Sinostar PEC Holdings, which produces and supplies downstream petrochemical holdings within the Shandong Dongming Petrochemical Industrial Zone, announced earnings of RMB59.3 million ($12.2 million) for the 1QFY2021 ended March, 7,307.9% higher than earnings of RMB0.8 million in the year before.

The group reported net profit of RMB74.4 million, reversing from its net loss of RMB2.8 million in the 1QFY2020.

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Revenue increased 22.5% y-o-y to RMB960.4 million. The new polypropylene plant, which is currently undergoing trial productions, registered its maiden revenue contribution to the group.

1QFY2021 gross profit surged 710.6% y-o-y to RMB109.8 million due to higher gross margins on the back of higher average selling prices (ASPs) of petrochemicals such as propylene, polypropylene and MTBE.

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Gross profit margin (GPM) increased by 9.7 percentage points to 11.4%.

"Despite a challenging economic environment last year, the group has produced a set of commendable results. We will continue to focus on operational efficiency, optimise production and explore international export for our products,” says Li Xiangping, executive chairman and CEO of Sinostar PEC.

"The new polypropylene plant has significantly expanded our polypropylene production capacity and product types. This allows the group to explore into new industries and the international markets. We are confident on the group's long outlook and will continue to execute on our strategic initiatives to generate long-term value to our shareholders,” Li adds.

SEE:Production boost lifts Sinostar PEC's earnings; third plant with better product mix being built

In its outlook statement, the group says it expects to increase its utilisation of its new polypropylene production plant within 2021, which will contribute to its financial performance in the year ahead.

The group adds that it is “optimistic” with its FY2021 financial performance. It will “continue to manage its cash flow closely and focus on operational efficiency, optimise production and explore international market for the group's high-quality PP”.

Shares in Sinostar PEC closed flat at 18.5 cents on May 7.