Sinostar PEC (C9Q) H1 2025 earnings summary

Executive summary

• 1H25 revenue fell 10.2% YoY to RMB2,640.4m; gross profit declined 61.9% to RMB101.6m and net profit fell 67.0% to RMB57.8m, primarily due to insufficient market demand and lower gross profit.

• 2Q25 revenue was RMB1,333.9m, down 9.6% YoY; quarterly net profit was RMB12.7m versus RMB87.0m in 2Q24.

Financial highlights

• 1H25 profit before tax was RMB73.6m, down 68.6% YoY; income tax expense was RMB15.8m versus RMB59.1m in 1H24.

• 1H25 other income was RMB3.6m, including RMB1.2m interest income, RMB1.8m scrap disposal proceeds and RMB0.3m government grants.

• Administrative expenses fell to RMB18.5m from RMB21.9m; distribution costs rose to RMB7.2m from RMB3.6m, mainly on higher doorstep deliveries.

• Finance costs declined to RMB5.8m from RMB12.3m as borrowings decreased; depreciation was RMB86.5m versus RMB85.9m in 1H24.

Outlook and guidance

• Over the next 12 months, capacity growth outpacing downstream demand is expected to intensify competition, lift inventories and pressure gross margins; high-end polypropylene demand is expected to benefit from new-energy vehicles and green consumption.

• Priorities include monitoring market conditions, differentiating products, developing high-end products and investing in technology; no cash dividend was declared for 2Q25 amid market uncertainty and funding-risk considerations.