Tangshan Sanyou Chemical Industries (600409.SH): independently-developed modal fibers passed appraisal


In the first three quarters of 2011, operating revenue of Sanyou Chemical Industries reached RMB7.71 billion, up 35.3% YoY, with operating profit hitting RMB750 million, up 242.2% YoY. The favorable profitability was attributed to the higher price of soda ash and improved profitability of viscose staple fibers. Meanwhile, the newly approved modal fibers will become new growth engine of the company.

In Oct. 2011, modal fibers independently developed by Xingda Chemical Fiber, wholly-owned subsidiary of Tangshan Sanyou, passed technology and product identification of China National Textile & Apparel Council, which enabled Sanyou to be the first viscose staple fibers enterprise that is capable of modal fiber production in China. Modal fiber is the representative of high-end and high-performance fiber for civilian use, which has stronger and more stable profitability compared to ordinary viscose staple fiber. Therefore, it will improve the profit margin of viscose staple fiber business of Sanyou Chemical significantly after mass production of modal fiber.


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