Huntsman (HUN) Gains on Downstream Expansion, Acquisitions

Core Viewpoint - Huntsman Corporation is focusing on growing its downstream specialty and formulation businesses while facing challenges from demand softness and pricing pressure [2][8]. Company Performance - The company's shares have declined by 8.6% over the past year, compared to a 6.1% decline in its industry [1]. - Huntsman is experiencing headwinds from demand softness and significant de-stocking in 2023, particularly in Europe and China [4][11]. Business Strategy - Huntsman is shifting its MDI business from components to differentiated systems, which typically have higher margins and lower volatility [2]. - The company is benefiting from synergies from acquisitions, with strong liquidity and balance sheet leverage allowing for continued development and expansion [3]. Financial Performance - The acquisitions of CVC Thermoset and Gabriel Performance Products are contributing positively to EBITDA in the Advanced Materials segment [3]. - The company realized over $280 million in run rate savings by the end of 2023 and expects additional cost-improvement opportunities in 2024 [10]. Market Conditions - Demand conditions in Europe weakened due to high natural gas prices, while demand in China was affected by reduced economic growth and lower construction activities [4]. - The company is facing pricing pressure, with lower selling prices impacting its top line and a less favorable supply-demand environment contributing to falling MDI prices [5]. Future Outlook - The Polyurethanes segment is well positioned for long-term growth due to a focus on high-value differentiated downstream products [9]. - The company expects around $60 million in cost optimization benefits in 2024, excluding inflation [10].