China XD Plastics Reports Halved Revenue in Q1, Stock Drops
Polymer composite materials supplier for the auto market, China XD Plastics Co. Ltd. (Nasdaq: CXDC) reported a net loss on Monday. The company has agreed to a buyout deal to go private.
The Harbin-based chemical company said in a statement today that revenue in the first quarter dropped to $144.8 million, down 52% year-over-year. Net loss in the three months through March hit $11 million, or 16 cents per share, compared with a net income of $11 million, or 16 cents per share, in the same period of 2019.
China XD Plastics reported its shipped volume plummeted to 28,326 metric tons in the first quarter, down 70% year-over-year.
In response to the outbreak, the company temporarily shut down its manufacturing facilities in Harbin and Sichuan and suspended its Dubai operations at the facilities since early February.
Instead, the plastics company turned to the production of raw materials for personal protective equipment such as goggles and masks. Additionally, the company boosted the sales price of high-priced semi-finished goods in the domestic market.
"We are pleased to see an overall increase of 65.6% in the average RMB selling price of our products, to partially offset the decreased sales volume of 70%," Jie Han, the chief executive officer, said in a statement.
China, the world's biggest vehicle market, saw changes from the supply chain disruption and decreased demand in first quarter. Industry data from the China Association of Automobile Manufacturers (CAAM) showed year-over-year decreases of 19%, 79%, and 43% in January, February, and March in auto sales.
Given that poor performance in the Chinese auto market, some Chinese auto suppliers listed in New York reported disappointing financial results. China Automotive Systems Inc. (Nasdaq: CAAS) said its revenue is down 33% year-over-year.
"Our extraordinary sales decline reflects the devastating impact of the COVID-19 pandemic on China's economy and especially the domestic Chinese automobile industry," Qizhou Wu, the chief executive officer of CAAS, said in the statement.
Auto solutions provider Bitauto Holding Ltd.'s (NYSE: BITA) said revenue in the first quarter down 36% year-over-year. Bitauto's automobile finance facilitator business, Yixin Group Ltd. (SEHK: 2858), saw revenue in the first quarter drop 48%.
On rising hopes of a quick recovery, auto sales in China jumped in April and May, up 6% and 15% year-over-year, respectively.
On May 8, China XD Plastics received a "going-private" proposal from its management team and said on June 15 that it has agreed to a buyout deal and a merger with Faith Dawn Ltd. and Faith Horizon Inc. Under the agreement, Faith Dawn will acquire all the outstanding shares of China XD Plastics for a cash consideration equal to $1.20 per share.
Shares in China XD Plastics traded at $1.14 per share, down 1% intraday Monday.
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