Rainbow achieves 22% profit growth in H1 2016

Rainbow announced its 2016 mid-year report on August 25.

In the first half of 2016, the company achieved business income of 1.925 billion yuan, up 18.77% year-on-year (y-o-y), of which exports reached 77,200 tons (kl), up 18.45% y-o-y, with an addition of 12,000 tons. The main business income (consolidated) reached 1.917 billion yuan, up 18.83% y-o-y, with an addition of 304 million yuan, attributable to the active advancement of the worldwide “Rapid market access platform” and the localized operations in more target countries. The net profit (consolidated) of the report period reached 116 million yuan, up 21.55% y-o-y, with an addition of 20.54 million yuan.

Unit in Yuan; Currency in RMB
This report is Rainbow’s first mid-year report after being listed on the National Equities Exchange and Quotations on July 31 this year. Rainbow’s main business includes research, production, and sales of pesticide technical and formulations, covering technical product synthesis and formulation processing of herbicides, fungicides, and insecticides. Some of the technical processes have reached advanced levels, leading the global market in some cases. As a crop protection product and service provider, the company has worked out a distinctive strategic plan and business model, represented by its worldwide “Rapid market access platform.”

Rainbow has said its sales in the first half of 2016 were affected by various factors, such as the stringent safety and environmental compliance requirements in China; the higher cost of technical products; the protracted proceedings for the approval of project locations; and the currency devaluation in Argentina, Brazil, Colombia, and Mexico.

Under such circumstances, the company has continued to establish its global “Rapid market access platform” and has initiated localized operations in countries where the platform has already been established. On this basis, Rainbow has endeavored to shift from a pesticide technical manufacturer to a high-quality formulation product manufacturer, the operator of its “Rapid market access platform,” and an international crop protection service leader. As a result of adopting this strategy, the company could eventually achieve growth in both income and profitability.

During the report period, the herbicide income of the company was 1.753 billion yuan, up 23.08% y-o-y, which reveals significant growth. The main business income of the company is shown below:

Unit in Yuan; Currency in RMB

Product	Herbicides	Insecticides	Fungicides
Business income	1,752,978,187.15	72,481,109.45	78,761,066.32
Operating cost	1,456,924,565.19	58,475,743.95	62,402,261.31
Gross profit (%)	16.89	19.32	20.77
Increase or decrease of business income over last year (%)	23.08	−35.46	8.73
Increase or decrease of operating cost over last year (%)	19.62	−35.90	7.58
Increase or decrease of gross profit over last year (%)	2.41	0.55	0.85