BEIJING, April 28, 2022 /PRNewswire/ -- Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its financial results for the fourth quarter and full year ended December 31, 2021.

4Q 2021 Highlights

  • Net revenues were RMB92.6 million or US$14.5 million
  • Sales of specialty films were RMB71.1 million or US$11.2 million, up 14.1% year-over-year
  • Gross margin was 30.8%, down from 42.2% a year ago
  • Net income attributable to the Company was RMB11.4 million or US$1.8 million
  • Basic and diluted earnings per share was RMB3.48 or US$0.55

Full Year 2021 Highlights

  • Net revenues were RMB396.8 million or US$62.3 million
  • Sales of specialty films were RMB277.3 million or US$43.5 million, up 35.5% year-over-year
  • Net income attributable to the Company was RMB89.2 million or US$14.0 million, up from a net income of RMB19.6 million in 2020
  • Basic and diluted earnings per share was RMB27.32 or US$4.29, up from a profit per share of RMB6.00 a year ago
  • Net cash provided by operating activities was RMB79.9 million or US$12.5 million, compared to RMB117.5 million a year ago

"In 2021, our revenues and gross margins continued to grow. Sales of specialty films increased by 35.5% year-over-year and accounted for 69.9% of our total revenues for the year. Our gross margin was 37.5% in 2021. We are encouraged by positive trends recorded in both revenues and gross margins, which we expect to enable us to better navigate the industrial and economic landscape ahead. We believe that our focus on innovation will allow the Company to expand end-user product applications, attract new clients, and expand relationships with existing customers," commented Mr. Lei Yan, CEO and Chairman of the Company.

Fourth Quarter 2021 Results

Revenues for the fourth quarter of 2021 were RMB92.6 million or US$14.5 million, compared with RMB86.4 million in the fourth quarter of 2020, an increase of RMB6.2 million, or 7.2%. Sales volume accounted for an increase of RMB0.6 million, while the increase in average sales price resulted in an increase of RMB5.6 million.

Sales of specialty films for the fourth quarter of 2021 were RMB71.1 million or US$11.2 million, accounting for 76.8% of total revenues, compared with RMB62.3 million or 72.1% of total revenue in the fourth quarter of 2020. Higher sales volume accounted for an increase of RMB5.5 million, while the rise in average sales price resulted in an increase of RMB3.3 million.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2021, and 2020 (amounts in thousands):



Three months period ended



December 31, 2021

% of Total

December 31, 2020

% of Total



RMB

US$

RMB

Stamping and transfer film


13,240

2,077

14.2%

15,193

17.6%

Printing film


3,752

589

4.1%

4,117

4.8%

Metallized film


802

126

0.9%

815

0.9%

Specialty film


71,064

11,151

76.8%

62,285

72.1%

Base film for other
applications


3,726

585

4.0%

3,940

4.6%








Total


92,584

14,528

100%

86,350

100%

 

Sales in China for the fourth quarter of 2021 were RMB86.6 million, or US$13.6 million,  representing 93.6% of total revenues, compared with RMB80.5 million or 93.2% of total revenues recorded in the fourth quarter of 2020. Higher sales volume accounted for an increase of RMB0.3 million, while the rise in average sales price explained the increase of RMB5.8 million.

Overseas sales for the fourth quarter of 2021 amounted to RMB5.9 million or US$0.9 million,  representing 6.4% of total revenues, compared with RMB5.9 million or 6.8% of total revenues in the fourth quarter of 2020.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2021, and 2020 (amounts in thousands):



Three-month period ended

 



December 31, 2021

% of Total

December 31, 2020

% of Total



RMB

US$

RMB

Sales in China


86,636

13,595

93.6%

80,500

93.2%

Sales in other countries


5,948

933

6.4%

5,850

6.8%








Total


92,584

14,528

100%

86,350

100%

 

Gross profit for the fourth quarter of 2021 was RMB28.5 million or US$4.5 million, representing a gross margin of 30.8%, compared with a gross profit of RMB36.5 million, or a gross margin of 42.2% in the fourth quarter of 2020.

Operating expenses for the fourth quarter of 2021 totaled RMB17.9 million or US$2.8 million, compared with RMB60.6 million in the fourth quarter of 2020.

Net income attributable to the Company for the fourth quarter of 2021 was RMB11.4 million or US$1.8 million, compared with a net loss of RMB20.9 million in the fourth quarter of 2020.

Basic and diluted earnings per share was RMB3.48 or US$0.55, compared with basic and diluted loss per share of RMB6.39 in the fourth quarter of 2020.

2021 Full Year Results

During the fiscal year ended December 31, 2021, net revenues reached RMB396.8 million (US$62.3 million), compared to RMB336.8 million in 2020, representing an increase of RMB60.0 million, or 17.8%.

