HARBIN, China, Sept. 15, 2015 /PRNewswire/ -- China XD Plastics
Company Limited (NASDAQ: CXDC)
("China XD Plastics" or the "Company"), one of China's leading specialty chemical companies
engaged in the development, manufacture and sale of polymer
composite materials primarily for automotive applications, today
provided a business update and an adjustment to its full year
financial guidance.
In the first half of 2015, the substantial slowdown in
China's domestic growth has
impeded the growth of its auto industry and China's entire auto supply chain, which has
caused downward pricing pressure on the Company's products.
Further, a change in the Company's overseas product mix has
resulted in pricing pressure and margin contraction as compared to
the year-ago period. In addition, the Company has experienced
a delay in its payment collection with respect to a South Korean
customer, which could impact its ability to meet its financial
guidance. Accordingly, the Company has adjusted its full year
financial guidance. The Company now expects full-year 2015 revenue
to be in the $900 million to $1
billion range, and expects full-year net income to be in the
$80 million to $100 million range.
This financial forecast reflects the Company's business outlook for
the remainder of fiscal 2015.
"We feel it is prudent to adjust guidance now in order to
provide our shareholders with an update regarding our operational
conditions and expectations in a timely and transparent way," said
Jie Han, Chairman of the Board of
Directors and Chief Executive Officer. "The primary cause for
the revision is a likely reduction in business from a relatively
new overseas customer attributable to payment collection issues. We
view this as a one-time event and we are taking steps to resolve
this matter."
"Our long term growth strategy remains intact. Our Phase 2
expansion in Dubai is on track for
completion by the end of 2015, and we expect the new facility to
fulfill orders from new customers in South Korea and Europe in early 2016. In addition, our
Sichuan campus is on schedule to
be operational in the first half of 2016. We are excited about
the growth prospects of the Company and believe that our
technological edge and market positioning will enable us to
substantially grow revenues and market share in the years
ahead."
The Company's adjustment of its full year financial guidance is
principally based on the following two factors:
1) The Company has experienced a delay in its payment collection
with respect to a South Korean customer. To better manage its
financial risk, the Company implemented a one-time cease-supply to
the customer for 60 days in accordance with its risk management
policy while both parties actively negotiate the pricing and
payment terms associated with the Company's high-end products;
and,
2) The Company has experienced pricing and margin pressure from
its domestic customers due to the continuing slowdown of
China's auto sector and its
upstream supply chain which has continued into the third quarter of
2015.
The Company estimates that approximately 89% of the revision to
its full year 2015 net income guidance range is attributable to the
overseas customer situation addressed above, while approximately
11% of the revision is attributable to China's macroeconomic environment. The Company
believes that its current operations are sound and that its
technological base and culture of innovation affords it the
opportunity to expand into additional verticals.
About China XD Plastics Company Limited
China XD Plastics Company Limited, one of China's leading specialty chemical companies,
through its wholly-owned subsidiaries, develops, manufactures and
sells polymer composites materials, primarily for automotive
applications. The Company's products are used in the exterior and
interior trim and in the functional components of 27 automobile
brands manufactured in China,
including without limitation, Audi,
BMW, Volkswagen, Buick, Mazda, and Toyota. The Company's
wholly-owned research center is dedicated to the research and
development of polymer composites materials and benefits from its
cooperation with well-known scientists from prestigious
universities in China. As of
June 30, 2015, 339 of the Company's
products have been certified for use by one or more of the
automobile manufacturers in China.
For more information please visit http://www.chinaxd.net.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements which are based on the Company's current expectations
and are subject to numerous risks and uncertainties that may cause
these forward-looking statements to be inaccurate.
Risks that may cause these forward-looking statements to be
inaccurate include, among others:
- forecasted sales and income results for the fiscal year are
subject to final results and may be adjusted or otherwise change
after normal year-end accounting review;
- the Company's ability to collect payment from its customers in
a timely manner, or further implementation of the cease-supply
policy, may affect the financial performance of the Company;
- competitive pricing pressures or product mix shift to more
advanced products may result in lower average selling prices, lower
revenues and reduced gross margins;
- the prospect of the Company's Dubai facility, and the associated expansion
into Middle East, Europe and other parts of Asia may affect the financial performance of
the Company;
- the Company's ability to execute its growth strategy and the
effectiveness of its marketing strategy; and
- other risks detailed in the Company's filings with the
Securities and Exchange Commission and available on its website at
http://www.sec.gov.
All statements made in this news release are made only as of the
date of this release. The Company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the
expectations expressed in these forward looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results.
Contacts:
China XD Plastics
Mr. Taylor Zhang
CFO (New York)
US Phone: +1 (212) 747-1118
Email: cxdc-ir@chinaxd.net
Grayling
Vivian Chen
Managing Director
Email: vivian.chen@grayling.com
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SOURCE China XD Plastics Company Limited