Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2022

BEIJING, Sept. 30, 2022 /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 second quarter of 2022 ended June 30, 2022. 

Second quarter highlights

  • Net sales were RMB88.7 million (US$13.2 million)
  • Sales of specialty films were RMB64.9 million (US$9.7 million), or 73.1% of total revenues
  • Gross profit was RMB24.9 million (US$3.7 million), representing a gross profit margin of 28.1%
  • Net profit attributable to the Company was RMB13.7 million (US$2.0 million)

 

First Six Months 2022 Financial Highlights

  • Net sales were RMB191.9 million (US$28.6 million)
  • Sales of specialty films totaled RMB136.8 million (US$20.4 million), or 71.3% of total revenues
  • Overseas sales were RMB19.6 million (US$2.9 million), equivalent to 10.2% of total revenues
  • Our gross profit was RMB55.1 million (US$8.2 million), representing a gross profit margin of 28.7%
  • Net income attributable to the Company amounted to RMB30.8 million (US$4.6 million)

 

Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "We saw positive overall sales trends, particularly in specialty films, such as a base film for dry film, which accounted for 73.1% of total revenue. The increase in base film sales demonstrates that our customers value the high quality of our products, and we believe it has helped the company's financial performance. At Fuwei Films, we prioritize innovation and utilize a distinct marketing approach while expanding future end-user markets for our film goods. Through these efforts, we anticipate that the Company will continue capitalizing on new opportunities despite difficult market and economic conditions."

Second Quarter 2022 Results

Net sales during the second quarter ended June 30, 2022, were RMB88.7 million (US$13.2 million), compared to RMB100.6 million during the same period in 2021, representing a year-over-year decrease of RMB11.9 million, or 11.8% on an annual base. The average sales price decline contributed to a RMB3.6 million year-over-year decrease while lower sales volume represented a decline of RMB8.3 million.

Sales of specialty films in the second quarter of 2022  were RMB64.9 million (US$9.7 million), or 73.1% of total revenues, compared to RMB69.0 million, or 68.6% in the same period of 2021, representing a decrease of RMB4.1 million, or 5.9%. The decline in sales volume resulted in a reduction of RMB2.0 million, while a lower average sales price caused a decrease of RMB2.1 million.

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


Three-Month Period
Ended
 June 30, 2022

% of Total


Three-Month Period
Ended
June 30, 2021

% of Total


RMB

US$



RMB


Stamping and
transferring film

15,594

2,328

17.6 %


21,762

21.6 %

Printing film

4,626

691

5.2 %


5,232

5.2 %

Metallization film

161

24

0.2 %


1,090

1.1 %

Specialty film

64,864

9,684

73.1 %


68,979

68.6 %

Base film for other applications

3,489

521

3.9 %


3,519

3.5 %









88,734

13,248

100.0 %


100,582

100.0 %

 

Overseas sales totaled RMB9.4 million, or US$1.4 million, equivalent to10.6% of total revenues, compared with RMB13.4 million, or 13.3% of total revenues in the second quarter of 2021. Higher average sales price represented an increase of RMB0.6 million, while the sales volume decline resulted in a decrease of RMB4.6 million.

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


Three-Month Period
Ended
 June 30, 2022

% of Total

Three-Month Period
Ended
June 30, 2021

% of Total


RMB

US$

RMB

Sales in China

79,330

11,844

89.4 %

87,205

86.7 %

Sales in other countries

9,404

1,404

10.6 %

13,377

13.3 %








88,734

13,248

100.0 %

100,582

100.0 %

 

Gross profit was RMB24.9 million (US$3.7 million) for the second quarter ended June 30, 2022, representing a gross profit margin of 28.1%, compared to a gross profit margin of 39.6% for the same period in 2021.

Operating expenses for the second quarter ended June 30, 2022, amounted to RMB14.1 million (US$2.1 million) compared to RMB14.0 million in the same 2021 period.

Net profit attributable to the Company during the second quarter ended June 30, 2022, totaled RMB13.7 million (US$2.0 million), while net profit attributable to the Company was RMB19.8 million during the same period in 2021.

Basic and diluted net profit per share was RMB4.20 (US$0.63) and RMB6.06 for the three-month period ended June 30, 2022, and 2021, respectively.

Total shareholders' equity was RMB347.8 million, or US$51.9 million, as of June 30, 2022, compared with RMB317.0 million as of December 31, 2021.  

As of June 30, 2022, the Company had 3,265,837 basic and diluted ordinary shares outstanding.

Financial Results for the Six Months Ended June 30, 2022

Net sales during the six-month period ended June 30, 2022, were RMB191.9 million (US$28.6 million), compared to RMB202.2 million in the same period in 2021, representing a 5.1% decrease, or RMB10.3 million. The average sales price decline represented a decrease of RMB3.7 million, while lower sales volume resulted in a decrease of RMB6.6 million.

