Chemical industry leader Wanhua Chemical's revenue in the first three quarters reached hundreds of billions

With all the price hikes of chemical raw materials this year, it took only three quarters for Wanhua Chemical, the leading chemical company with a market value of 300 billion yuan, to exceed the scale of 100 billion yuan in revenue in one fell swoop.

On October 19, Wanhua Chemical disclosed its three-quarter report. In the first three quarters of this year, it achieved revenue of 107.318 billion yuan, a year-on-year increase of 117.99%; net profit was 19.54 billion yuan, a year-on-year increase of 265.32%. Among them, the net profit in the third quarter was 6.011 billion yuan, a year-on-year increase of 139.13%.

On the whole, since the beginning of this year, benefiting from the economic recovery, the recovery of downstream demand, the boom of the chemical industry, the two sub-sectors of chemical raw materials and chemical products have achieved high growth, and most of the companies in the sector have achieved outstanding performance in the first three quarters.

In terms of quarters, Wanhua Chemical's single-quarter revenue this year exceeded 30 billion yuan, and it is increasing quarter by quarter. However, in the third quarter, the company’s net profit attributable to shareholders of listed companies was only 6.011 billion yuan. Although it was still high, it was inferior to the 6.621 billion yuan and 6.909 billion yuan in the previous two quarters. Especially in the third quarter, operating income exceeded the second quarter by about 3.3 billion yuan and exceeded the first quarter about 8.8 billion yuan.

Regarding changes in performance, Wanhua Chemical said that during the reporting period, global vaccine inoculation has continued to repair consumption and manufacturing in major economies, and the supply of basic energy is tight, and prices have risen significantly, which has promoted the increase in prices of major chemical products.

In terms of the sales of main products, during the reporting period, Wanhua Chemical was both prosperous in production and sales. In the first three quarters, it produced 2.973 million tons of polyurethane series, sold 2.9061 million tons, and realized operating income of 44.096 billion yuan; produced 2,775,900 tons of petrochemical series and sold 7.702 million. Tons, realized operating income of 42.69 billion yuan; produced 552,300 tons of fine chemicals and new material series, sold 532,700 tons, and realized operating income of 10.803 billion yuan.

It is worth noting that the price of MDI, the main product of Wanhua Chemical, is currently still in an upward channel. Prior to September 29, Wanhua Chemical issued an announcement stating that since October this year, the listing price of Wanhua Chemical’s polymer MDI distribution market in China is 23,000 CNY/ton (up 2400 CNY/ton from September's price). The listing price is 23,000 CNY/ton (up 2400 CNY/ton from the September price); the pure MDI listing price is 23,800 CNY/ton (no change compared with September).

In addition, in 2021, Wanhua Chemical will complete the technical renovation and expansion of the 1.1 million tons/year MDI plant in Yantai, which will effectively guarantee the market supply of MDI. In addition, the company’s new equipment such as one million tons of ethylene has been put into production, and the production and sales of petrochemical products have increased year-on-year. With good quality and stable supply of fine chemicals, the market competitiveness has been enhanced.

The company is actively deploying the new material industry and has sufficient growth momentum. The company actively improves the industrial chain, deploys new materials, and coordinates the development of the three major sectors to ensure the company's growth momentum. The company's polyurethane segment has developed steadily and brought sufficient cash flow; the petrochemical segment is making efforts, and the release of production capacity brings new profit growth points; the new material segment actively enters the battery and degradable materials fields to drive the company's long-term growth.

In April 2020, the company acquired Yantai Zhuoneng Lithium Battery Co., Ltd. The Yantai lithium-ion battery R&D pilot project is expected to be put into operation in 2021; at the same time, the 10,000-ton lithium battery ternary cathode material project at the Meishan base is expected to be completed and put into operation by the end of 2021. After the completion of the project, the company's product structure in the field of lithium batteries will be more complete, with a richer product range, and the future development space is worth looking forward to. The company is growing from a leading MDI to a leading comprehensive chemical industry. With the improvement of the industrial chain layout and the increase in product categories, the cyclicality is expected to weaken.