Financial Associated Press, October 25th (Reporter: Chen Kang) Leading dye company zhejiang longsheng group (600352.SH) released its third quarter report tonight. The net profit in the third quarter was 0.451 billion yuan, a year-on-year increase of 320.82%, with a larger growth rate compared to the second quarter.

The financial report shows that the company achieved revenue of 10.61 billion yuan in the first three quarters, a year-on-year decrease of 2.03%; the net profit attributable to shareholders of the listed company was 1.353 billion yuan, a year-on-year increase of 50.52%. Among them, the net profit in Q1 decreased by 42.52% year-on-year, and in Q2 it increased by 57.21%.

Zhejiang Longsheng's main business includes textile chemicals (mainly dyes and additives) and intermediate chemicals (mainly meta-phenylenediamine and hydroquinone), holding a leading position in the global market. Financial Associated Press reporters noted that in the first three quarters, the company's product sales volumes all increased year-on-year, with dye, additive, and intermediate sales volumes increasing by 4.74%, 10.29%, and 15.16% respectively compared to the same period last year.

The dye industry entered a downturn in the second half of 2021, with intense market competition continuing, leading to a continuous reduction in industry profits. In the first three quarters, the downward trend in the selling prices of the company's main products did not improve, resulting in a 2.55% year-on-year decrease in dye revenue, which accounts for over 50% of the total income. Additive and intermediate revenues, however, increased.

From the trend chart of major raw material prices, it can be seen that the prices of raw materials for disperse dyes such as aniline and para-nitroaniline have decreased, but the purchasing prices of major raw materials for domestic reactive dyes are stable or slightly increasing.

In terms of costs, the company's operating costs in the first three quarters decreased by 41.1 million yuan compared to the same period last year, while sales expenses increased by 24.34 million yuan, management expenses decreased by 30.425 million yuan, and research and development expenses increased by 17.783 million yuan.

Zhejiang Longsheng believes that the company's main dye business can leverage industry leadership and cost advantages in intense competition. In the first three quarters, the company's sales gross margin was 28.61%, a year-on-year increase of 2.34 percentage points.

By the middle of this year, Zhejiang Longsheng has a dye production capacity of 0.3 million tons per year, approximately 0.1 million tons per year of additive capacity, ranking first in the global market. The company has an intermediate capacity of 0.1195 million tons per year, and extends to other fine chemicals as the core of an integrated industry chain. The projects under construction include a 0.02 million tons per year H acid project and a 9,000 tons per year meta-aminophenol project. The first phase of the H acid project with a capacity of 5,000 tons has entered the trial production stage, and the first phase of the meta-aminophenol project with a capacity of 5,000 tons has been put into operation.

On August 24 this year, the company's controlling shareholder adjusted the shareholding increase plan. One of the controlling shareholders, Chairman and General Manager Ruan Weixiang, on top of the original plan to increase the company's shares by 0.2-0.4 billion yuan within 6 months starting from June 25, 2024, will additionally acquire 39 million shares of the 2020 employee stock ownership plan and 17 million shares of the 2021 employee stock ownership plan through block trading within 3 months starting from September 18, 2024. The expected amount is between 0.45 billion to 0.55 billion yuan.