On 26 Aug., 2016, Shandong Weifang Rainbow Chemical Co., Ltd. (Weifang Rainbow) released its financial figures for H1 2016, which showed that Weifang Rainbow's herbicide business performed very well in H1 2016:

• Revenue: USD262.48 million (RMB1.75 billion), up 23.08% YoY, 91.05% of the total revenue

• Gross profit margin: up 2.41 percentage points YoY

Source: Baidu

Weifang Rainbow successfully entered the New Third Board (=National Equities Exchange and Quotations, the pilot national share transfer system for small and medium-sized enterprises) on 13 July, 2016.

                                    Weifang Rainbow's financial figures by product, H1 2016, million USD

According to the major financial figures, Weifang Rainbow achieved large YoY increases in both total revenue and net profit in the depressed agrochemical industry in H1 2016:

• Total revenue: USD288.28 million (RMB1.93 billion), up 18.77% YoY

• Net profit: USD17.35 million (RMB115.85 million), up 21.55% YoY (USD3.08 million – RMB20.54 million higher)

According to the company, the rise in total revenue was mainly because of large orders and a significant YoY in sales volume during the reporting period. Weifang Rainbow's orders mainly come from overseas market. The company further exploited markets in Argentina and Brazil, which helped boost its revenue from primary business by USD454,780 (RMB3.04 million, up 18.83%) YoY to USD287.01 million (RMB1.92 billion).

What's more, the company's export sales amounted to USD271.56 million (RMB1.81 billion), 94.62% of the total revenue. Export volumes of all products hit 77,200 tonnes, 12,000 tonnes higher (up 18.45%) over H1 2015.

Regarding the large YoY rise in net profit, Weifang Rainbow believed that it was mainly thanks to the YoY increase of 2.44 percentage points in gross profit margin, increased orders and well controlled production costs. According to financial figures, the company's cost of sales rose by 15.36% YoY, which was 3.41 percentage points less than the growth in total revenue.

"Smooth implementation of our strategic transformation also contributed to the growths in total revenue and net profit," said Weifang Rainbow.

In H1 2016, the company's sales were greatly impacted by food safety problems and grim situation of environmental protection at home, high production costs of self-produced pesticide technical, slowly-progressed project construction due to regional restrictions as well as serious currency devaluation in many countries like Argentina, Brazil, Columbia and Mexico.

In this context, Weifang Rainbow kept carrying out the strategic plan of constructing the "global fast market entry platform", and actively initiated local business operation in target countries where construction of the platform was basically finished. In this way, Weifang Rainbow upgraded from a simple pesticide raw material manufacturer to a high quality pesticide formulations producer, an operator of the "global fast market entry platform", and a service provider concerning international crop protection.

                                         Weifang Rainbow's financial performance, H1 2016, million USD

This article comes from Herbicides China News 1609, CCM

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Tag: pesticide  herbicides

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