Yung Zip Chemical, a leading active pharmaceutical ingredient (API) manufacturer, saw its core business profits double in the first half of 2024, with earnings per share (EPS) reaching NT$1.34, marking a historic high for the same period. Looking ahead to the second half of the year, despite a slowdown in contract manufacturing orders, the company anticipates continued growth driven by its API products and an influx of orders from its parent company, Yung Shin Pharmaceutical, starting from September and October. It is projected that the company’s revenue will grow by more than 20% for the full year, with EPS expected to hit NT$2.5, setting a new record.
In the first half of 2024, Yung Zip Chemical’s revenue rose to NT$324 million, representing a 19% year-over-year growth. This was fueled by increased contract manufacturing orders and customers expediting shipments, alongside a surge in API orders. The company’s gross margin improved to 35.52%, up from 30.60% in the same period last year, a 5-percentage-point increase. This improvement was attributed to higher production utilization rates and a better product mix.
Operating expenses remained well-controlled, resulting in a significant jump in operating profit, which surged to NT$56.81 million, representing a 123% year-over-year growth. The operating profit margin also rose sharply to 17%, compared to 9% in the same period last year. Additionally, aided by favorable exchange rates, non-operating income climbed to NT$9.14 million, marking a 109% increase. Net profit attributable to the parent company was NT$56.75 million, a year-over-year growth of 108%, with an EPS of NT$1.34, doubling compared to the same period last year and reaching a record high.
In terms of products, Yung Zip Chemical noted that its pain relief API business grew by 22% in the first half of the year. One pain relief API product, for which the company holds a CEP certification, saw steady demand in Europe, while another benefited from increasing demand from Japanese customers. The contract manufacturing and specialty chemicals segment grew by an impressive 73%, driven by Yung Zip’s customer expansion in the Japanese market, where the company now holds the top market share, leading to increased orders. Additionally, collaborations with Chinese customers on new drug projects provided further growth momentum.
The collaboration between Yung Zip Chemical and the Yung Shin Group is expected to become even closer in the future. Yung Zip Chemical has already established 3 to 4 steady product lines with Yung Shin, and 2 to 3 new products are currently under testing. The cooperation includes API production for Yung Shin, and discussions are underway regarding potential partnerships for distribution. Last year, Yung Shin accounted for around 7% of Yung Zip’s shipments. In the first half of this year, that proportion decreased to 3-4% due to lower order volumes, but shipments are expected to ramp up in the fourth quarter, starting from September and October. Looking into 2025, with the anticipated upward trend in overall business performance, the proportion of shipments to Yung Shin is projected to return to 7-8%.
From January to August of this year, Yung Zip Chemical’s cumulative revenue reached NT$447 million, a year-over-year growth of 25.2%. Although contract manufacturing orders have slowed, the company’s API segment is expected to continue growing, along with a concentration of orders from Yung Shin. Analysts predict that the company will maintain double-digit year-over-year growth in the second half of the year, with annual revenue expected to grow by more than 20%, and EPS likely to reach NT$2.5.
Resource (mandarin): 永日雙引擎拉動下半年成長續航，今年營運拚新高，EPS挑戰2.5元
