Wanhua Chemical: h1 Revenue of RMB 90.9 Billion (~USD 12.73 Billion)! Profit Down 25%

On August 11, Wanhua Chemical announced that in the first half of the year, it achieved operating revenue of RMB 90.901 billion (~USD 12.73 billion), a year-on-year decrease of 6.35%; net profit attributable to shareholders of the listed company was RMB 6.123 billion (~USD 0.86 billion), down 25.1% year-on-year. In Q1, revenue was RMB 43.068 billion (~USD 6.03 billion), down 6.70% year-on-year; net profit attributable to shareholders was RMB 3.082 billion (~USD 0.43 billion), down 25.87% year-on-year.

Among them, sales revenue from polyurethane series products was RMB 36.88779 billion (~USD 5.16 billion); petrochemical series products and trade revenue was RMB 34.93356 billion (~USD 4.89 billion); fine chemicals and new materials series revenue was RMB 15.62807 billion (~USD 2.19 billion).

Reasons for Performance Fluctuations by Core Business

Polyurethane Business

Affected by slow overseas investment recovery, demand in overseas building energy-saving and other sectors was weaker than expected. This directly impacted Wanhua's core products MDI (methylene diphenyl diisocyanate) and TDI (toluene diisocyanate). In Q1, raw material cost fluctuations and sluggish demand were also issues, compounded by export tariffs that reduced orders and impacted performance.

• Pure MDI: Downstream demand remained weak, with an average market price of about RMB 18,800/ton (~USD 2,632/ton).
• Polymeric MDI: Weak demand from refrigeration and construction industries, impacted by export tariffs; average price about RMB 16,700/ton (~USD 2,338/ton).
• TDI: Automotive industry demand grew, home furnishing demand was average; average price about RMB 12,400/ton (~USD 1,736/ton).
• Flexible foam polyether: Average price about RMB 7,800/ton (~USD 1,092/ton).

Recently, global TDI supply has been volatile: Covestro’s 300,000 t/a TDI unit faced force majeure; Mitsui Chemicals’ Omuta plant had a chlorine leak, causing an emergency shutdown; major domestic producers are undergoing maintenance shutdowns. TDI prices have rebounded from RMB 11,000/ton (~USD 1,540/ton) in early July to RMB 15,900/ton (~USD 2,226/ton) on July 21, up more than 40%. Every RMB 1,000/ton (~USD 140/ton) increase in TDI price can boost Wanhua's profit by RMB 830 million (~USD 116 million).

Petrochemical Business

Falling petrochemical product prices further squeezed margins. In h2, large-scale capacity releases of olefins and other products caused a phase imbalance in supply and demand.

Over the past five years:

• Ethylene capacity rose 59%, output rose 51.2%. This year, 9 new units are expected, adding 7.9 million t/a.
• Propylene capacity rose 55%, output rose 44.2%. This year, 15 new units are expected, adding 10.57 million t/a.

On April 3, 2025, Wanhua’s 1.2 million t/a ethylene unit at the Yantai Industrial Park successfully produced on-spec product. Phase II synergizes with Phase I, producing 617,400 t/a ethylene, 340,900 t/a propylene, plus 400,000 t/a POE and 250,000 t/a LDPE high-end polyolefins.

To counter the downturn, Wanhua has strengthened refined operations to boost profitability: h2 operating costs were RMB 78.319 billion (~USD 10.96 billion), down 3.47% YoY; administrative expenses RMB 1.177 billion (~USD 165 million), down 17.11%; financial expenses RMB 598 million (~USD 83.7 million), down 46.09%.

Fine Chemicals and New Materials

Supported by China’s “new quality productive forces” strategy and demand from emerging industries like new energy, this business segment grew steadily.

• Advancing next-gen MDI technology, expanding capacity, and improving energy efficiency.
• Expanding special isocyanate capacity (IPDI, HDI), including acquiring Vencorex’s special isocyanate business in France via BorsodChem.
• On June 23, announced expansion of IPN from 55,000 t/a to 100,000 t/a and IPDA from 50,000 t/a to 100,000 t/a, completing the IP–IPN–IPDA–IPDI chain.

Other R&D progress:

• Feb 2025: Launched bio-based 1,3-butanediol for moisturizers and solvents.
• April 2025 Chinaplas: Debuted PSU/PPSU polysulfone materials and PEBA elastomers.
• April 27, 2025: 100,000 t/a battery-grade lithium iron phosphate project approved; 4th-gen LFP mass-produced, 5th-gen released.
• Aug 8, 2025: 50,000 t/a optical-grade MS resin unit started up successfully.
• Aug 2025: Launched high-value tert-butylamine (TBA), extending the special amine value chain.

Global Position and Expansion

Despite profit decline, Wanhua remains a top-tier global chemical company. h2 net cash flow was RMB 10.528 billion (~USD 1.47 billion), up 2.3% YoY. In the 2025 “Top 50 Global Chemical Companies” list by C&EN, Wanhua ranked 15th globally.

In May, Wanhua founded Yantai Wanhe Fragrance Co., Ltd., expanding into the fragrance industry. Recently, it established three more companies, covering five major sectors.

Reference

[1]. https://static.sse.com.cn/disclosure/listedinfo/announcement/c/new/2025-08-12/600309_20250812_ZJ8M.pdf