In 2021, sales of specialty films were RMB277.3 million (US$43.5 million), accounting for 69.9% of our total revenues as compared to RMB204.7 million, or 60.8% in 2020, representing an increase of RMB72.6 million, or 35.5% above those recorded in 2020. Higher sales volume led to an increase of RMB59.0 million, and an RMB13.6 million increase from the rise in average sales price.

Overseas sales were RMB39.4 million (US$6.2 million) or 9.9% of total revenues, compared with RMB27.0 million or 8.0% of total revenues in 2020. The rise in average sales price caused an increase of RMB2.5 million, and the higher sales volume explained the RMB9.9 million increase.

The following is a breakdown of domestic versus overseas sales for the years ended December 31, 2021, and 2020 (amounts in thousands):


For the year ended December 31,



 

2021

% of Total

 

2020

% of Total



RMB

US$

RMB

Sales in China


357,396

56,083

90.1%

309,801

92.0%

Sales in other countries


39,403

6,183

9.9%

26,954

8.0%



396,799

62,266

100.0%

336,755

100.0%

 

Our gross profit for the year ended December 31, 2021, was RMB148.9 million (US$23.4 million), up from RMB 136.7 million in 2020. Our average unit sales price rose 11.0% when compared to last year. The unit sales cost increased 16.7% due to the higher raw materials prices. Consequently, the increase in cost of goods sold per unit exceeded that of sales price during 2021 compared with 2020, contributing to the decrease in our gross margin. Our gross margin was 37.5% for the year 2021, compared to a gross margin of 40.6% in 2020.

Our operating expenses during the year ended December 31, 2021, were RMB54.1 million (US$8.5 million), a decrease of RMB61.2 million, or 53.1%, as compared to 2020. The decrease was mainly due to the reduction in loss on impairment of assets held for sale and depreciation of property, plant, and equipment.

Net income attributable to the Company for the full year of 2021 was RMB89.2 million or US$14.0 million, up from a net profit attributable to the Company of RMB19.6 million in 2020.

Basic and diluted earnings per share for the year ended December 31, 2021, was RMB27.32 or US$4.29, up from a profit per share of RMB6.00 a year ago.

Net cash provided by operating activities was RMB79.9 million or US$12.5 million for the year ended December 31, 2021, as compared to net cash provided by operating activities of RMB117.5 million for the year ended December 31, 2020.

Cash and cash equivalents on December 31, 2021 amounted to RMB250.6 million or US$39.3 million, compared with RMB113.4 million as of December 31, 2020.

About Fuwei Films

Fuwei Films conducts its business through its wholly-owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures, and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially-oriented polyethylene terephthalate). Fuwei's BOPET film is widely used for packaging food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.

Safe Harbor

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include significant competition in the BOPET film industry, especially the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the adverse impact of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully obtain additional funds to meet the working capital needs of the new BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread; risks related to an economic downturn or recession in the United States and in other countries around the world; and changes in political, business, and economic conditions, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from the information contained in the forward-looking statements as a result of the risk factors.

 

 

Financial Tables Follow

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS

As of December 31, 2021, and 2020

(amounts in thousands, except share and per share data)






December 31, 2021


December 31, 2020





RMB


US$


RMB

ASSETS









Current assets









Cash and cash equivalents




250,608


39,326


113,423

Restricted cash




28,294


4,440


7,500

Accounts and bills receivable, net




29,225


4,586


32,393

Inventories




35,456


5,564


25,436

Advance to suppliers




7,933


1,245


7,359

Prepayments and other receivables




1,199


188


1,103

Assets held for sale




0


0


122,919

Deferred tax assets – current




1,144


180


6,947

Total current assets




353,859


55,529


317,080










Property, plant and equipment, net




106,928


16,779


111,308

Construction in progress




0


0


Lease prepayments, net




14,685


2,304


15,219

Advance to suppliers - long term, net




0


0


1,542

Deferred tax assets - non-current




227


36


507

Total assets




475,699


74,648


445,656










LIABILITIES AND EQUITY









Current liabilities









Short-term loans




65,000


10,200


65,000

Due to related parties




0


0


73,571

Accounts payables




22,616


3,549


25,730

Notes payable




50,126


7,866


15,000

Advance from customers




7,672


1,204


9,297

Accrued expenses and other payables




11,479


1,801


27,400

Total current liabilities




156,893


24,620


215,998

Deferred tax liabilities




1,789


281


1,854

Total liabilities




158,682


24,901


217,852










Equity









Shareholders' equity









Registered capital(of US$0.519008 par value; 5,000,000 shares authorized; 3,265,837
issued and outstanding)




13,323


2,091


13,323










Additional paid-in capital




311,907


48,945


311,907

Statutory reserve




37,441


5,875


37,441

Retained earnings




(46,494)


(7,296)


(135,707)

