ASIA POLY
(STOCK: ASIAPLY)
ACRYLIC ON WINGS!
RAW MAT COST DOWN MORE THAN 50%, HIGHER ASP,
EARNINGS WOULD BOOST
Source: The Star
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DEMAND OF ACRYLIC SHEETS EXPLODED IN THE US DUE TO US-CHINA TRADE WAR & COVID-19
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ACRYLIC HAS SUPERIOR PROPERTIES & QUALITIES - A GREAT SUBSTITUTE TO GLASS ACROSS EXTENSIVE APPLICATIONS
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ASIA POLY, IS THE ONLY LISTED MALAYSIA MANUFACTURER OF CAST ACRYLIC SHEETS
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OPERATING AT FULL CAPACITY IN KLANG, ORDERS FULLY LOCKED UP TILL FEBRUARY 2022
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RAW MATERIAL COSTS DOWN MORE THAN 50% + HIGHER AVERAGE SELLING PRICE, EARNINGS WOULD BOOST
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ONLY AROUND 20 NOTABLE ACRYLIC SHEET MANUFACTURER AROUND THE WORLD, WITH ASIA POLY BEING ONE OF THEM
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SUSTAINED DEMAND POST-COVID: AUTOMOTIVE'S WINDSCREEN & WINDOWS
The Star, 8 August 2020, Sat - Export Boon for Asia Poly
https://www.thestar.com.my/business/business-news/2020/08/08/export-boon-for-asia-poly
Acrylic sheets are widely used across various industries, ranging from food to transport, building, and medical industries and now, as social distancing measures.
Source: Cast Acrylic Sheet Market, September 2019
(Before the market experiences the demand boom due to COVID-19 and social distancing measures)
Acrylic is favoured over glass given its durability, clarity and lightweight properties. Glass is 50% heavier than acrylic and has a clarity of only 82%, as compared to acrylic’s clarity of 92%. Apart from the clarity and lightweight properties of acrylic which make it a compelling substitute for glass, acrylic can be easily moulded into any shapes to fit any measurements.
ASIA POLY, IS THE ONLY LISTED MALAYSIA MANUFACTURER OF CAST ACRYLIC SHEETS
Asia Poly, the only listed Malaysian manufacturer of cast acrylic sheets, is now riding on strong growth opportunities presented by the US-China trade war and the Covid-19 pandemic. Due to the additional 25% tariff for acrylic products exported from China, customers from the US are shifting their purchases of acrylic sheets from Malaysia instead.
OPERATING AT FULL CAPACITY IN KLANG, ORDERS FULLY LOCKED UP TILL FEBRUARY 2022
Asia Poly is currently running at a maximum capacity of 800 tonnes per month through two production lines out of its facility in Klang. Asia Poly has locked in orders up to February 2022. Given that both of Asia Poly’s production lines are currently running at full capacity, they plan to add a third production line by June 2021.The third production line, which is expected to run at full capacity in September 2021, will effectively increase Asia Poly’s manufacturing capacity to 1,600 tonnes per month.
RAW MATERIAL COSTS DOWN MORE THAN 50% + HIGHER AVERAGE SELLING PRICE, EARNINGS WOULD BOOST
Asia Poly manufactures their acrylic sheets using 100% virgin methyl methacrylate monomer (MMA). The MMA price has been on a downtrend from US$2,750 per tonne in July 2018 to US$1,330 per tonne in 26 June 2020. This helps them lower their production cost significantly. Going forward, Asia Poly expects further improvements in gross profit margins, on the back of an increase in average selling prices.
SUSTAINED DEMAND POST-COVID: AUTOMATIVE'S WINDSCREEN & WINDOWS
Beyond Covid-19, Asia Poly is eyeing another segment with growth potential export markets – the automotive industry. The adoption of acrylic in automotive is growing as manufacturers aim to make cars as lightweight as possible. For one, the rear windscreen and windows of a car can be fitted with acrylic instead of glass.
ONLY AROUND 20 NOTABLE ACRYLIC SHEET MANUFACTURER AROUND THE WORLD
Based on market research, there are only about 20 notable acrylic sheet manufacturers around the world, and Asia Poly is one of them.
Source: Cast Acrylic Sheet Market, September 2019
DISCLAIMER
The article is for sharing purpose only. There is no buy/sell recommendation.
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