Fuwei Films Announces Fourth Quarter and Full Year 2020 Financial Results

– Teleconference to be Held on Friday, April 23, 2021, at 9:00 a.m. ET –

BEIJING, April 23, 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 financial results for the fourth quarter and full year ended December 31, 2020.

4Q 2020 Highlights

  • Net revenues were RMB86.4 million or US$13.2 million.
  • Sales of specialty films were RMB62.3 million or US$9.5 million, up 30.6% year-over-year.
  • Gross margin was 42.2%, up from 35.7% a year ago.
  • Net loss attributable to the Company was RMB20.9 million or US$3.2 million
  • Basic and diluted loss per share was RMB6.39 or US$0.98

Full Year 2020 Highlights

  • Net revenues were RMB336.8 million or US$51.6 million.
  • Sales of specialty films were RMB204.7 million or US$31.4 million, up 26.0% year-over-year.
  • Gross margin was 40.6 %, up from 24.9% a year ago.
  • Net profit attributable to the Company was RMB19.6 million or US$3.0 million, up from a net profit of RMB11.4 million in 2019.
  • Basic and diluted profit per share was RMB6.00 or US$0.92, up from profit per share of RMB3.48 a year ago.
  • Net cash provided by operating activities was RMB117.5 million or US$18.0 million, compared to RMB54.4 million a year ago.

"In 2020, our revenues and gross margins continued to grow. Sales of specialty films increased by 26.0% year-over-year and accounted for 60.8% of our total revenues for the year. Our gross margin increased by 15.7 percentage points to 40.6% for the year of 2020, up from 24.9% in 2019. We are encouraged by positive trends in revenues and gross margins which we expect to enable us to better navigate the industrial and economic landscape ahead. We believe that our focus on innovation will enable the Company to expand end-user product applications and attract new clients and expand relationships with existing customers," commented Mr. Lei Yan, CEO and Chairman of the Company.

Fourth Quarter 2020 Results

Revenues for the fourth quarter of 2020 were RMB86.4 million or US$13.2 million, compared with RMB86.8 million in the fourth quarter of 2019, a decrease of RMB0.4 million, or 0.5%. Sales volume accounted for a decrease of RMB2.4 million while the increase of average sales price caused an increase of RMB2.0 million.

Sales of specialty films for the fourth quarter of 2020 were RMB62.3 million or US$9.5 million, or 72.1% of total revenues, compared with RMB47.7 million or 54.9% of total revenue in the fourth quarter of 2019. Sales volume accounted for an increase of RMB15.5 million while the decrease of average sales price caused a decrease of RMB0.9 million.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2020 and 2019 (amounts in thousands):

Three months period ended

December 31,
2020

% of Total

December 31,
2019

% of Total

RMB

US$

RMB

Stamping and transfer film

15,193

2,328

17.6%

30,005

34.6%

Printing film

4,117

631

4.8%

5,265

6.1%

Metallized film

815

125

0.9%

1,682

1.9%

Specialty film

62,285

9,546

72.1%

47,720

54.9%

Base film for other
applications

3,940

604

4.6%

2,171

2.5%

Total

86,350

13,234

100%

86,843

100%

Sales in China for the fourth quarter of 2020 were RMB80.5 million, or US$12.3 million, or 93.2% of total revenues, compared with RMB81.4 million or 93.8% of total revenues in the fourth quarter of 2019. Sales volume accounted for a decrease of RMB3.3 million while the increase of average sales price caused an increase of RMB2.4 million.

Overseas sales for the fourth quarter of 2020 were RMB5.9 million or US$0.9 million, or 6.8% of total revenues, compared with RMB5.4 million or 6.2% of total revenues in the fourth quarter of 2019. Sales volume accounted for an increase of RMB1.0 million while the decrease of average sales price caused a decrease of RMB0.5 million.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2020 and 2019 (amounts in thousands):

Three-month period ended

December 31,
2020

% of Total

December 31,
2019

% of Total

RMB

US$

RMB

Sales in China

80,500

12,337

93.2%

81,442

93.8%

Sales in other countries

5,850

897

6.8%

5,401

6.2%

Total

86,350

13,234

100%

86,843

100%

Gross profit for the fourth quarter of 2020 was RMB36.5 million or US$5.6 million, representing a gross margin of 42.2%, compared with a gross profit of RMB31.0 million, representing a gross margin of 35.7% in the fourth quarter of 2019.

Operating expenses for the fourth quarter of 2020 were RMB60.6 million or US$9.3 million compared with RMB15.7 million in the fourth quarter of 2019. The increase was mainly due to the increased loss on impairment of assets held for sale.

Net loss attributable to the Company for the fourth quarter of 2020 was RMB20.9 million or US$3.2 million, compared with net profit attributable to the Company of RMB10.3 million in the fourth quarter of 2019.

Basic and diluted loss per share was RMB6.39 or US$0.98, compared with basic and diluted profit per share of RMB3.17 in the fourth quarter of 2019.

