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Finance Association, August 19 (Reporter Wu Chao) Jiangsu Thorpe (600746.SH), a leading domestic acetic acid company, released its semi-annual report this evening. The company stopped the decline in performance over the past two years and turned a loss into a profit in the first half of this year. A CIFA reporter learned that although prices for acetic acid products were still low in the first half of the year, the company benefited from increased production and sales and lower production costs.

According to financial reports, Jiangsu Thorpe achieved operating income of about 3.193 billion yuan in the first half of 2024, an increase of 30.98% over the previous year; net profit attributable to shareholders of listed companies was about 0.117 billion yuan, and losses for the same period last year were about 0.256 billion yuan, turning a year-on-year loss into a profit.

In addition, the company's cash flow situation also improved significantly. Net cash flow from operating activities in the first half of the year was $0.155 billion, compared to -5.75 million yuan (after adjustment) in the same period last year.

Jiangsu Thorpe's main business includes products such as acetic acid and derivatives, sulfuric acid, chlor-alkali, and ADC foaming agents. In particular, acetic acid and derivatives rank among the highest in the industry. The company said in its financial report that in the first half of the year, although downstream demand for the company's main product acetic acid and derivatives fell short of expectations, it was generally stable. The price of coal, the main raw material, declined year-on-year, and the production and sales volume of acetic acid, the main product, increased, and costs declined. Chlor-alkali and sulfuric acid products were generally superior to the same period last year. Against the backdrop of increased production capacity and insufficient demand in the industry, the market showed a medium to low adjustment trend.

According to the company's main operating data for the second quarter of 2024, the price range of acetic acid from April to June was 2397-2,886 yuan/ton. Affected by factors such as market supply and demand, the price of acetic acid products dropped slightly year-on-year. The April-June price range of ethyl acetate was 5168-6150 yuan/ton, which also declined year-on-year.

Wind data also shows that compared to the past two years, the overall domestic acetic acid price was low this year. Prices hovered around 3,000 yuan/ton during the first half of the year, while last year's high was over 5,000 yuan/ton. Recently, however, there has been a slight increase. The latest spot price is about 3,200 yuan/ton.

Despite price fluctuations, the production and sales volume of Jiangsu Thorpe's main products have increased significantly. From January to March 2024, acetic acid and derivatives produced 0.3775 million tons and sold 0.3256 million tons; April-June produced 0.4472 million tons and sold 0.3925 million tons. In contrast, January-March 2023 produced 0.2755 million tons and sold 0.2262 million tons; April-June produced 0.1854 million tons and sold 0.1653 million tons.

In addition, Jiangsu Thorpe also announced this evening that its wholly-owned subsidiary Jiangsu Thorpe New Material Technology Co., Ltd. (hereinafter referred to as “Thorpe New Material”) intends to sign a “Transfer Agreement with Effective Conditions for the Ethylene Acetate Process Technology License” (hereinafter referred to as the “Agreement”) with Jiangsu Thorpe New Material, the controlling shareholder of the company, to purchase Thorpe Group's existing vinyl acetate process technology license.

According to reports, in the past, Thorpe Group purchased technical licenses for the vinyl acetate process from DuPont in the US. However, due to many factors, the project was not put into construction. In 2023, the company decided to invest in the construction of the “Ethylene Acetate and EVA Integrated Project” through its wholly-owned subsidiary Thorpe New Materials. Therefore, Thorpe New Materials now plans to sign the above agreement with Thorpe Group to build and put into operation a set of vinyl acetate production plants using this technology.

According to the assessment, the market value of the vinyl acetate process technology license is $0.202 billion (tax included). Based on this, the transfer price of this transaction is also proposed to be 0.202 billion yuan (tax included, ultimately based on the assessed value registered by the state-owned assets supervisory authority), and Thorpe's new materials will be paid with its own funds and self-raised funds.

Jiangsu Thorpe said that after the completion of this transaction, Thorpe's new materials will obtain the source of vinyl acetate technology with low production costs, low energy consumption, high product quality, and stable and reliable operation, in line with the layout of the “14th Five-Year Plan” for the high-end development of the chemical industry in Jiangsu Province.