Wuhan Youji (2881) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 22.7% YoY to RMB3,284.2m; net profit increased 68.8% to RMB123.0m, supported by higher toluene oxidation product sales and other income.

• Gross profit grew 20.2% to RMB396.3m, while gross margin eased to 12.1% from 12.3%, reflecting weaker trading margins.

Financial highlights

• Revenue was RMB3,284.2m versus RMB2,677.1m; gross profit was RMB396.3m versus RMB329.8m.

• Profit before tax increased to RMB159.1m from RMB94.7m; net profit was RMB123.0m versus RMB72.9m.

• Other income and gains rose to RMB74.1m from RMB25.5m, including RMB48.8m of income-related government grants; input VAT surplus deduction and relocation compensation also supported the increase.

• R&D expense increased to RMB138.0m from RMB100.0m, with seven new R&D projects; finance costs rose to RMB37.4m from RMB32.3m.

Outlook and guidance

• FY2025 growth drivers include Phase I capacity coming online, continued market-share expansion, higher-value product development, export-network growth, and cost and efficiency initiatives.

• Phase II at Hubei Xinxuanhong is expected to start construction in H2 2025; some capacity is expected to operate in 2026, with the remainder phased through 2029.

• Phase I, with 40,000 tonnes annual fine-chemical capacity, began operating at end-2024; its new products are expected to support revenue growth in 2025.

• Management expects revenue and profit to continue improving, assuming economic recovery and easing inflation.