On the evening of July 8, Wanhua Chemical released its 2021 semi-annual performance forecast. It is expected to achieve net profits attributable to shareholders of listed companies in the first half of 2021. It will be 13.4 billion yuan to 13.6 billion yuan, an increase of 373% to 380% compared with the same period last year.
As we all know, Wanhua Chemical was founded in 1998. Its main business is polyurethane (MDI, TDI, polyurethane, Ether polyols), ethylene, propylene and its downstream petrochemical products such as HDPE, LLDPE, PP, PVC, acrylic acid, propylene oxide, SAP, TPU, PC, PMMA, organic amines, ADI, water-based coatings and other fine chemicals and new R&D, production and sales of materials.
Regarding the changes in performance, Wanhua Chemical stated that in the first half of 2021, the Yantai MDI device completed technical transformation and expansion of 1.1 million tons/year, and the company’s MDI production capacity further increased. Improvement, new equipment such as million tons of ethylene were put into operation, and the output and sales of major products increased year-on-year. In addition, as the global COVID-19 epidemic eases, demand in the downstream market improves; some chemical plants in overseas areas are affected by factors such as extreme weather, resulting in tight global supply and rising prices of chemical raw materials. The company’s main products have increased in volume and price compared with the same period last year, and operating results in the first half of the year have increased significantly year-on-year.
The previous quarter showed that Wanhua Chemical achieved revenue of 31.312 billion yuan, a year-on-year increase of 104.08%; net profit was 6.621 billion yuan, a year-on-year increase of 380.82%. Among them, the total revenue of the three major series of polyurethane, petrochemicals, fine chemicals and new materials reached 28.834 billion yuan, accounting for 92.09% of the total revenue. The operating income of the polyurethane segment was 13.758 billion yuan, the operating income of the petrochemical segment was 12.060 billion yuan, and the operating income of the fine chemicals and new materials segment was 3.017 billion yuan. In contrast, Wanhua Chemical’s net profit and growth rate in the second quarter basically maintained the profit level and growth rate in the first quarter.
It is understood that at the end of February this year, Wanhua Chemical’s MDI device in Yantai Industrial Park has completed technical transformation, and its annual production capacity has increased from 600,000 tons to 1.1 million tons.
Wanhua Chemical’s MDI production capacity has thus increased to 2.6 million tons, accounting for nearly 30% of the global market share, making it the world’s largest MDI manufacturer. International chemical giants such as Covestro and BASF are direct competitors of Wanhua Chemical.
MDI is the most important raw material for the production of polyurethane. Polyurethane is widely used in the home furnishing field and is the main raw material for the production of sponges, memory foam, foam plastics, imitation wood materials, adhesives and other materials.
Since June last year, MDI prices have been skyrocketing. MDI is the flagship product of Wanhua Chemical’s polyurethane segment. As one of Wanhua Chemical’s three main businesses, the polyurethane segment accounts for more than 40% of the company’s total revenue. The company’s other two major businesses are petrochemical series and fine chemicals and new materials.
In the first half of this year, MDI prices experienced a roller coaster ride due to global supply constraints caused by severe cold weather in the United States. In March this year, the listing price of Wanhua Chemical Polymer MDI in the domestic distribution and direct sales markets reached 28,000 yuan per ton, an increase of nearly 40% from the beginning of the year. This undoubtedly brought certain gains to the company’s performance.
In addition, in recent years, Wanhua has continued to strengthen strategic cooperation with upstream and downstream enterprises. On July 7, Wanhua Chemical and Dongfang Yuhong signed a strategic cooperation agreement in Beijing. Mr. Li Limin, Vice President of Wanhua Chemical, and Mr. Xiang Jinming, Executive President of Oriental Yuhong, and other leaders attended the signing ceremony. The two parties reached a consensus on establishing a long-term and stable strategic partnership. For Wanhua, this strategic cooperation can provide better services to major downstream customers, while continuing to consolidate the MDI and polyether markets and grasp market trends.
</p
