Financial Services Association, March 25 (Reporter Chen Kang) The apparent consumption rate of polyester filament increased by 22.8% in 2023, driving polyester leader Xinfengming (603225.SH) to turn losses into profits. According to tonight's announcement, the company's annual revenue was 61,468 billion yuan, up 21.03% year on year; net profit was 1,086 billion yuan, reversed year on year loss; after deducting non-net profit of 900 million yuan, year on year loss.

Xinfengming mainly produces polyester filaments (POY, FDY, DTY), polyester staple fibers, PTA and other products. Polyester filaments are mainly used in clothing, home textiles and other fields. Judging from the production and sales situation, the production volume and sales volume of polyester filaments increased by nearly 20% over the previous year, the inventory volume decreased by 6.11%, and the inventory volume of polyester chips decreased by 16.22%.

In 2023, the prices of Xinfengming's main products all declined slightly. Among them, the average sales prices of POY, FDY, DTY, staple fiber, and PTA decreased by 2.93%, 0.24%, 2%, 3.52%, and 1.85% year-on-year. At the same time, the average purchase price of PTA, MEG, and PX for the main raw materials decreased by 4.71%, 11.05%, and 1.22%, respectively.

The cost of raw materials accounts for more than 85% of the cost in the Xinfengming chemical fiber sector. Under the influence of the decline in raw material prices, the gross margins of POY, FDY, and DTY increased by 2.17 pct, 4.55 pct, and 2.42 pct respectively. The overall gross margin of the chemical fiber sector increased by 2.3 percentage points over the previous year, while the gross margin of the petrochemical sector decreased by 1.94 percentage points to -0.36%.

In the performance forecast at the beginning of the year, Xin Fengming said that in 2022, due to a sharp rise in raw material costs and a phased contraction in market demand, the company's production, sales and price differences were affected to a certain extent; in 2023, the margin between supply and demand in the industry improved markedly, and the company's production, sales and price differences widened.

Xinfengming currently has a polyester filament production capacity of 7.4 million tons and a polyester staple fiber production capacity of 1.2 million tons. It is expected to increase the production capacity of 400,000 tons of filament this year and 650,000 tons of differentiated filament in 2025. The company said, “Future filament production capacity planning indicators are clear, construction factors are sufficient, and the company's overall filament competitiveness is expected to be further enhanced.” The report shows that with the exception of the Jiangsu Xintuo XCP02 installation, the capacity utilization rate of Xinfengming's main plants or projects in 2023 is over 80%.

According to Baichuan Yingfu data, the new production capacity plans for polyester filament are 2.65 million tons/year and 2.85 million tons/year respectively in 2024 and 2025, and the expansion rate will slow significantly in the next two years. The slowdown in production expansion is also conducive to further improvement in industry supply and demand.

At the beginning of this year, Xinfengming announced that it will invest about 20 billion yuan to build a new materials project. The first phase will invest about 3.5 billion yuan, and plans to build 1 250,000 tons/year polyester production unit (cationic fiber products) and 1 400,000 tons/year polyester production unit (differentiated chemical fiber products). The 20 billion yuan investment has raised concerns about overcapacity in the market, and the company said that the project is still in the early planning stage, and related progress is uncertain.