26 August - Xiwang Sugar Holdings has announced its interim results for 2008.
Highlights
�� Turnover +58% yoy
�� Strong volume growth and higher price of crystallised glucose and co-products, driven by underlying strong demand
�� About 50% yoy increase in export sales
�� Gross profit margin -2% pts yoy
�� Impacted by rising corn cost
�� Upward adjustment of product prices to mitigate the impact
�� Net profit +44% yoy
�� Higher utilisation rate of crystallised glucose plant: 1H08 4 approx. 75% in vs. approx. 50% in 1H07
�� An exchange gain of RMB 51million from revaluation of USDdenominated borrowings, thanks to approx. 6% appreciation of RMB against USD
Operation ReviewSweetener Products:�� Crystallised glucose: Both ASP and volume grew for wider applications and more volume output to fulfill market needs, but GP margin squeezed due to higher corn cost
�� Crystallised fructose: successful trial production and pre-marketing Co-products:
�� Strong volume and ASP for corn gluten meal and animal feed, due to recovery of animal feed market and strong consumption from both domestic and oversea
�� Sharp rise in corn germ price and volume, largely driven by increasing demand for corn and corn oil
�� Strong price increment to minimise cost impact
Business Updates�� Weak cane sugar price continues in short term because of over-supply, but expected to recover in 2009
�� Corn price reached plateau since March, resulted from the Chinese Government’s firm regulation to control industrial demand. Coming harvest expected to be fruitful so corn price would move in gentle pace
�� Demand for crystallised glucose continues to be strong
�� Rapid economic growth and rising living standard
�� Growing industrial applications
�� Growth momentum of co-products sustains
�� Strong growth of export sales
Future Development Strategies�� Solidify the leadership position in crystallised glucose
• Continual improvement of product quality
• Provision of comprehensive customer services
�� Develop further downstream, high-value sweetener and food products
• First domestic player of crystallised fructose, the new plant with annual production capacity of 50,000 tonnes will commence by late 2008
• In July, signed a MOU of possible acquisition of ‘Xiwang Food’ which engaged in corn oil business, expected to complete within six months
�� Enhance operational efficiency and commit to total environmental-safe production
• Feasibility study of turning the residuals to a series of chemicals including ethanol, acetone and butanol, to cope with the enlarged 18 production capacity