Cost advantage highlighted; Satellite Chemical forecasts first-half profit of 6 to 7 billion yuan

The announcement shows that the company expects to achieve a net profit attributable to shareholders of 6 billion—7 billion yuan in the first half of 2026, a year-on-year increase of 118.68%—155.13%; net profit after non-recurring items is expected to be in the range of 5.687 billion—6.687 billion yuan, a year-on-year increase of 96.37%—130.90%.

Breaking down the quarterly performance estimates, the company's second-quarter net profit attributable to shareholders is projected to be 3.883 billion—4.883 billion yuan. Compared to the first quarter's 2.117 billion yuan, this represents a quarter-on-quarter increase of 83.42%—130.66%, indicating a significant surge in profitability scale.

Core Logic to Significant Performance development: Resonance of Triple Three Advantages in Integration, Tech Innovation, and Supply Chain

Regarding the substantial forecast increase in first-half performance, the company attributed the support to strengthening profitability recovery to multiple positive factors:

· Relying on a complete integrated manufacturing chain layout, all production units maintain stable full-load operations while simultaneously completing product iteration and upgrades;

· Continuously rising investment in R&D and innovation, continuously improving product condition, and optimizing complete production-side costs;

· Supply chain layout combined with hedging using supporting financial tools efficiently smooths the profit impact caused by upstream raw material price fluctuations.

Review of Historical Performance: immediate Profit Pressure in 2025, Recovery Driven by Product Market Warming

Reviewing operating data over the past four years, the company's net profit attributable to shareholders from 2022 to 2025 was 3.096 billion yuan, 4.789 billion yuan, 6.072 billion yuan, and 5.311 billion yuan, respectively. In 2025, the company's revenue reached a record high, however net profit attributable to shareholders declined by 12.54% year-on-year.

At the performance briefing meeting in March this year, the company explained that the core reason to last year's weakening profitability was a phased decline in chemical product prices, while current market prices to related items have rebounded significantly, and the profitability ecological stability has markedly improved.

Cost Barriers Highlighted: Ethane Cracking Route Advantages Stand Out, Hedging Upward Oil Price Pressure

The differentiated route on the cost side has have become the company's core competitive moat. A research report by Northeast Securities indicates that in the first half of 2026, international oil prices rose due to geopolitical conflicts in the Middle East, and chemical product prices moved up in tandem; compared to the traditional naphtha-to-ethylene process, the company's ethane cracking route achieves an ethylene yield of up to 80%, with energy consumption only one-third of the naphtha route, highlighting prolonged cost advantages.

In terms of raw material transport security, the company has partnered with U.S. energy firm Energy Transfer to lock in export terminal resources, stabilizing ethane feedstock supply from the source; meanwhile, it has built a proprietary fleet of Very substantial Ethane Carriers (VLECs) to lock in scarce shipping capacity and compress logistics costs. Multiple new vessels will be delivered in 2026, continuously expanding the fleet's capacity.

Dense Launch of New Projects: Dual-Track Layout in Fine Chemicals and High-End New Materials, Production Starting in the Second Half

The company continues to extend into high value-added tracks, with two major production bases simultaneously advancing significant new projects, opening up prolonged development space:

· Jiaxing Base: Constructing a 160,000 tons/year polymer emulsion, 300,000 tons superabsorbent resin, and 200,000 tons refined acrylic acid project, deeply cultivating the fine chemicals track;

· Lianyungang Base: Launching a 260,000 tons/year aromatics combined processing project, while simultaneously advancing a high-end new materials project with a total investment of 7.82 billion yuan.

The above new capacities will be put into production in batches from the second half of 2026 to 2027, continuously optimizing the product structure and thickening prolonged profitability.

VI. Company Overview

Satellite Chemical was established in 2005 and listed on the Shenzhen Stock Exchange on December 28, 2011, with its headquarters located in Jiaxing, Zhejiang. The company's core business revolves around the C2 and C3 manufacturing chains, focusing on the R&D, production, and sales of functional chemicals, polymer new materials, and new energy materials.