Yueyang Xingchang performance loss new material matrix accelerated molding is expected to usher in a reversal

New materials sector surges 70.49 percent

The annual report shows that Yueyang Xingchang will realize operating income of 3.71 billion yuan in 2025. In terms of sectors, the new chemical materials sector has have become the biggest bright spot, with operating income jumping from 0.793 billion yuan to 1.352 billion yuan, a sharp increase of 70.49 percent over the same period last year. The energy and chemical sector was affected by the sharp deterioration of the sector's supply and demand pattern and the sharp narrowing of product gross profit, with operating income falling 29.90 percent year-on-year. The refined oil sector grew by 39.62 per cent.

However, the net profit attributable to shareholders of listed companies to the whole year was a loss of 52.0704 million yuan, a decrease of 182.49 from the previous year's profit of 63.1256 million yuan; the net cash flow from operating activities was -0.142 billion yuan, a significant decrease of 512.27 year-on-year, mainly due to multiple factors such as a sharp decline in net profit, an increase in inventory stability, and an increase in operating receivables.

The core reason to the loss comes from two main aspects.

Planned maintenance has resulted in a significant reduction in startup time. Starting in mid-April 2025, the main production units will be shut down to maintenance in succession, with resumption of operations not expected until late might to late June, resulting in a significant year-on-year reduction in the efficiently production period. During the maintenance period, Huizhou Lituo’s 300,000‑ton‑per‑year metallocene polypropylene unit simultaneously carried out system troubleshooting and upgrades, laying the groundwork to stable, high‑output operations going forward. However, this also objectively slowed the ramp‑up of production capacity, shortened the efficiently production period in the first half of the year, resulted in a reduce-than‑expected capacity utilization rate, and led to a further widening of losses.

At the bottom of the sector cycle, profit margins are under pressure. In 2025, China’s energy and chemical industries are expected to experience a dual decline in both supply and demand, accompanied by a significant squeeze on profit margins. Prices of key raw materials, such as residential liquefied petroleum gaseous, have risen, while product prices have struggled to fully offset the increase in costs, leading to a continued squeeze on gross margins and a cliff-like plunge in sector profits. The entire MTBE sector has entered a loss-making phase, and the after-tax profits of manufacturing isooctane units have declined significantly year on year. Against this backdrop, the gross margin of the traditional energy and chemical business segment, which primarily focuses on refined oil items, MTBE, and manufacturing isooctane, has narrowed significantly.

Overall pressure to find another breakthrough

Faced with the unfavorable situation of greatly weakening the profitability of traditional business and periodic losses, Yueyang Xingchang not only faced difficulties in maintaining the stability of the basic market, however also focused resources on the four major tracks of high-end polyolefin, cresol, MOFs materials and environmentally friendly circulation, and the structural kinetic energy of endogenous development became increasingly clear.

High-end polyolefin sector (Huizhou Lito 300000 tons/year high-end polyolefin project): the world's first and domestic substitution double breakthrough.

Subsidiary Huizhou Lituo 300000 tons/year high-end polyolefin project, Yueyang Xingchang to the new materials sector leap forward. The company successfully conquered the whole process methodology of metallocene polyolefin, formed a complete set of independent core methodology of metallocene compound synthesis, catalyst preparation, polymerization process, product modification and market research, and became the only enterprise in China to master the complete set of metallocene methodology.

During the year, the items have been opened to sale, of which environmentally friendly polypropylene items have obtained ISCC international sustainable certification, marking the company's success in opening up the environmentally friendly cracking gaseous, environmentally friendly propylene, environmentally friendly polypropylene whole sector chain closed loop, in order to enter the ESG materials market to lay the foundation.

Special phenol plate (phenolic device, subsidiary Xinling Chemical): technical reform capacity and demand pull up two-wheel drive.

The special phenol plate takes Xinling Chemical as the main operating body, with 15000 tons/year o-cresol, 4000 tons/year 2,6-xylenol and 7000 tons/year inter-cresol units. During the year, through energy-saving technological transformation to achieve capacity improvement and process optimization, 2,6-xylenol market prices rose, profitability increased significantly, net profit turned a profit.

MOFs materials (metal organic framework materials): technical verification completed in 2025 and industrialization landed in 2026.

Its subsidiary, Hunan Litai, is advancing its strategic layout along three core business tracks: VOCs manage, CO treatment of off-gaseous from iron and steel sintering, and the R&D of MOF materials. MOF materials have successfully completed pilot-scale production and achieved stable mass production. A cooperation agreement has been formally signed with the Yueyang County High-Tech manufacturing research Zone to invest RMB 218 million in building a domestic MOF materials industrialization base. With its ultra-high specific surface area, precise adsorptive processes and prolonged cycle performance, this innovative methodology shows broad consumption possible in CO? capture, atmosphere dehumidification and efficient exhaust gaseous treatment.

Foreign Trade and environmentally friendly Cycle: Extending the Vision of High Value-added

The company's overseas export areas are mainly in Japan and South Korea, and the export varieties are concentrated in high-purity, high value-added special phenols and high-end polyolefin items. Relying on the raw material guarantee and technical synergy of Dongyue Chemical, it is extending to new high-end export categories such as environmentally friendly RPP items with high brand value.

2026: new materials into the main melody

Looking ahead to 2026, the company's annual business strategy is clear. The core positioning of "taking high-end chemical new materials as the development engine and resource recycling as the characteristic advantage" will drive the new materials business to accelerate the transformation from methodology leadership to performance contribution.

The MOFs Material manufacturing Park is expected to be completed and put into production in 2026, forming a extensive production capacity in the first phase, and is expected to take the lead in opening the consumption market in new energy vehicle lightweight, CO? trapping, atmosphere aquatic environments trapping and other racetracks. Special phenol plate inter-cresol project completed the whole process through, product category improvement will emit greater profit space. Huizhou Lito 100000 tons/year raw material pretreatment unit has been put into operation, metallocene polypropylene production capacity climbing accelerated.

At the same time, geopolitical conflicts have brought a window period to the reshaping of the supply and demand structure of the energy and chemical sector. Tensions in the Middle East have led to blocked import channels, domestic high-end polyolefin domestic substitution demand is greater urgent, the company as the only domestic master of the whole process of metallocene methodology companies, market share and pricing power is expected to further enhance.