HUALU-HENGSHENG(SH:600426) Changjiang Securities·2025-08-25 09:22Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company reported a revenue of 15.76 billion yuan in the first half of 2025, a year-on-year decrease of 7.1%, and a net profit attributable to shareholders of 1.57 billion yuan, down 29.5% year-on-year. The second quarter of 2025 saw a revenue of 7.99 billion yuan, a year-on-year decrease of 11.2% but a quarter-on-quarter increase of 2.8% [6][11] - The company plans to distribute a cash dividend of 0.25 yuan per share (before tax) [6] - The report highlights a mixed performance in product prices, with some products experiencing price increases while others saw declines. The overall gross margin improved to 19.6%, up 3.3 percentage points quarter-on-quarter [11] Summary by Sections Financial Performance - In the first half of 2025, the company achieved a revenue of 15.76 billion yuan, with a net profit of 1.57 billion yuan and a net profit excluding non-recurring items of 1.56 billion yuan. For Q2 2025, revenue was 7.99 billion yuan, with a net profit of 860 million yuan, reflecting a quarter-on-quarter increase of 21.9% [6][11] - The company’s gross margin for Q2 2025 was 19.6%, with a net profit margin of 12.0% [11] Market Dynamics - The report notes a differentiation in product prices, with urea prices increasing by 5.0% while other products like adipic acid and acetic acid saw declines of 10.8% and 9.1%, respectively [11] - The company’s sales volume for organic amines, chemical fertilizers, and acetic acid increased by 8.1%, 19.6%, and 11.4% respectively in Q2 2025 [11] Future Outlook - The company is positioned at the bottom of the cycle, with expectations for gradual improvement in operations as downstream demand continues to recover and outdated capacity is eliminated. New projects in the Jingzhou base are expected to contribute to long-term growth [11] - The company is actively expanding into fine chemicals and new materials, with ongoing projects expected to enhance its competitive strength [11]