KGI Securities views Jiutian Chemical Group as an “excellent short term trading opportunity” after it reported a RMB32.6 million ($6.4 million) profit in 2Q20, even as revenue declined 6.6% y-o-y.

This was in stark contrast to a year ago, when it recorded a RMB 7 million loss. Analyst Joel Ng said the stellar performance was mainly due to lower raw material prices, resulting in a 140% y-o-y increase in gross profit.

“We see Jiutian as a good trading opportunity over the next 3 months, riding on strong tailwinds of favourable supply-demand of its chemical products,” he says.

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