Investment Rating - The report maintains a "Buy" rating for Wanhua Chemical [1][7][17] Core Views - The company's Q2 performance shows signs of stabilization, with expectations for a cyclical recovery in the industry [5][11] - In H1 2025, the company achieved total revenue of 90.901 billion yuan, a year-on-year decrease of 6.35%, and a net profit attributable to shareholders of 6.123 billion yuan, down 25.10% year-on-year [4][5] - The polyurethane sector is expected to improve profitability due to rising TDI and MDI prices, while the petrochemical segment faces challenges from oversupply [5][6] Summary by Sections Financial Performance - In Q2 2025, the company reported revenue of 47.833 billion yuan, an 11% increase quarter-on-quarter, with net profit of 3.04 billion yuan remaining stable [5] - The company’s second ethylene unit with a capacity of 1.2 million tons/year has successfully commenced operations [6] Business Segments - The polyurethane industry shows stable demand, particularly in the new energy and high-end manufacturing sectors, driven by the lightweight requirements of electric vehicles [5] - The fine chemicals and new materials segments are experiencing steady growth, with ongoing product and capacity releases contributing to revenue stability [5][6] Future Outlook - The company is expected to see EPS of 4.3, 5.34, and 6.29 yuan for 2025, 2026, and 2027 respectively, indicating a positive growth trajectory [7][8] - The report anticipates a revenue growth rate of 10.91% in 2025, with further increases in subsequent years [8][13]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [1] Core Insights - The company is a global leader in polyurethane and is transitioning into a new materials platform enterprise, having expanded its business scope significantly since its inception in 1978 [8] - In 2024, the company achieved a revenue of 182.07 billion yuan, a year-on-year increase of 3.8%, while the net profit attributable to shareholders decreased by 22.5% to 13.03 billion yuan due to impairment losses and increased costs [4][10] - The company is expected to improve its asset quality and profitability in the future as it completes its impairment provisions [4] Summary by Sections Main Business Performance - The company reported a revenue of 182.07 billion yuan in 2024, with a year-on-year growth of 3.8%, while the net profit attributable to shareholders was 13.03 billion yuan, down 22.5% [4][10] - In Q1 2025, the company generated a revenue of 43.07 billion yuan, a decrease of 6.7% year-on-year but an increase of 25.0% quarter-on-quarter [4] - The company’s main business segments, including polyurethane, petrochemicals, fine chemicals, and new materials, showed varying growth rates, with sales volumes increasing by 15.3%, 15.9%, and 27.7% respectively in 2024 [4][10] Future Growth Prospects - The company is advancing several construction projects, including a 700,000-ton/year expansion in Fujian expected to be operational by Q2 2026, and a new 330,000-ton/year TDI facility expected to start production in May 2025 [4][10] - The company is also forming a joint venture to invest in a 1.6 million-ton/year specialty polyolefin project, which is anticipated to enhance its international presence [4][10] Financial Forecast - The company is projected to achieve net profits of 13.88 billion yuan, 17.15 billion yuan, and 19.98 billion yuan for the years 2025, 2026, and 2027 respectively, reflecting growth rates of 6.5%, 23.6%, and 16.5% [4][10] - The earnings per share (EPS) are expected to be 4.42 yuan, 5.46 yuan, and 6.36 yuan for the same years [4][10]