Huafon Chemical Co. (002064) Q2 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 reached ¥13.74 billion, up 8.89% year-over-year, with net profit attributable to shareholders rising 11.74% to ¥1.52 billion and basic EPS at ¥0.31, a 14.81% increase year-over-year.

• Segment performance was mixed: chemical fiber and new chemical materials revenue declined slightly, while basic chemical products surged 42.38% year-over-year.

• Gross margin for industrial products was 16.45%, with chemical fiber at 14.97%, new chemical materials at 21.78%, and basic chemical products at 15.45%.

• Cash flow from operations dropped 37.16% year-over-year to ¥740 million, mainly due to increased cash outflows for goods procurement.

Financial highlights

• Total assets at June 30, 2024, were ¥37.67 billion, up 6.08% from year-end 2023; net assets attributable to shareholders rose 3.13% to ¥25.70 billion.

• Operating profit increased 15.66% year-over-year, and profit before tax rose 15.27%.

• R&D investment remained stable at ¥479 million, and financial expenses decreased due to higher interest and exchange gains.

• Non-recurring gains totaled ¥63.27 million, mainly from government subsidies and financial asset gains.

Outlook and guidance

• The company will continue to focus on stable operations, technological innovation, and quality improvement, aiming to accelerate integrated development in the polyurethane industry.

• No interim dividend, bonus shares, or capital increase from reserves is planned for the half-year.