Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2022
daitranvan 25-06-2022, 03:15

BEIJING, June 25, 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 first quarter of 2022 ended March 31, 2022. 

First quarter highlights

  • Net sales were RMB103.1 million (US$16.3 million), compared to RMB101.6 million, during the same period in 2021, representing an increase of RMB1.5 million, or 1.5% year-over-year
  • Sales of specialty films were RMB71.9 million (US$11.3 million), equivalent to 69.8% of our total revenues as compared to RMB65.0 million or 63.9% in the same period of 2021
  • Gross profit was RMB30.2 million (US$4.8 million), representing a gross margin of 29.3%
  • Net income attributable to the Company was RMB17.1 million (US$2.7 million)

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 a base film for dry film, which accounted for 69.8% of our total revenues. The base film is a high value-added and differentiated product, which is used to produce dry films that are applied to printed circuit boards. The sales increase of base film for dry films demonstrates that our customers well-recognize the quality of our products. We believe the order growth also helps improve the Company's financial performance. For the future, we remain committed to innovation and differentiated marketing strategy while expanding the end-user applications of our film products. We will continue these efforts and expect them to enable the Company to capitalize on new opportunities despite challenging industry and economic conditions." 

First Quarter 2022 Results

Net sales during the first quarter ended March 31, 2022, were RMB103.1 million (US$16.3 million), compared to RMB101.6 million, during the same period in 2021, representing an increase of RMB1.5 million, or 1.5% on an annual base. The increase in sales volume accounted for an increase of RMB1.4 million, and a higher sales price resulted in a RMB0.1 million increase.

In the first quarter of 2022, sales of specialty films were RMB71.9 million (US$11.3 million), equivalent to 69.8% of our total revenues compared to RMB65.0 million or 63.9% in the same period of 2021. The increase was mainly due to higher sales volume.

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


Three-Month Period
Ended
March 31, 2022

% of Total

Three-Month Period
Ended
March 31, 2021

% of Total


RMB

US$


RMB


Stamping and transfer film

22,110

3,489

21.4 %

25,350

25.0 %

Printing film

4,477

706

4.3 %

5,482

5.4 %

Metallization film

1,421

224

1.4 %

1,643

1.6 %

Specialty film

71,947

11,349

69.8 %

64,963

63.9 %

Base film for other
applications

3,178

501

3.1 %

4,186

4.1 %








103,133

16,269

100.0 %

101,624

100.0 %

 

Overseas sales were RMB10.2 million or US$1.6 million, representing 9.9% of total revenues, compared with RMB9.0 million or 8.9% of total revenues in the first quarter of 2021, an increase of RMB1.2 million or 13.3%. The growth in sales volume accounted for an increase of RMB0.3 million, while a higher sales price resulted in an increase of RMB0.9 million.

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



Three-Month Period
Ended
March 31, 2022

% of Total

Three-Month Period
Ended
March 31, 2021

% of Total



RMB

US$

RMB

Sales in China


92,922

14,658

90.1 %

92,596

91.1 %

Sales in other countries


10,211

1,611

9.9 %

9,028

8.9 %










103,133

16,269

100.0 %

101,624

100.0 %

 

Our gross profit was RMB30.2 million (US$4.8 million) for the first quarter ended March 31, 2022, representing a gross margin of 29.3%, compared to a gross profit of RMB42.5 million and gross margin of 41.8% for the same period of 2021. The increase in the average cost of goods sold during the first quarter ended March 31, 2022, explained the decrease in our gross profit during the period. For the quarter, our average product sales prices increased by 0.1%, while our average cost of goods sold rose 21.7% compared to the same period in 2021.

Operating expenses for the first quarter ended March 31, 2022, were RMB13.7 million (US$2.2 million), 30.5%, or RMB3.2 million above those in the same period of 2021. This increase was mainly due to higher salaries and employees' welfare, and expenditure on R&D.

Net income attributable to the Company during the first quarter ended March 31, 2022, was RMB17.1 million (US$2.7 million), compared to net income attributable to the Company of RMB31.4 million during the same period in 2021.

Basic and diluted net earnings per share was RMB5.24 (US$0.83) and RMB9.60 for the three-month period ended March 31, 2022, and 2021, respectively.

Total shareholders' equity was RMB334.1 million or US$52.7 million as of March 31, 2022, compared with RMB317.0 million as of December 31, 2021.

As of March 31, 2022, the Company had 3,265,837 basic and diluted 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.

