Yunnan Germanium replies to question letter: price decrease results in losses
2017-06-15 17:30:34 [Print]
Lately, board of directors of Yunnan Germanium received a question letter about the 2016 annual report sent by Shenzhen Stock Exchange. On the 13th of June at night, Yunnan Germanium released its responses to some relative problems. According to the responses, the decrease of operating revenue and net profits of last year resulted from the price decrease of germanium. In addition, the gross profit rate of germanium material products, whose operating revenue accounted for 50% of the total, was -1.18%.
On the 31st of March, Yunnan Germanium released the 2016 annual report. According to the report, the company achieved operating revenue of RMB298 million in fiscal year 2016, down by 25.83% YOY; net profits belonging to shareholders of listed companies were negative RMB103 million, down by 269.01% YOY.
According to Yunnan Germanium, affected by the depressed global economic environment, downstream demand for germanium material remains sluggish with sharply dropped prices in germanium material industry since 2016 due to overproduction and large inventories. According to the statistics from Asian Metal, the average transaction price of zone-refined germanium ingot (germanium metal) dropped from RMB11,000/kg (USD1,619/kg) in 2015 to RMB7,707/kg (USD1,134/kg) in 2016, recording a decrease of 29.95%.
As is shown in the response letter of Yunnan Germanium, the gross profit of major products is not satisfying. Additionally, the gross profit rates of pv grade germanium products and optical grade germanium products are positive, while those of infrared grade material and other germanium products are negative, which are respectively -1.18%, -9.10%, and -110.06%.
How will Yunnan Germanium cope with the fluctuated prices and slightly weak demand in the future? According to the response letter, it plans to take three significant measures.
The company will strengthen comprehensive budgetary management further. It will distribute the budgetary operating targets of 2017 to the specific subsidiaries and responsible subjects, supplemented with strengthened performance assessment, to realize the operating goals.
It will adjust the operating goals of 2017 appropriately. For example, Yunnan Dongchang Metal Processing Co., Ltd., a subsidiary of Yunnan Germanium, will halt production temporarily; besides, it will strengthen the exploration of self-owned mines, reduce the amount of out-purchased raw material, and improve the self-sufficiency rate of raw material.
The company will consolidate the existing market, focus on maintaining existing customers, and strengthen the market development of new products, especially the deep processing products. With an emphasis on direct users and based on the existing marketing network, it will extend new channels, construct both domestic and foreign markets, and increase the sales revenue of new products constantly.
On the 31st of March, Yunnan Germanium released the 2016 annual report. According to the report, the company achieved operating revenue of RMB298 million in fiscal year 2016, down by 25.83% YOY; net profits belonging to shareholders of listed companies were negative RMB103 million, down by 269.01% YOY.
According to Yunnan Germanium, affected by the depressed global economic environment, downstream demand for germanium material remains sluggish with sharply dropped prices in germanium material industry since 2016 due to overproduction and large inventories. According to the statistics from Asian Metal, the average transaction price of zone-refined germanium ingot (germanium metal) dropped from RMB11,000/kg (USD1,619/kg) in 2015 to RMB7,707/kg (USD1,134/kg) in 2016, recording a decrease of 29.95%.
As is shown in the response letter of Yunnan Germanium, the gross profit of major products is not satisfying. Additionally, the gross profit rates of pv grade germanium products and optical grade germanium products are positive, while those of infrared grade material and other germanium products are negative, which are respectively -1.18%, -9.10%, and -110.06%.
How will Yunnan Germanium cope with the fluctuated prices and slightly weak demand in the future? According to the response letter, it plans to take three significant measures.
The company will strengthen comprehensive budgetary management further. It will distribute the budgetary operating targets of 2017 to the specific subsidiaries and responsible subjects, supplemented with strengthened performance assessment, to realize the operating goals.
It will adjust the operating goals of 2017 appropriately. For example, Yunnan Dongchang Metal Processing Co., Ltd., a subsidiary of Yunnan Germanium, will halt production temporarily; besides, it will strengthen the exploration of self-owned mines, reduce the amount of out-purchased raw material, and improve the self-sufficiency rate of raw material.
The company will consolidate the existing market, focus on maintaining existing customers, and strengthen the market development of new products, especially the deep processing products. With an emphasis on direct users and based on the existing marketing network, it will extend new channels, construct both domestic and foreign markets, and increase the sales revenue of new products constantly.
Germanium Metal 99.99%min FOB China
Unit:USD/kg
China germanium metal producers' number MoM output increase statistics by province by month
Unit: pcs
