Wanhua Chemical’s 2025 Revenue Exceeds RMB 200 Billion While Net Profit Remains Under Pressure

On March 16, Wanhua Chemical released its 2025 annual earnings preview. The announcement showed that in 2025, the company recorded total operating revenue of RMB 203.235 billion, up 11.62% year on year, crossing the RMB 200 billion mark for the first time; attributable net profit reached RMB 12.527 billion, down 3.88% year on year; attributable net profit after non-recurring items reached RMB 12.144 billion, down 9.10% year on year; and basic earnings per share came in at RMB 3.99, down 3.86% year on year. From the figures disclosed in the earnings preview, the most notable feature of Wanhua Chemical’s 2025 performance is that revenue continued to grow, while profit has not yet recovered in parallel.

Wanhua Chemical gave a relatively clear explanation for the source of revenue growth. The company stated that during the reporting period, multiple new units were successfully put into operation, while it continued to expand its global market presence and improve local overseas delivery and technical service capabilities, allowing volume growth to offset the impact of falling prices. In other words, the main drivers behind revenue surpassing RMB 200 billion for the first time in 2025 were new capacity releases, higher sales volumes, and overseas market expansion, rather than a broad-based improvement in product prices.

The picture on the profit side was quite different. In the announcement, Wanhua Chemical explicitly stated that attributable net profit declined year on year due to falling chemical product prices. This statement is broadly consistent with the overall environment in the chemical industry in 2025. For most chemical companies, recovering sales volumes and newly ramped-up units can support revenue, but when product price levels remain weak, margin recovery tends to lag behind revenue recovery. In Wanhua’s case, this means that although the company continued to expand its operating scale, pricing remained the primary factor weighing on profitability.

Looking at the quarterly trend, fourth-quarter 2025 performance was significantly stronger than that of the first three quarters. Based on already disclosed results for the first three quarters and the full-year earnings preview, Wanhua Chemical’s attributable net profit in the fourth quarter of 2025 was approximately RMB 3.37 billion, up about 11% from the third quarter and also showing a notable improvement from the fourth quarter of 2024. Public reports have generally viewed the growth in single-quarter profit in the fourth quarter as the more positive part of Wanhua Chemical’s 2025 results. This means that while full-year profit still declined year on year, operating conditions showed a certain degree of marginal improvement in the fourth quarter.

That improvement was related to the rebound in prices of isocyanates and other products. As a major global producer of MDI and TDI, Wanhua Chemical’s earnings elasticity is highly correlated with prices of related products. In the second half of 2025, some overseas facilities were affected by force majeure and maintenance, while industry-wide maintenance also reduced supply temporarily, pushing up prices for products such as TDI. The earnings preview itself did not provide a detailed product-by-product profit breakdown, but based on public market analysis, the profit improvement in the fourth quarter was directly linked to the stabilization and rebound in prices of some core products. For Wanhua Chemical, this means that 2025 was not a year of continuous pressure in every quarter; at least from the fourth quarter onward, some core businesses had already begun to show signs of staged recovery.

Even so, from a full-year perspective, Wanhua Chemical still did not escape the pattern of “higher revenue but lower profit,” which is also why the market is paying close attention to what this says about the company’s position in the cycle. Revenue exceeding RMB 200 billion for the first time shows that the company’s capacity expansion, global footprint, and product line extensions are still advancing; continued pressure on profit shows that even a leading company cannot fully avoid earnings pressure during a downward pricing cycle. For a large integrated chemical company that already has global competitiveness, scale expansion can come from new units coming online and rising sales volumes, but profit improvement still depends on the combined recovery of product prices, cost control, and overall industry conditions.

Changes in capital expenditure have also been a key focus for analysts in recent research reports. Multiple brokerage reports have noted that Wanhua Chemical’s construction-in-progress balance has already declined from previous levels. In the chemical industry, slower capital expenditure often means that the pace of new supply additions is becoming more moderate, and future depreciation pressure may also ease. From an operational perspective, this type of change does not directly mean that an earnings inflection point has already arrived, but it is often viewed by the market as an auxiliary signal that the industry may be in the bottom area of the cycle. In other words, Wanhua Chemical’s current financial performance on the one hand reflects continuing scale expansion, and on the other hand shows that the company has begun entering a phase that places greater emphasis on investment efficiency and quality of earnings.