 

 

Financial Tables to Follow

 

 

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2022, AND DECEMBER 31, 2021

(amounts in thousands except share and per share value)

(Unaudited)




March 31, 2022


December 31, 2021


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


261,247

41,211


250,608

Restricted cash


19,294

3,044


28,294

Accounts and bills receivable, net


28,430

4,485


29,225

Inventories


37,462

5,909


35,456

Advance to suppliers


9,275

1,463


7,933

Prepayments and other receivables


1,243

196


1,199







Deferred tax assets - current


1,144

180


1,144

Total current assets


358,095

56,488


353,859







Plant, properties and equipment, net


104,173

16,433


106,928

Construction in progress


299

47


-

Lease prepayments, net


14,551

2,295


14,685







Deferred tax assets – non-current


192

30


227







Total assets


477,310

75,293


475,699








Current liabilities






Short-term borrowings


65,000

10,253


65,000







Accounts payables


27,267

4,301


22,616

Notes payable


38,588

6,087


50,126

Advance from customers


4,172

658


7,672


6,387

1,008


11,479

Total current liabilities


141,414

22,307


156,893







Deferred tax liabilities


1,772

280


1,789







Total liabilities


143,186

22,587


158,682







Equity






Shareholders' equity






Registered capital (of US$0.519008 par value;
5,000,000 shares authorized; 3,265,837 issued and
outstanding)


13,323

2,102


13,323

Additional paid-in capital


311,907

49,202


311,907

Statutory reserve


37,441

5,906


37,441

Accumulated deficit


(29,387)

(4,636)


(46,494)

Cumulative translation adjustment


840

132


840

Total shareholders' equity


334,124

52,706


317,017

Total equity


334,124

52,706


317,017

Total liabilities and equity


477,310

75,293


475,699

 

 

 

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2022 AND 2021

(amounts in thousands except share and per share value)

(Unaudited)




The Three-Month Period Ended March 31, 



2022


2021


RMB

US$


RMB

Net sales


103,133

16,269


101,624

Cost of sales


72,963

11,510


59,174







Gross Profit


30,170

4,759


42,450







Operating expenses






Selling expenses


5,141

811


4,114

Administrative expenses


8,575

1,353


6,355

Total operating expenses


13,716

2,164


10,469







Operating income


16,454

2,595


31,981







Other income (expense)






- Interest income


1,860

293


856

- Interest expense


(1,058)

(167)


(1,575)

- Other income (expense), net


(131)

(21)


122







Total other expense


671

105


(597)







Income before provision for income taxes


17,125

2,700


31,384







Income tax benefit (expense)


(18)

(3)


(19)







Net income


17,107

2,697


31,365







Net loss attributable to non-controlling interests


-

-


-

Net income attributable to the Company


17,107

2,697


31,365







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 attributable to the Company


17,107

2,697


31,365







Earnings per share,
Basic and diluted


5.24

0.83


9.60

Weighted average number of 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, 2022 AND 2021

(amounts in thousands except share and per share value)

(Unaudited)




The Three-Month Period Ended March 31, 



2022


2021



RMB

US$


RMB

Cash flow from operating activities






Net income


17,107

2,697


31,365

Adjustments to reconcile net loss to net cash






used in operating activities






    - Depreciation of property, plant, and equipment


3,263

515


3,162

- Amortization of intangible assets


133

21


134

- Deferred income taxes


18

3


19

- Bad debt expense


(1)

-


(2)

-Inventory provision


-

-


-

Changes in operating assets and liabilities 






- Accounts and bills receivable


796

126


(12,934)

- Inventories


(2,006)

(316)


3,209

- Advance to suppliers


(1,342)

(212)


(5,049)

- Prepaid expenses and other current assets


(44)

(7)


(69)

- Accounts payable


4,650

734


(5,542)

- Accrued expenses and other payables


(5,646)

(892)


(21,259)

- Advance from customers


(3,500)

(552)


11,607

- Tax payable


556

88


177







Net cash provided by operating activities


13,984

2,205


4,818







Cash flow from investing activities






Purchases of property, plant and equipment


(508)

(80)


(734)

Amount change in construction in progress


(299)

(47)


-

Advanced to suppliers – non-current


-

-


616

Proceeds from sale of property, plant and equipment


-

-


118,208







Net cash provided by investing activities


(807)

(127)


118,090







Cash flow from financing activities






Proceeds from related party


-

-


(23,052)

Payment of capital lease obligation


-

-


-

Change in notes payable


(11,538)

(1,820)


10,000







Net cash used in financing activities


(11,538)

(1,820)


(13,052)







Effect of foreign exchange rate changes


-

231


-







Net decrease in cash and cash equivalent


1,639

489


109,856







Cash and cash equivalent






At beginning of period/year


278,902

43,766


120,923

At end of period/year


280,541

44,255


230,779







SUPPLEMENTARY DISCLOSURE:






Interest paid


1,058

167


1,575

Income tax paid


-

-


-







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


1,010

159


1,010








 

 

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