



12,500

1,908



7,500

Accounts and bills receivable, net



45,329

6,919



32,393

Inventories



22,227

3,393



25,436

Advance to suppliers



12,408

1,894



7,359

Prepayments and other receivables



1,172

179



1,103

Assets held for sale



122,919

18,761



122,919

Deferred tax assets - current



6,947

1,060



6,947

Total current assets



441,781

67,430



317,080













Plant, properties and equipment, net



108,879

16,618



111,308

Lease prepayments, net



15,085

2,302



15,219

Advance to suppliers - long term, net



926

141



1,542

Deferred tax assets - non current



472

72



507













Total assets



567,143

86,563



445,656













LIABILITIES AND EQUITY

Current liabilities











Short-term borrowings



65,000

9,921



65,000

Due to related parties



50,519

7,711



73,571

Accounts payables



20,187

3,081



25,730

Notes payable



25,000

3,816



15,000

Advance from customers



139,112

21,233



9,297

Accrued expenses and other payables

6,318

964



27,400

Total current liabilities



306,136

46,726



215,998













Deferred tax liabilities



1,838

281



1,854













Total liabilities



307,974

47,007



217,852













Equity











Shareholders' equity











Registered capital (of US$0.519008 par value;

5,000,000 shares authorized; 3,265,837 issued and

outstanding)



13,323

2,033



13,323

Additional paid-in capital



311,907

47,606



311,907

Statutory reserve



37,441

5,715



37,441

Accumulated deficit



(104,342)

(15,926)



(135,707)

Cumulative translation adjustment



840

128



840

Total shareholders' equity



259,169

39,556



227,804

Total equity



259,169

39,556



227,804

Total liabilities and equity



567,143

86,563



445,656

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020

(amounts in thousands except share and per share value)

(Unaudited)







The Three-Month Period Ended March 31, 





2021



2020



RMB

US$



RMB

Net sales



101,624

15,511



83,233

Cost of sales



59,174

9,032



53,474













Gross Profit



42,450

6,479



29,759













Operating expenses











Selling expenses



4,114

628



4,086

Administrative expenses



6,355

970



10,955

Total operating expenses



10,469

1,598



15,041













Operating income



31,981

4,881



14,718













Other income (expense)











- Interest income



856

131



289

- Interest expense



(1,575)

(240)



(2,216)

- Others income (expense),net



122

19



69













Total other expense



(597)

(90)



(1,858)













Income (loss) before provision for income taxes



31,384

4,791



12,860













Income tax benefit (expense)



(19)

(3)



94













Net income



31,365

4,788



12,954













Net loss attributable to non-controlling interests



-

-



-

Net income attributable to the Company



31,365

4,788



12,954













Other comprehensive income











- Foreign currency translation adjustments attributable to

non-controlling interest



-

-



-

- Foreign currency translation adjustments attributable to the

Company



-

-



-













Comprehensive loss attributable to non-controlling interest



-

-



-

Comprehensive income (loss) attributable to the Company



31,365

4,788



12,954













Earnings per share,

Basic and diluted



9.60

1.47



3.97

Weighted average number ordinary shares,

Basic and diluted 



3,265,837

3,265,837



3,265,837

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020

(amounts in thousands except share and per share value)

(Unaudited)







The Three-Month Period Ended March 31, 





2021



2020





RMB

US$



RMB

Cash flow from operating activities











Net income



31,365

4,788



12,954

Adjustments to reconcile net loss to net cash











used in operating activities











- Depreciation of property, plant and equipment



3,162

483



6,847

- Amortization of intangible assets



134

20



134

- Deferred income taxes



19

3



(94)

- Bad debt expense



(2)

-



447

-Inventory provision



-

-



-

Changes in operating assets and liabilities 











- Accounts and bills receivable



(12,934)

(1,974)



(14,984)

- Inventories



3,209

490



(679)

- Advance to suppliers



(5,049)

(771)



(6,171)

- Prepaid expenses and other current assets



(69)

(11)



(73)

- Accounts payable



(5,542)

(846)



1,285

- Accrued expenses and other payables



(21,259)

(3,246)



-

- Advance from customers



11,607

1,772



(3,540)

- Tax payable



177

27



1,590













Net cash provided by operating activities



4,818

735



(2,284)













Cash flow from investing activities











Purchases of property, plant and equipment



(734)

(112)



(364)

Restricted cash related to trade finance



-

-



-

Advanced to suppliers - non current



616

94



-

Proceeds from sale of property, plant and equipment



118,208

18,042



-













Net cash provided by investing activities



118,090

18,024



(364)













Cash flow from financing activities











Proceeds from related party



(23,052)

(3,518)



1,148

Payment of capital lease obligation



-

-



-

Change in notes payable



10,000

1,526



(14,200)













Net cash used in financing activities



(13,052)

(1,992)



(13,052)













Effect of foreign exchange rate changes



-

(75)



-













Net decrease in cash and cash equivalent



109,856

16,692



(15,700)













Cash and cash equivalent











At beginning of period/year



120,923

18,532



86,371

At end of period/year



230,779

35,224



70,671













SUPPLEMENTARY DISCLOSURE:











Interest paid



1,575

240



2,216

Income tax paid



-

-



-













SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:



1,010

154



1,010













 

 

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SOURCE Fuwei Films (Holdings) Co., Ltd.