After entering 2026, market views on Wanhua Chemical have been influenced by a new variable, namely the impact of the Middle East situation on the energy and chemical chain. On March 7, Wanhua Chemical had already invoked a force majeure clause regarding supply of related products to the Middle East. According to Reuters and domestic media reports, because shipping routes through the Strait of Hormuz were severely disrupted, the company faced either an inability to deliver or unreasonable safety risks for cargoes bound for the Middle East, and therefore applied force majeure arrangements to the affected contracts, orders, and delivery obligations. This announcement shows that geopolitical conflict has already begun to have a direct impact on the company’s actual deliveries and regional market operations.

The changes caused by the Middle East situation do not stop at logistics. Since early March, international oil prices have risen sharply, driving up the prices of chemical raw materials and some chemical products. Public market information shows that polymeric MDI prices have risen notably from the beginning of the year, while TDI has remained at a high level. Against this backdrop, the 2026 outlook for the chemical market has begun to diverge. Some analysts believe that rising oil prices and supply disruptions will help push up chemical product prices and thereby improve profitability. Others argue that the current price increases are driven more by cost pressure and risk premiums, while downstream demand has not improved in tandem, leaving uncertainty over whether profits can really recover. For companies such as Wanhua Chemical, which have a relatively high level of upstream integration, higher prices naturally support product profitability, but they also bring multiple pressures involving logistics, deliveries, raw-material procurement, and volatility in global markets.

From the perspective of the industrial chain, what the market is more concerned about now is a stalemate in which “upstream is unwilling to shut for maintenance, while downstream is unwilling to fully resume production.” Some publicly available institutional views point out that when oil and chemical prices rise rapidly, upstream companies often prefer to hold back sales in expectation of even higher prices, while downstream companies, because end-market orders have not recovered in parallel, are reluctant to fully restart production under high costs and instead remain on the sidelines. This means that rising prices may not smoothly translate into broader profit improvement across the industry, and may instead lead to a widening profit divergence between upstream and downstream. For Wanhua Chemical, as one of the core upstream chemical leaders, it is theoretically better positioned to maintain relative initiative in a volatile pricing environment, but that does not mean its operating environment in 2026 has already become easier.

From the capital market’s reaction, Wanhua Chemical’s 2025 earnings preview has not fundamentally changed investors’ overall view of the industry cycle. The reason the market is still willing to continue following the company is, on the one hand, that its global leadership in MDI, TDI, and other areas remains unchanged, and on the other hand, that the fourth quarter of 2025 already showed marginal improvement, while chemical prices have risen again in early 2026, giving the market some expectation of earnings recovery. Public information shows that multiple institutions have still assigned buy ratings to Wanhua Chemical over the past 90 days, indicating that at this stage, the market’s focus has shifted from simply looking at the 2025 results toward whether price trends, supply-demand changes, and the recovery in profits can continue through 2026.

Taken together, the signals released by Wanhua Chemical’s earnings preview are relatively clear. First, the company’s operating scale continued to expand, with 2025 revenue exceeding RMB 200 billion for the first time, showing that capacity release and globalization remain effective. Second, the profit side has not yet fully shaken off the impact of the industry’s low-cycle conditions, and the overall structure still reflects rising revenue but pressured earnings. Third, some degree of improvement has already appeared in the fourth quarter, indicating that prices and operating momentum for certain core products are recovering. Fourth, after entering 2026, the Middle East situation, oil price volatility, and shipping risks have brought new uncertainty to the chemical industry, which means Wanhua Chemical’s earnings outlook now contains both room for recovery and risks of renewed volatility. Put differently, the 2025 earnings preview looks more like the result of the previous cyclical bottom phase, while the key issue for 2026 is whether rising prices can truly be translated into sustained profit improvement.