CCM: Henan Billions achieves growth in revenue and net profit in Q1 2016 05-26-2016

On 26 April, 2016, Henan Billions Chemicals Co., Ltd. (Henan Billions) released its financial figures for the first quarter of 2016 (Q1 2016). Key figures for this period are:

Revenue: USD97.58 million (RMB630 million), up by 1.60% YoY

Net profit: USD2.56 million (RMB16.53 million), up by 14.70% YoY

                                                                                                 Source: Bing

Henan Billions expects its net profit to reach USD10.83-14.44 million (RMB69.95-93.26 million) in the first half of 2016, with a sharp YoY growth of about 50%-100%, as the TiO2 price continues to grow and the company further enhances its management and reins in operating costs.

It is worth noting that the price at which Henan Billions is currently selling TiO2 is still lower than that in the corresponding period last year despite five consecutive price rises in 2016. Its comprehensive gross profit margin also dropped by 1.2 percentage points YoY to 17.70% in Q1 2016. The growth of both revenue and net profit in this period was mainly due to the significant increase in the volume of TiO2 sales.

In March 2016, general secretary of Henan Billions, Shen Qingfei, predicted that the TiO2 price would continue to grow over the first half of the year. His prediction was based on a sharp fall in the company’s inventory level (compared to that in Jan. 2016), which fell to about 10,000 tonnes, the company receiving plenty of new orders, and increased trading frequency for a wide variety of products, which has led to tight supply.

Sichuan Lomon Titanium Co., Ltd. (Sichuan Lomon), a leading domestic company acquired in 2015 by Henan Billions, stopped taking any new orders in April for the following two reasons:

1. It had already taken on too many orders, and because of this had a long two-month lead time for processing orders;

2. The possibility that the TiO2 price may continue to grow in the near future spurred Sichuan Lomon to hold off on taking new orders for the time being.

Effective control over production costs and high product quality boosted Henan Billions’ sales volume and sales price of TiO2 in Q1 2016. Based on this, CCM believes that Henan Billions will improve its performance in the near future as the domestic TiO2 leader keeps enriching its business profile and expanding its market shares.

On 22 April, 2016, Henan Billions announced that it has been providing financing guarantees for its four subsidiaries. In particular, it has provided a financing guarantee for its wholly-owned subsidiary Billions (Hong Kong) Co., Ltd. for USD92.93 million (RMB600 million), which will be used to boost the development of the subsidiary's import and export business.

Henan Billions has guaranteed financing for another of its wholly-owned subsidiaries, Billions Europe Limited, guaranteeing USD36 million to help the company further explore the European market.

On 26 April, 2016, Henan Billions announced that it plans to cooperate with Zhejiang United Pigment Co., Ltd. to build a joint venture (Jiaozuo Billions United Pigment Co., Ltd.). The new subsidiary will be mainly engaged in the production of iron oxide pigments with a designed iron oxide production capacity of nearly 100,000 t/a.

The iron oxide production line will take full advantage of ferrous sulfate supplied by Henan Billions (a by-product of TiO2). Utilizing by-products of its TiO2 will help Henan Billions to further improve its profit margin.

This article comes from Titanium Dioxide China Monthly Report 1605, CCM

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.


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Tag: TiO2  Chemicals

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