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

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BEIJING, June 25, 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.

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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

Cision View original content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-first-quarter-of-2021-301319473.html

Source: Fuwei Films (Holdings) Co., Ltd.

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