In the six-month period ended June 30, 2022, sales of specialty films totaled RMB136.8 million (US$20.4 million), or 71.3% of our total revenues, compared to RMB133.9 million, or 66.2% in the same period of 2021. Specialty films sales rose RMB2.9 million, or 2.2%, compared to the same period in 2021. The increase in sales volume amounted to RMB4.9 million, while lower average sales price caused a decrease of RMB2.0 million.

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


Six-Month Period
Ended
 June 30, 2022

% of Total


Six-Month Period
Ended
June 30, 2021

% of Total


RMB

US$



RMB


Stamping and
transferring film

37,705

5,630

19.7 %


47,113

23.3 %

Printing film

9,103

1,359

4.7 %


10,714

5.3 %

Metallization film

1,582

236

0.8 %


2,733

1.4 %

Specialty film

136,811

20,425

71.3 %


133,941

66.2 %

Base film for other
applications

6,666

995

3.5 %


7,705

3.8 %









191,867

28,645

100.0 %


202,206

100.0 %

 

Overseas sales during the six months ended June 30, 2022, were RMB19.6 million, or US$2.9 million, equivalent to 10.2% of total revenues, compared with RMB22.4 million, or 11.1% of total revenues in the same period in 2021. Overseas sales declined RMB2.8 million from the same 2021 period. Lower sales volume explained the RMB4.2 million decrease, while a higher average sales price contributed to an increase of RMB1.4 million.

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



Six-Month Period
Ended
 June 30, 2022

% of Total

Six-Month Period
Ended
June 30, 2021

% of Total



RMB

US$

RMB

Sales in China


172,252

25,717

89.8 %

179,801

88.9 %

Sales in other
countries


19,615

2,928

10.2 %

22,405

11.1 %










191,867

28,645

100.0 %

202,206

100.0 %

 

Our gross profit totaled RMB55.1 million (US$8.2 million) for the first six months ended June 30, 2022, representing a gross margin of 28.7%, compared to a gross margin of 40.7% for the same period in 2021, a 12% decrease in the period. Our average product sales prices fell 1.9% from the same period last year, while the average cost of goods sold rose 18.0% compared to last year, resulting in a decrease in our gross margin.

Operating expenses for the six months ended June 30, 2022, were RMB27.8 million (US$4.2 million), compared to RMB24.4 million in the same period in 2021, equal to RMB3.4 million, or 13.9% higher than the same period in 2021. This increase was mainly explained by higher expenses on R&D and welfare.

Net income attributable to the Company during the first half of 2022 was RMB30.8 million (US$4.6 million) compared to net income attributable to the Company of RMB51.2 million during the same period in 2021, a RMB20.4 million decrease from the same period in 2021 explained by the factors described above.

Cash, cash equivalent and restricted cash totaled RMB265.2million (US$39.6 million) as of June 30, 2022. Total shareholders' equity was RMB347.8 million (US$51.9 million).

As of June 30, 2022, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.

About Fuwei Films

Fuwei Films conducts its business through its wholly-owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei 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 for packaging 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 is 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 negative impacts of the determination of the U.S. Securities and Exchange Commission that the Public Company Accounting Oversight Board ("PCAOB") is currently unable to inspect our auditor in relation to their audit work and the potential that our ordinary shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act ("HFCAA") in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China, or 2023 if proposed changes to the law are enacted, 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, potential delisting of our ordinary shares under the Holding Foreign Company Affordable Act if the US Public Company Accounting Oversight Board is unable to inspect our auditors located in China, 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 the information contained in the forward-looking statements as a result of the risk factors.

For more information, please contact:

In China:

Ms. Xiaoli Yu
Investor Relations Officer
 Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:

Lucia Domville
Investor Relations
Grayling
Phone: +1-646-824-2856
Email: lucia.domville@grayling.com

 Financial Tables to Follow

 

 

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2022, AND DECEMBER 31, 2021

(amounts in thousands except share and per share value)

(Unaudited)




June 30, 2022


December 31, 2021


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


245,728

36,686


250,608

Restricted cash


19,500

2,911


28,294

Accounts and bills receivable, net


25,337

3,783


29,225

Inventories


47,030

7,021


35,456

Advance to suppliers


17,645

2,634


7,933

Prepayments and other receivables


2,266

338


1,199

Deferred tax assets - current


1,152

172


1,144

Total current assets


358,658

53,545


353,859







Property, plant and equipment, net


101,712

15,185


106,928

Construction in progress


6,253

934


-

Lease prepayments, net


14,418

2,153


14,685

Deferred tax assets – non-current


156

23


227







Total assets


481,197

71,840


475,699








Current liabilities






Short-term borrowings


65,000

9,704


65,000

Accounts payables


22,368

3,339


22,616

Notes payable


37,470

5,594


50,126

Advance from customers


1,343

201


7,672


5,429

811


11,479

Total current liabilities


131,610

19,649


156,893







Deferred tax liabilities


1,756

262


1,789







Total liabilities


133,366

19,911


158,682







Equity






Shareholders' equity






Registered capital (of US$0.519008 par value; 135,000,000
shares authorized; 3,265,837 issued and outstanding)


