Wanhua Chemical Group released its half-year report, with revenue of 97.067 billion yuan in the first half of the year, a year-on-year increase of 10.77%; net profit attributable to shareholders was 8.174 billion yuan, a year-on-year decrease of 4.6%. The main reason for the increase in revenue but not profit was the cost of raw materials. In the first half of the year, the average price of the main raw material, pure benzene, increased by 24% year-on-year. Industry insiders say that the upcoming peak season and new projects in the second half of the year will improve the company's profitability.
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Although the recovery of downstream demand has boosted revenue growth, the fluctuation of raw material prices still has an impact on the profitability of Wanhua Chemical (600309.SH).
Wanhua Chemical Group released its 2024 half-year report tonight, achieving revenue of 97.067 billion yuan in the first half of the year, a year-on-year increase of 10.77%; achieving net profit attributable to shareholders of listed companies of 8.174 billion yuan, a year-on-year decrease of 4.6%.
In the half-year report, the company stated that in the first half of this year, global demand in the polyurethane industry remained growth, especially in cold chain, automotive and other markets; overseas investment demand in the construction industry improved. At the same time, with the technical renovation and expansion of the Fujian MDI device, the effective capacity of the TDI device increased, and the new polyether device in Yantai was put into production. In the first half of the year, the production and sales of the company's main products achieved year-on-year growth.
According to the company's main business data for the first half of the year, the income of Wanhua Chemical's polyurethane and petrochemical series products was 35.455 billion yuan and 39.575 billion yuan, a year-on-year increase of 8.19% and 9.53%, respectively.
Although revenue continued to grow, Wanhua Chemical's profitability declined. According to the company's first-quarter performance estimate, Wanhua Chemical achieved a net profit of 4.017 billion yuan attributable to shareholders of listed companies in the second quarter with revenue of 50.906 billion yuan, a year-on-year decrease of 11.03%. The company's sales gross margin of 16.41% and the net profit margin of 9.24% were also the lowest levels in recent years.
The fluctuation of raw material prices is one of the main reasons why Wanhua Chemical increased revenue but not profit in the first half of the year. Wanhua Chemical mentioned in the announcement that the average market price of one of the company's main raw materials, pure benzene, reached 8,652 yuan per ton in the first half of this year, a year-on-year increase of 24.35%. At the same time, in the first half of the year, affected by multiple factors such as the fluctuation of international crude oil prices and the insufficient downstream demand in the petrochemical industry, although the petrochemical industry has a slight recovery, the overall relatively low profit level of the industry has also to a certain extent lowered the profitability of the company's petrochemical products.
Although the company's profitability has fluctuated, a senior industry expert mentioned to Caixin reporters, "In terms of raw materials, the fluctuation of pure benzene, which had a large price fluctuation in the first half of the year, has now shown a price decline. At the same time, the second half of the year is the traditional peak season for a variety of chemical products. With the support of huge demand, the transmission of high-priced raw material costs to downstream will be more smooth, and product profitability will gradually improve."
In addition, the fine chemicals and new materials business of Wanhua Chemical is also a focus of industry insiders.
In the first half of this year, the company's fine chemicals and new materials series products achieved revenue of 12.979 billion yuan, a year-on-year increase of 15.23%. The company stated in the interim report that the operation of the Bisphenol A project further improved the market share and profitability of the company's polycarbonate industry chain; the exploration of emerging markets also increased the sales volume of ADIs. In addition, the company's 0.2 million ton/year POE project has been put into production, and the industrialization of new emerging businesses such as citral and flavors and fragrances is advancing.
"Fine chemicals have always been a product with relatively high profitability in the chemical industry. Products such as ADI and PC are important sources of profit for Wanhua Chemical's fine chemicals business. The commissioning of the Bisphenol A project and the expansion of the ADI market will expand the scale of the company's high-profit products, and with the commissioning of projects such as citral in the second half of the year and the gradual realization of the POE project, it will also contribute to the company's performance increase." said the aforementioned industry insider.