Sinostar PEC (C9Q) H2 2024 earnings summary

Executive summary

• FY2024 product sales volume rose 7.93% to 1.09m tonnes and revenue increased 2.3% to RMB5.46bn; net profit fell to RMB231.67m from RMB313.17m amid weaker product margins and lower non-recurring income.

• Cost and efficiency initiatives reduced average processing cost per tonne at Dongming Hengchang by 12.42% and Dongming Qianhai by 9.25% YoY; R&D spending increased RMB10.91m.

Financial highlights

• Revenue RMB5.458bn, up from RMB5.333bn; gross profit RMB380.76m, down from RMB400.06m; net profit RMB231.67m, down from RMB313.17m.

• Operating profit RMB322.75m vs RMB447.38m; profit before tax RMB309.43m vs RMB419.07m; income tax expense RMB77.76m vs RMB105.90m.

• Operating cash flow RMB404.64m vs RMB463.55m; investing cash outflow RMB261.35m, including RMB286.80m paid for the additional Qianhai stake.

• Revenue growth reflected volume gains, while gross profit declined 4.83% as lower overall margins reflected insufficient demand and competition.

Outlook and guidance

• FY2025 priorities are stable operations, lean management, value creation, and strengthening market position through quality products and competitive pricing.

• FY2025 sustainability targets include maintaining or reducing energy intensity, maintaining current GHG intensity, and maintaining full environmental compliance.

• Developed high-modulus polypropylene grades HC810 and HC830 for new-energy vehicle materials; propylene-butene and ternary copolymer products entered trial production.