13,323

1,989


13,323

Additional paid-in capital


311,907

46,566


311,907

Statutory reserve


37,441

5,590


37,441

Retained earnings


(15,680)

(2,341)


(46,494)

Cumulative translation adjustment


840

125


840

Total shareholders' equity


347,831

51,929


317,017

Total equity


347,831

51,929


317,017

Total liabilities and equity


481,197

71,840


475,699

 

 

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021

(amounts in thousands except share and per share value)

(Unaudited)




The Three-Month Period Ended June 30,


The Six-Month Period Ended June 30, 



2022


2021


2022


2021


RMB

US$


RMB


RMB

US$


RMB

Net sales


88,734

13,248


100,582


191,867

28,645


202,206

Cost of sales


63,832

9,530


60,728


136,795

20,423


119,902












Gross profit


24,902

3,718


39,854


55,072

8,222


82,304












Operating expenses











Selling expenses


5,237

782


4,944


10,378

1,549


9,058

Administrative
expenses


8,856

1,322


9,014


17,431

2,602


15,369

Total operating
expenses


14,093

2,104


13,958


27,809

4,151


24,427












Operating income 


10,809

1,614


25,896


27,263

4,071


57,877












Other income (expense)











- Interest income


2,016

301


1,368


3,877

579


2,225

- Interest expense


(1,080)

(161)


(1,378)


(2,138)

(319)


(2,953)

- Other incomes
(expense), net


1,973

295


(344)


1,842

275


(222)

Total other income
(expense)


2,909

435


(354)


3,581

535


(950)












Income before
provision for income
taxes


13,718

2,049


25,542


30,844

4,606


56,927

Income tax expense


(12)

(2)


(5,736)


(30)

(4)


(5,755)












Net income


13,706

2,047


19,806


30,814

4,602


51,172












Net income (loss)
attributable to
non-controlling
interests


-

-


-


-

-


-

Net income (loss)
attributable to the
Company


13,706

2,047


19,806


30,814

4,602


51,172

Other comprehensive
income (loss)











- 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
attributable to the
Company


13,706

2,047


19,806


30,814

4,602


51,172












Earnings per share,
Basic and diluted


4.20

0.63


6.06


9.44

1.41


15.67

Weighted average
number of ordinary
shares,
Basic and diluted


3,265,837

3,265,837


3,265,837


3,265,837

3,265,837


3,265,837













 

 

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022, AND 2021

(amounts in thousands except share and per share value)

(Unaudited)




The Six-Month Period Ended June 30, 



2022


2021



RMB

US$


RMB

Cash flow from operating activities






Net income


30,814

4,602


51,172

Adjustments to reconcile net loss to net cash






used in operating activities












- Depreciation of property, plant and equipment


6,646

992


6,109

- Amortization of intangible assets


267

40


266

- Deferred income taxes


30

4


5,755

- Bad debt recovery


53

8


338

-Inventory provision


-

-


(497)

Changes in operating assets and liabilities 






- Accounts and bills receivable


3,836

573


(12,667)

- Inventories


(11,575)

(1,728)


1,456

- Advance to suppliers


(9,712)

(1,450)


(2,102)

- Prepaid expenses and other current assets


(1,067)

(159)


(52)

- Accounts payable


(248)

(37)


(3,967)

- Accrued expenses and other payables


(5,976)

(893)


(21,118)

- Advance from customers


(6,328)

(945)


(6,389)

- Tax payable


(76)

(11)


1,682







Net cash provided by (used in) operating activities


6,664

996


19,986







Cash flow from investing activities






Purchases of property, plant and equipment


(1,429)

(213)


(730)

Proceeds from sale of property, plant and equipment


-

-


122,919

Advanced to suppliers - non-current


-

-


1,542

Amount change in construction in progress


(6,253)

(934)


-







Net cash provided by (used in) investing activities


(7,682)

(1,147)


123,731







Cash flow from financing activities






Principal payments of bank loans


-

-


-

Proceeds from (payment to) short-term bank loans


-

-


-

Proceeds from (payment to) related party


-

-


(73,571)

Change in notes payable


(12,656)

(1,889)


(15,000)













Net cash (used in) provided by financing activities


(12,656)

(1,889)


(88,571)







Effect of foreign exchange rate changes


-

(2,129)


-







Net increase in cash and cash equivalent


(13,674)

(4,169)


55,146







Cash and cash equivalent






At beginning of the period


278,902

43,766


120,923

At end of the period


265,228

39,597


176,069







SUPPLEMENTARY DISCLOSURE:






Interest paid


2,138

319


2,953







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


1,010

151


1,010

 

 

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Source: Fuwei Films Related Stocks: NASDAQ:FFHL
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