Wuhan Youji (2881) investor relations material

Executive summary

• H1 revenue fell 2.2% YoY to RMB1,408.1m; gross profit rose 60.3% to RMB261.3m and net profit increased 126.6% to RMB87.7m.

• Higher selling prices and tighter supply lifted margins, while prudent volume management and slower downstream procurement reduced sales volumes.

Financial highlights

• Cost of sales fell to RMB1,146.9m from RMB1,277.2m; profit before tax rose to RMB115.8m from RMB47.5m.

• Other income and gains declined to RMB20.5m from RMB28.4m, mainly on lower government grants; other expenses rose to RMB13.7m from RMB1.9m, largely on FX losses.

• Administrative expenses increased to RMB55.8m from RMB50.1m; R&D expenses fell to RMB67.2m from RMB72.7m as a photochemistry project entered validation.

• Income tax expense rose to RMB28.1m from RMB8.8m; the effective tax rate increased to 24.3% from 18.5%.

• Net cash from operating activities was RMB70.5m versus RMB2.5m; investing cash outflow was RMB87.1m and financing cash inflow was RMB37.6m.

Outlook and guidance

• H2 outlook is cautiously optimistic; supply contraction and elevated costs may support industry conditions, while the durability of demand recovery remains uncertain.

• Revenue and profit are expected to improve as macro-recovery pressure eases and operating initiatives take effect.

• Hubei Xinxuanhong Phase II is progressing as planned; some capacity is expected online in H2 2026, with remaining capacity phased through 2029.

• Priorities include low inventory, flexible maintenance and capacity allocation, prudent pricing and volume management, wider global sales coverage, higher-value R&D, and cost and energy-efficiency improvements.