Incident 1: In December 2024, the company reviewed and passed the “Proposal on the Company's Share Repurchase Plan”, agreeing that the company would use a total capital of 10-20 million yuan to repurchase the company's RMB common shares (A shares) through centralized bidding transactions, of which the special loan amount should not exceed 14 million yuan.

Share buybacks will be used for employee stock ownership plans or equity incentives.

Incident 2: In December 2024, Changhua Chemical and Dow signed a memorandum of understanding on strategic cooperation. The two sides will jointly promote the development of high-performance, sustainable and environmentally friendly polyurethane materials. Cooperation focuses on using captured carbon dioxide to replace some petrochemical raw materials, accelerate the transformation of related R&D results into products, and expand the markets of world-renowned car manufacturers. The cooperation aims to achieve the dual goals of innovation and sustainable development, and further expand the influence of the two sides in the field of new materials.

New production capacity was put into operation, and the company's performance increased: In the first three quarters of 2024, the company achieved operating income of 1.658 billion yuan (+3.6% YoY), net profit of 0.09 billion yuan (+57.7% YoY), and net profit of 0.079 billion yuan (YoY +65.5%) after deducting non-attributable net profit of 0.079 billion yuan (YoY +65.5%). Among them, 2024Q3 achieved operating income of 0.734 billion yuan (YoY +9.4%, -8.2% month-on-month), net profit of 0.008 billion yuan (YoY -76.8%, month-on-month +149.2%), and net profit of 0.002 billion yuan after deducting non-return to mother (-94.1% YoY, +155.9% month-on-month).

Focus on the main polyether industry and strategic cooperation to help green development: Changhua Chemical focuses on the polyether industry chain to promote business collaboration and continuously enhance market competitiveness through the triple advantages of “core technology, high-quality customers, and continuous innovation”. 1) Industrial chain advantages: The company is deeply involved in the field of polyether, developed a number of core technologies in product formulations, production processes, etc., and built a complete industrial chain from polyether production to downstream application in combination with falling epoxy prices and the commissioning of new POP projects; 2) Technical advantages: The company's products have stable quality, low odor, low VOC, etc., which significantly enhances market competitiveness, combined with carbon dioxide capture technology in cooperation with Dow to promote the industrialization of new high-performance environmentally friendly polyurethane materials; 3) Customer resources and brand advantages: the company, major automobile OEMs, and multinational chemicals High-quality customers such as enterprises and well-known home furnishing brands have established stable cooperation, high customer loyalty and strong brand recognition. In addition, the 0.18 million-ton POP project was completed and accepted in September 2024, further improving supply capacity. The strategic cooperation with Dow will further expand the market space for green environmentally friendly materials and inject new momentum into future development.

Profit forecast and investment rating: Due to oversupply in the polyether industry, the company's product price spread was weak, and the company had no additional production capacity investment in the short term. We lowered the company's 2024-2025 net profit of 0.052 and 0.058 billion yuan (previously estimated 0.151 and 0.153 billion yuan), respectively, and added a forecast of 0.061 billion yuan for 2026, according to the closing price on December 27, 2024, corresponding to PE differences in 2024-2026 45, 40, 38 times Considering the excellent quality of the company's products and competitive advantage in the polyether segment, the carbon dioxide polyether project continues to advance and maintains a “buy” rating.

Risk warning: the risk of macroeconomic fluctuations, the risk of fluctuations in raw material prices, the risk of increased market competition and changes in demand, and the risk of projects under construction falling short of expectations.