The lubricants business of Hong Kong-based Yip’s Chemical Holdings Ltd. reported improved operating profit and sales for the first half of this year, compared to the same period in 2020, when results were heavily affected by the emerging COVID-19 pandemic.
The lubricants business posted an operating profit of 11.3 million Hong Kong dollars (U.S. $1.5 million) for the first half of this year, improving from an HK$9.3 million loss for the first six months of 2020.
Sales for the lubricants business jumped 132% to HK$188.5 million for the first half of this year, compared with HK$81.4 million. “In view of the continuous rise in the prices of oil and associated raw materials, we carried out effective supply-chain management and strategic stocking of raw materials,” CEO Tsz Hin “Stephen” Yip said in the company’s interim earnings report. Last year, in its half-year interim earnings news release issued in August 2020, the company had noted that COVID-19’s impacts had diminished car owners’ demand for car maintenance, hampering auto repair shop business and reducing automotive lubricant demand.
For the first half of this year, the company’s lubricants business continued to make inroads into the automotive lubricants market via distributor network development and original equipment manufacturer operations in mainland China, Yip said. “While the lubricants business is developing steadily on the right track, the attention for the second half of 2021 will be focused on the development of the sales network and the enhanced management of the supply chain, so as to maintain reasonable profitability in the highly competitive lubricants market,” he said.
Yip’s Chemical Holdings has produced lubricants since 1992 and now supplies automotive, industrial and specialty lubricants under the Hercules and Pacoil brand names. Yip’s Chemical Holdings Ltd. was established in 1971 and listed on the Hong Kong Stock Exchange in 1991. The group focuses on the production and sales of petrochemical products, including solvents, coatings, inks and lubricants, with its nationwide sales network covering all major provinces and cities across China. The group said that in recent years it has strived to provide value-added services to consumers by investing in automobile lubricant changing and maintenance chain businesses.