Wanhua Chemical issued 12 announcements disclosing its annual report for the first half of 2021, asset transfers and other matters

Net profit in the first half of the year was 13.53 billion yuan, an increase of 377.21% year-on-year

In the first half of 2021, Yantai MDI plant completed 1.1 million tons/year technical reform and expansion, the company's MDI capacity was further improved, and new plants such as megaton ethylene were put into operation, and the output and sales of major products increased year-on-year. In addition, with the easing of the global new crown epidemic, the downstream market demand improved; some overseas chemical plants were affected by extreme weather and other factors, resulting in global supply tension and rising prices of chemical raw materials. The company's main products increased in volume and price compared to the same period last year, and the operating results in the first half of the year increased significantly.

During the reporting period, the company achieved operating revenue of 67.657 billion yuan, up 118.91% compared with the same period of the previous year; operating profit of 16.141 billion yuan, up 382.54% compared with the same period of the previous year; net profit attributable to shareholders of the listed company of 13.530 billion yuan, up 377.21% compared with the same period of the previous year.

Wanhua Chemical also announced that it intends to transfer the assets related to the ethylene industry chain and its associated debts, liabilities and labor force to its wholly-owned subsidiary, Wanhua Chemical (Yantai) Petrochemical Company Limited (hereinafter referred to as "Petrochemical Company"). As of May 31, 2021, the book value of the assets related to the ethylene industry chain to be transferred was RMB 11,071 million, of which the net book value of the assets was RMB 1,871 million and the book value of the liabilities was RMB 9,200 million. The personnel involved in this transfer will be taken over by a wholly-owned subsidiary in accordance with the principle of "people follow the assets".

In order to meet the needs of Petrochemical Company to apply for bank loan credit and to carry out normal business, Wanhua Chemical intends to increase the guarantee amount of 12 billion RMB for Petrochemical Company as joint and several liability guarantee.

It is understood that Petrochemical Company is a wholly-owned subsidiary of Wanhua Chemical, established in 2015. As of June 30, 2021, the main financial data of Petrochemical Company: total assets of 16.668 billion yuan, net assets of 5.655 billion yuan, main business income of 22.730 billion yuan and net profit of 2.801 billion yuan in the first half of the year.

Wanhua said that the transfer of assets is based on the needs of the overall development strategy, integration of internal resources, in order to improve the operational efficiency of assets, create a unique industrial cluster of petrochemical business, extend the industrial chain downward in depth, achieve the integration advantages and optimal allocation of resources, Wanhua Chemical transferred the assets related to the ethylene industry chain to Petrochemical Company, which will assume the production, operation and sales functions of petrochemical series products.