Yuxin shares will have a revenue of 3.444 billion yuan in the first half of 2025, with 240000 tons of the world's largest maleic anhydride plant put into operation.

Financial Performance Reflects Industry Dilemma

yuxin's financial data for the first half of 2025 profoundly reflects the structural challenges facing China's maleic anhydride industry. The company's total operating income was 3.444 billion yuan, down 7.62 percent from the same period last year, while its net profit was only 21.7557 million yuan, down 89.24 percent from the same period last year, and its net profit margin fell to a historical low of 0.63 percent. This sharp decline in performance has become a microcosm of the operating difficulties of the entire maleic anhydride industry.

The complexity of the problem can be seen from the differentiation performance at the subsidiary level: Huizhou Yuxin Chemical achieved a net profit of 70.1442 million yuan and Huizhou Yuxin New Material achieved a net profit of 19.0437 million yuan, but the newly put into production Huizhou Boke Environmental Protection New Material lost 60.2428 million yuan and its operating income was 0.362 billion yuan. The loss of the new unit is mainly due to the commissioning cost in the initial stage of production and the price pressure during the market cultivation period, which reflects the high risk of new production capacity in the current market environment.

More critical industry data show that as of June 2025, the annual output of domestic maleic anhydride can reach 3.566 million tons, but the national output in the first half of the year is only 791900 tons, and the capacity utilization rate is less than 50%. This data reveals the severe reality that the maleic anhydride industry is mired in overcapacity, and price competition has become white-hot.

From an international perspective, the plight of China's maleic anhydride industry has typical capacity cycle characteristics. The high prosperity of the past few years has prompted a large influx of capital, leading to a rapid expansion of supply capacity, while demand growth is relatively lagging, resulting in the current imbalance between supply and demand. For overseas traders, this imbalance creates price arbitrage opportunities, but also increases supply chain uncertainty.

Strategic logic and technical layout of contrarian expansion

in the context of the overall downturn in the industry, Yuxin shares counter-trend expansion strategy worthy of in-depth analysis. The company's 240000 tons/year maleic anhydride plant was successfully put into production, with a product purity of 99.9, higher than the national standard, and the current device is running stably. The device has become the world's largest single set of maleic anhydride device, so that the company's total production capacity of 390000 tons/year, established the market position of the largest maleic anhydride manufacturer in South China.

The business logic of this layout is reflected in three dimensions: first, the scale effect, the total production capacity of 390000 tons and the original production line to form a significant synergy effect, the unit fixed cost is greatly reduced, in the environment of fierce price competition to build a cost advantage. The second is the consolidation of technical advantages, the device uses the company's own research and production of butane maleic anhydride catalyst, the use of n-butane oxidation process, not only improve production efficiency, but also produce a large amount of steam to bring additional income, forming a technical barrier.

More importantly, the company simultaneously put into production 500 tons/year maleic anhydride catalyst and 1500 tons/year copper catalyst project. This vertical integration layout enables Yuxin shares to achieve independent control in the core technology links, reduce dependence on external suppliers, and lay a solid foundation for long-term competitive advantage.

From the perspective of the development trend of the global chemical industry, technological autonomy and scale are the key elements to deal with cyclical fluctuations. Yuxin's strategy is similar to the development path of international chemical giants, building competitive barriers through technological innovation and scale expansion.

Industrial chain extension and value chain reconstruction

in the face of fierce competition in the maleic anhydride industry, Yuxin shares have adopted a differentiation strategy extending to the upstream and downstream of the industrial chain. The successful commissioning of the 100000 tons of maleic anhydride granulation project has not only broadened the sales area, but more importantly, increased the added value of products and customer stickiness. The granulation process makes maleic anhydride products more suitable for long-distance transportation and automated processing, creating conditions for the company to explore overseas markets.

The company has made a major breakthrough in the application of its own research and development of downstream products, and has planned to build two downstream product production units. The strategic significance of this industrial chain extension strategy is reflected in two aspects: one is to effectively digest the internal maleic anhydride production capacity and reduce the dependence on the external market; the other is to significantly increase the added value of products and improve the overall profit structure.

From the perspective of value chain analysis, the downstream products of maleic anhydride include unsaturated polyester resin, succinic anhydride, 1,4-butanediol, etc. The demand for these products in automobile, building materials, textile and other fields is relatively stable, and the gross profit margin is generally 2-3 times higher than that of maleic anhydride. Through the integration of the industrial chain, the company can better grasp the price transmission mechanism and maintain relatively stable profitability when raw material costs fluctuate.

For overseas supply chain practitioners, this integrated model provides more stable supply security and more flexible product portfolio options, but may also face the problem of single supplier risk concentration.

Market restructuring and investment strategy recommendations

at present, China's maleic anhydride market presents obvious structural surplus characteristics, with an annual production capacity of 3.566 million tons corresponding to less than 50% of the capacity utilization rate, resulting in a serious imbalance between supply and demand. From the demand side of the analysis, the traditional downstream unsaturated polyester resin, plasticizer and other areas of growth slowed down, while biodegradable materials, specialty chemicals and other emerging applications have not yet formed a scale effect.

In terms of the evolution of the technical route, the n-butane oxidation method has gradually become the mainstream process, which has significant advantages such as low raw material cost and by-product steam compared to the benzene oxidation method. Tighter environmental protection policies will accelerate the elimination of backward production capacity. It is expected that the industry will usher in a period of integration in the next 2-3 years, and market concentration is expected to increase significantly.

Geographically, East China and South China have become the focus of maleic anhydride consumption by virtue of the advantages of downstream industrial agglomeration. With the promotion of the "double carbon" goal, the construction of green chemical industry park will reshape the industrial layout, and enterprises with advanced technology and environmental protection standards will get more development opportunities.

Investment strategy recommendations: In the short term (6-12 months), the price of maleic anhydride will remain low volatility, it is recommended to focus on the fourth quarter of the traditional demand season price repair opportunities. In the medium-term outlook (1-3 years), as the marginal relationship between supply and demand improves, leading companies will gain a larger market share by virtue of cost and technology advantages.

For overseas traders, it is recommended to focus on leading technology, scale advantages of obvious head enterprise products, for industrial investors, can focus on the layout of downstream high value-added products, especially biodegradable materials, specialty chemicals and other sub-sectors. At the same time, paying attention to the market opportunities of the countries along the "Belt and Road", China's maleic anhydride exports have increased year by year, providing a basis for overseas expansion.

Risk Warning: We need to be alert to the potential impact of large fluctuations in raw material prices, unanticipated tightening of environmental protection policies and lower-than-expected downstream demand on industry earnings.