2020 Full Year Results

During the fiscal year ended December 31, 2020, net revenues were RMB336.8 million or US$51.6 million, compared to RMB335.6 million in 2019, representing an increase of RMB1.2 million or 0.4%. The decrease in average sales price caused a decrease of RMB0.5 million, which was more than offset by an increase of RMB1.7 million that resulted from the increase in sales volume.

In 2020, sales of specialty films were RMB204.7 million or US$31.4 million or 60.8% of our total revenues, compared to RMB162.4 million or 48.4% in 2019, which was an increase of RMB42.3 million, or 26.0% higher than 2019. The increase of sales volume led to an increase of RMB49.2 million, which was offset in part by a decrease of RMB6.9 million that resulted from the decline in average sales price.

Overseas sales were RMB27.0 million or US$4.1 million or 8.0% of total revenues, compared with RMB47.6 million or 14.2% of total revenues in 2019. The increase of average sales price caused an increase of RMB0.6 million and the decrease of sales volume caused a decrease of RMB21.2 million.

The following is a breakdown of domestic versus overseas sales for the years ended December 31, 2020 and 2019 (amounts in thousands):

For the year ended December 31,

2020

% of Total

2019

% of Total

RMB

US$

RMB

Sales in
China

309,801

47,479

92.0%

288,066

85.8%

Sales in
other
countries

26,954

4,131

8.0%

47,554

14.2%

336,755

51,610

100.0%

335,620

100.0%

Gross profit for the year ended December 31, 2020 was RMB136.7 million or US$21.0 million, up from RMB 83.6 million in 2019. Our average unit sales price decreased by 0.2% compared to last year. The unit sales cost decreased by 21.0% due to the price decrease of main raw materials. Consequently, the decrease in cost of goods sold per unit in product exceeded that of sales price during 2020 compared with 2019, which contributed to the increase in our gross profit. Our gross margin was 40.6% for the year of 2020, up from a gross margin of 24.9% in 2019.

Operating expenses during the year ended December 31, 2020 were RMB115.3 million or US$17.7 million, an increase of RMB54.8 million, or 90.6%, as compared to 2019. The increase was mainly due to the increased loss on impairment of assets held for sale.

Net profit attributable to the Company for full year 2020 was RMB19.6 million or US$3.0 million, up from a net profit of RMB11.4 million in 2019.

Basic and diluted earnings per share for the year ended December 31, 2020 was RMB6.00 or US$0.92, up from profit per share of RMB3.48 a year ago.

Net cash provided by operating activities was RMB117.5 million or US$18 million for the year ended December 31, 2020 as compared to net cash provided by operating activities of RMB54.4 million for the year ended December 31, 2019.

Cash and cash equivalents on December 31, 2020 was RMB113.4 million or US$17.4 million, compared with RMB60.9 million as of December 31, 2019.

Conference Call 

The Company will host a teleconference on Friday, April 23, 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: 40802. The replay will be available until May 7, 2021.

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 significant competition in the BOPET film industry, especially 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 adverse impact 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 main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company’s products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company’s financial performance, uncertainty as to the future profitability, uncertainty as to the Company’s ability to successfully obtain additional funds to meet the working capital needs of the new BOPET production line, uncertainty as to the Company’s ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread; risks related to an economic downturn or recession in the United States and in other countries around the world; and changes in political, business, and economic conditions, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company’s business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. 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.

 

 

Financial Tables Follow

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

As of December 31, 2020 and 2019

(amounts in thousands, except share and per share data)

December 31, 2020

December 31, 2019

RMB

US$

RMB

ASSETS

Current assets

Cash and cash equivalents

113,423

17,383

60,871

Restricted cash

7,500

1,149

25,500

Accounts and bills receivable, net

32,393

4,964

26,960

Inventories

25,436

3,898

23,584

Advance to suppliers

7,359

1,128

6,277

Prepayments and other receivables

1,103

169

1,058

Assets held for sale

122,919

18,838

Deferred tax assets – current

6,947

1,065

1,266

Total current assets

317,080

48,594

145,516

Property, plant and equipment, net

111,308

17,059

302,642

Construction in progress

Lease prepayments, net

15,219

2,332

15,762

Advance to suppliers – long term, net

1,542

236

1,542

Deferred tax assets – non current

507

78

509

Total assets

445,656

68,299

465,971

LIABILITIES AND EQUITY

Current liabilities

Short-term borrowings

65,000

9,962

65,000

Due to related parties

73,571

11,275

119,297

Accounts payables

25,730

3,943

19,532

Notes payable

15,000

2,299

41,000

Advance from customers

9,297

1,425

5,204

Accrued expenses and other payables

27,400

4,199

5,454

Total current liabilities

215,998

33,103

255,487

Deferred tax liabilities

1,854

284

2,290

Total liabilities

217,852

33,387

257,777

Equity

Shareholders’ equity

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

13,323

2,042

13,323

Additional paid-in capital

311,907

47,802

311,907

Statutory reserve

37,441

5,738

37,441

Retained earnings

(135,707)

