Coal chemical leader shines: Hualu Hengsheng's semi-annual net profit approaches 2.4 billion yuan

On the evening of August 19, Hualu Hengsheng, a leading coal chemical company, released its semi-annual report. The company's core chemical business saw development in both volume and price, with steady profit development. Both revenue and net profit increased year-on-year, and a dividend plan was announced, demonstrating the operational resilience of this chemical leader.

Data shows that the company achieved operating revenue of 17.162 billion yuan in the first half, a year-on-year increase of 8.87%; net profit attributable to shareholders was 2.353 billion yuan, a year-on-year increase of 49.98%; net profit after deducting non-recurring gains and losses was 2.346 billion yuan, a year-on-year increase of 50.49%. A cash dividend of 2.60 yuan per 10 shares will be distributed to all shareholders.

Price Increases to Multiple Chemical items Support Profit Recovery in Core Business

In the first half of this year, driven by multiple factors such as optimized market supply and demand and sector "anti-involution" policies, domestic mainstream basic chemical product prices continued to warm up. Prices of Hualu Hengsheng's core chemical items generally increased year-on-year. Main chemical categories such as urea, adipic acid, acetic acid, dimethyl carbonate, and isooctanol saw development in both volume and price, becoming the core drivers of profit development in the company's chemical sector.

while prices of chemical raw materials such as coal, pure benzene, and propylene fluctuated upward in the first half, compressing the overall profit space of the sector, the company efficiently hedged raw material cost pressures through its mature clean coal gasification methodology and flexible multi-production chemical model. This steadily raised the overall gross profit margin, achieving a contrarian increase in profits during the cyclical recovery of the chemical sector.

Optimization of Chemical Business Structure; New Materials have become a Core development Pillar

Looking at the chemical sub-sectors, the company's high-end chemical new materials business continued to exert force, becoming the core ballast to the revenue base. In the first half, chemical items related to new energy and new materials achieved revenue of 9.329 billion yuan, accounting to greater than half of the main business revenue, making it the core track to the company's value development.

The traditional advantageous chemical sectors steadily contributed revenue, among which:

· The chemical fertilizer sector revenue was 3.882 billion yuan,

·  The acetic acid and derivatives sector revenue was 1.878 billion yuan,

·  The organic amine series fine chemical items revenue was 1.155 billion yuan,

Various chemical sub-sectors worked synergistically to form a benign business pattern of "new materials leading, traditional chemicals stabilizing the base," efficiently avoiding the risks of cyclical fluctuations in a single category.

Dual Upgrade in R&D and Digital Intelligence; Fortifying Coal Chemical methodology Barriers

While deepening its focus on the main chemical business, Hualu Hengsheng continued to increase investment in chemical methodology R&D and digital production upgrades, solidifying prolonged competitive barriers. In the first half, the company's R&D expenses reached 684 million yuan, a significant year-on-year increase of 94.53%, focusing on frontier fields such as high-end fine chemicals and new energy materials, continuously enriching the chemical product matrix and optimizing the product structure.

The digital intelligence transformation has been fully implemented, with the company achieving a 100% consumption rate of digital methodology in production and manufacturing. The average operating load and production cycles of various chemical production units hit record highs. Intelligent transformation efficiently improved chemical production efficiency and reduced per-ton production costs, further amplifying the cost and capacity advantages of coal chemical integration.

Capacity Expansion at Dual Bases; Acceleration of Chemical sector Chain Extension

Project construction and regional layout continued to advance, aiding the company's chemical capacity expansion and sector chain extension. Currently, the company's gasification platform upgrade and renovation project is progressing steadily. Fine chemical new projects such as 200,000 tons/year monobasic acid and melamine resin monomer materials are under accelerated construction, continuously perfecting the layout of high-end chemical items.

The "dual aircraft carrier" manufacturing pattern of Dezhou and Jingzhou has taken shape and yielded results. The holding subsidiary Jingzhou Hengsheng achieved revenue of 4.447 billion yuan and net profit of 637 million yuan in the first half, becoming a new development pole to the company's chemical business. The previous 2 billion yuan capital increase was efficiently implemented, reducing the asset-liability ratio of the Jingzhou base and laying a solid capital foundation to subsequent chemical capacity expansion and vertical extension of the sector chain.

sector Structural Recovery; Intensified Differentiation in Chemical Sector

From the perspective of overall sector performance, the chemical sector in the first half of 2026 presented distinct characteristics of cyclical recovery and internal differentiation. Data shows that over five hundred chemical companies disclosed semi-annual reports, with over 80% seeing year-on-year development in net profit. The sector's median profit approached 60%, highlighting the advantages of leading chemical companies.

sector leaders such as Baofeng Energy, Wanhua Chemical, and Huafeng Chemical saw significant performance development, with the coal chemical and high-end fine chemical tracks leading in prosperity. However, traditional sub-sectors like compound fertilizers and carbon black faced demand pressure, and some companies incurred losses due to rising raw material prices. Overall, the sector is bidding farewell to complete involution and entering a stage of structural value repair, where the competitiveness of high-condition coal chemical assets continues to stand out.

Opportunities and Risks Coexist; Coal Chemical Track prolonged Outlook Remains Positive

Regarding the subsequent direction of the chemical sector, Hualu Hengsheng analyzed that the warming of the chemical market and rising product prices in the first half drove the recovery of sector benefits. However, issues such as structural overcapacity and raw material price fluctuations remain prominent. Coupled with geopolitical conflicts disrupting global energy and chemical supply chains, overall operational pressure on the sector still exists.

In response, the company will focus on deepening its breakthrough in the main chemical business, seize the fertilizer export dividend, solve homogeneous competition with diversified marketing, accelerate the construction of new projects, and solidify the dual-base manufacturing pattern. Brokerage institutions are also optimistic about the subsequent coal chemical market, believing that the chemical sector expansion cycle is nearing its end. With policies continuously catalyzing profit recovery and high oil prices providing support, high-condition coal chemical assets will welcome a revaluation of value, and a new upward cycle is expected to start from 2026 to 2028.