Cumulative translation adjustment




840


132


840

Total shareholders' equity




317,017


49,747


227,804

Total equity




317,017


49,747


227,804

Total liabilities and equity




475,699


74,648


445,656

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2021, 2020 and 2019

(amounts in thousands, except share and per share data)






The Year Ended December 31, 





2021


2020


2019





RMB


US$


RMB


RMB

Net sales




396,799


62,266


336,755


335,620

Cost of sales




247,902


38,901


200,056


252,010

Gross profit




148,897


23,365


136,699


83,610

Operating expenses:











Selling expenses




20,706


3,249


17,483


13,721

Administrative expenses




33,424


5,245


59,865


46,794

Loss on assets held for sale




0


0


37,951


Total operating expenses




54,130


8,494


115,299


60,515

Operating  income (loss)




94,767


14,871


21,400


23,095

Other income (expense):











- Interest income




5,128


805


2,145


1,106

- Interest expense




(5,054)


(793)


(8,490)


(8,892)

 - Other income (expense), net




390


61


(1,560)


(1,621)

Total other income (expense)




464


73


(7,905)


(9,407)

Income (loss) before provision for income taxes




95,231


14,944


13,495


13,688

Income tax (expense) benefit




(6,018)


(944)


6,115


(2,325)

Net income (loss) 




89,213


14,000


19,610


11,363

Net income (loss) attributable to noncontrolling interests




0


0



Net income (loss) attributable to the Company




89,213


14,000


19,610


11,363

Other comprehensive income (loss):











- Foreign currency translation adjustments attributable to noncontrolling interest




0


0



- Foreign currency translation adjustments attributable to the Company




0


0



Comprehensive income (loss) attributable to non-controlling interest




0


0



Comprehensive income (loss) attribute to the Company




89,213


14,000


19,610


11,363

Net earnings (loss) per share, Basic and diluted




27.32


4.29


6.00


3.48

Weighted average number of ordinary shares, Basic and diluted 




3,265,837


3,265,837


3,265,837


3,265,837

 

 

 

FUWEI FILMS (HOLDINGS) CO., LTD, and SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2021, 2020 and 2019

(Amounts in thousands)




The Years Ended December 31, 



2021


2020


2019



RMB


US$


RMB


RMB

Cash flow from operating activities









Net income (loss)


89,213


14,000


19,610


11,363

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities


















- Loss on assets held for sale impairment


0


0


37,951


 - Depreciation of property, plant, and equipment


12,365


1,940


41,722


41,451

- Amortization of intangible assets


534


84


534


534

- Deferred income taxes (benefit)


6,018


944


(6,115)


2,325

- Bad debt (recovery) expense


(1,230)


(193)


578


(1,014)

- Inventory provision


(431)


(68)


267


1,489

Changes in operating assets and liabilities









- Investment income recorded on Fuwei Holdings' book


0


0



- Accounts and bills receivable


3,470


545


(5,086)


(3,319)

- Inventories


(9,589)


(1,505)


(2,119)


(399)

- Advance to suppliers


352


55


(2,009)


(583)

- Prepaid expenses and other current assets


(96)


(15)


(35)


10

- Accounts payable


(3,114)


(489)


6,198


(1,217)

- Accrued expenses and other payables


(15,273)


(2,398)


21,938


(302)

- Advance from customers


(1,625)


(255)


4,093


3,344

- Tax payable


(645)


(101)


9


684










Net cash provided by (used in) operating activities


79,949


12,544


117,536


54,366










Cash flow from investing activities









Purchases of property, plant, and equipment


(7,986)


(1,253)


(11,257)


(12,925)

Advanced to suppliers - non-current


1,542


242



Amount change in construction in progress


0


0



366

Proceeds from sale of property, plant, and equipment


122,919


19,289



Deposit for purchase


0


0












Net cash used in (provided by) investing activities


116,475


18,278


(11,257)


(12,559)










Cash flow from financing activities









Principal payments of bank loans


0


0



Proceeds from short-term bank loans


0


0



50

Proceeds from related party


(73,571)


(11,545)


(45,726)


4,606

Payment of capital lease obligation


0


0



Change in notes payable


35,126


5,512


(26,000)


(7,000)



















Net cash provided by (used in) financing activities


(38,445)


(6,033)


(71,726)


(2,344)










Effect of foreign exchange rate changes


0


445


(1)











Net increase (decrease) in cash and cash equivalent, restricted cash


157,979


25,234


34,552


39,463










Cash and cash equivalent, and restricted cash









At beginning of the period/year


120,923


18,532


86,371


46,908

At end of the period/year


278,902


43,766


120,923


86,371










SUPPLEMENTARY DISCLOSURE:









Interest paid


5,054


793


8,490


8,892

Income tax paid


0


0












SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:









Account payable for plant and equipment:


1,010


158


1,010


1,010

Obligations for acquired equipment under capital lease:


0


0



 

 

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SOURCE Fuwei Films

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