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

PR Newswire

BEIJING, Sept. 29, 2022

BEIJING, Sept. 29, 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                Three-Month 
                        Ended                      Period Ended 
                    June 30, 2022     % of Total  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                Three-Month 
                        Ended                      Period Ended 
                    June 30, 2022                 June 30, 2021 
                   RMB        US$     % of Total       RMB        % of Total 
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                  Six-Month 
                        Ended                     Period Ended 
                    June 30, 2022    % of Total   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                 Six-Month 
                         Ended                     Period Ended 
                     June 30, 2022                June 30, 2021 
                  RMB        US$      % of Total  RMB             % of Total 
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.

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