In addition, Chen is positive on the company’s management vision, which led to a “well-timed ramp-up of capacity”. The ramp-up in capacity helped provide a buffer against the cyclical downturn, he says in a May 20 report.
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“Thanks to the commercial operation of 20,000 tonnes of TBBS in 2HFY2020, the 13% y-o-y increase in sales volume propelled the performance turnaround,” he writes.
“The capacity expansion during the downturn in 2019 was a correct strategic move and proves management’s foresight and vision,” he adds.
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Risks to the counter include a potential suspension work order by the authorities in preparation for the 2022 Beijing Winter Olympics, which would be held in early February. It is currently unknown whether 4QFY2021 production will be affected, he writes.
Shares in China Sunsine closed 1.5 cents higher or 2.9% up at 53 cents on May 24.