(20,798)

(155,317)

Cumulative translation adjustment

840

128

840

Total shareholders’ equity

227,804

34,912

208,194

Total equity

227,804

34,912

208,194

Total liabilities and equity

445,656

68,299

465,971

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2020, 2019 and 2018

(amounts in thousands, except share and per share data)

The Year Ended December 31, 

2020

2019

2018

RMB

US$

RMB

RMB

Net sales

336,755

51,610

335,620

333,522

Cost of sales

200,056

30,660

252,010

278,834

Gross profit

136,699

20,950

83,610

54,688

Operating expenses:

Selling expenses

17,483

2,679

13,721

13,363

Administrative expenses

59,865

9,175

46,794

52,593

Loss on assets held for sale

37,951

5,816

Total operating expenses

115,299

17,670

60,515

65,956

Operating income (loss)

21,400

3,280

23,095

(11,268)

Other income (expense):

– Interest income

2,145

329

1,106

1,225

– Interest expense

(8,490)

(1,301)

(8,892)

(9,766)

– Others income (expense), net

(1,560)

(239)

(1,621)

1,255

Total other income (expense)

(7,905)

(1,211)

(9,407)

(7,286)

Income (loss) before provision for income taxes

13,495

2,069

13,688

(18,554)

Income tax (expense) benefit 

6,115

937

(2,325)

(3,618)

Net income (loss) 

19,610

3,006

11,363

(22,172)

Net  income (loss) attributable to noncontrolling
interests

Net income (loss) attributable to the Company

19,610

3,006

11,363

(22,172)

Other comprehensive income (loss):

– Foreign currency translation adjustments attributable
to noncontrolling interest

– Foreign currency translation adjustments attributable
to the Company

(2,026)

Comprehensive income (loss) attributable to
non-controlling interest

Comprehensive income (loss) attribute to the
Company

19,610

3,006

11,363

(24,198)

Net earnings (loss) per share,
Basic and diluted

6.00

0.92

3.48

(6.79)

Weighted average number ordinary shares,
Basic and diluted 

3,265,837

3,265,837

3,265,837

3,265,837

 

 

 

 FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2020, 2019 and 2018

(Amounts in thousands)

The Years Ended December 31, 

2020

2019

2018

RMB

US$

RMB

RMB

Cash flow from operating activities

Net income (loss)

19,610

3,006

11,363

(22,172)

Adjustments to reconcile net income (loss)

 to net cash

provided by (used in) operating activities

– Loss on assets held for sale impairment

37,951

5,816

– Depreciation of property, plant and equipment

41,722

6,394

41,451

44,509

– Amortization of intangible assets

534

82

534

534

– Deferred income taxes (benefit)

(6,115)

(937)

2,325

3,617

– Bad debt (recovery) expense

578

89

(1,014)

(620)

– Inventory provision

267

41

1,489

Changes in operating assets and liabilities 

– Investment income recorded on Fuwei Holdings’ book

– Accounts and bills receivable

(5,086)

(779)

(3,319)

(1,884)

– Inventories

(2,119)

(325)

(399)

(96)

– Advance to suppliers

(2,009)

(308)

(583)

(1,796)

– Prepaid expenses and other current assets

(35)

(5)

10

161

– Accounts payable

6,198

950

(1,217)

3,278

– Accrued expenses and other payables

21,938

3,362

(302)

(850)

– Advance from customers

4,093

627

3,344

(117)

– Tax payable

9

1

684

817

Net cash provided by (used in) operating activities

117,536

18,014

54,366

25,381

Cash flow from investing activities

Purchases of property, plant and equipment

(11,257)

(1,725)

(12,925)

(4,619)

Advanced to suppliers – non current

28

Amount change in construction in progress

366

Deposit for purchase

Net cash used in (provided by) investing activities

(11,257)

(1,725)

(12,559)

(4,591)

Cash flow from financing activities

Principal payments of bank loans

Proceeds from short-term bank loans

50

14,950

Proceeds from related party

(45,726)

(7,008)

4,606

(36,382)

Payment of capital lease obligation

Change in notes payable

(26,000)

(3,985)

(7,000)

(19,900)

Net cash provided by (used in) financing activities

(71,726)

(10,993)

(2,344)

(41,332)

Effect of foreign exchange rate changes

(1)

829

(2,014)

Net increase (decrease) in cash and cash equivalent, restricted cash

34,552

6,125

39,463

(22,556)

Cash and cash equivalent,and  restricted cash

At beginning of period/year

86,371

12,407

46,908

69,464

At end of period/year

120,923

18,532

86,371

46,908

SUPPLEMENTARY DISCLOSURE:

Interest paid

8,490

1,301

8,892

9,766

Income tax paid

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES:

Account payable for plant and equipment:

1,010

155

1,010

1,010

Obligations for acquired equipment under capital lease:

 

Related Links :

http://www.fuweifilms.com

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