Wuhan Youji (2881) H1 2024 earnings summary

Executive summary

• H1 revenue rose 30.7% YoY to RMB1,651.2m, while gross profit increased 0.6% to RMB186.7m and net profit rose 7.9% to RMB48.0m. Lower selling prices supported volume and market share but compressed margins.

• Toluene oxidation products drove growth; weaker chlorination-product demand and thinner margins limited profit expansion.

Financial highlights

• Revenue was RMB1,651.2m, up 30.7% YoY; gross profit was RMB186.7m, up 0.6%.

• Profit before tax increased to RMB63.4m from RMB58.5m; net profit was RMB48.0m versus RMB44.5m, up 7.9%.

• Basic and diluted EPS rose to RMB0.63 from RMB0.59.

• Other income and gains rose to RMB30.7m from RMB11.0m, mainly due to higher input VAT surplus deduction.

Outlook and guidance

• Phase I of Hubei Xinxuanhong Production Plant, with designed capacity of 40,000 tonnes, was expected to commence production in H2 2024.

• Priorities include process and energy efficiencies, cost control, developing domestic and overseas markets, and closer supplier relationships; management expects revenue and profits to continue improving with economic recovery and easing inflation.