Wanhua's first-quarter net profit fell by more than 50% YoY.

On April 25, Wanhua Chemical released its first quarter 2020 report. In the first quarter of 2020, the Company achieved operating income of RMB15.34 billion, down 3.8% YoY, and net profit of RMB1.38 billion, down 50.7% YoY.
epidemic factors affect the first quarter performance pressure
affected by the outbreak, the company's first quarter polyurethane products sales decreased by 8.7% YoY, Shandong region polymer MDI first quarter average price of 12705 yuan / ton, down 9.2% YoY, aggregate MDI average gross margin was yoY The average price of pure MDI was RMB16,416/tonne in the first quarter, down 24.4% YoY, while the average gross margin was down 33.2% YoY, resulting in a 22.7% .
petrochemicals business, product prices decreased significantly compared with the same period last year, with prices of propylene, epoxy propane, MTBE, butanol, acrylic and acrylates falling by 14.7% and 12.7% year-on-year, respectively. 3%, 17.8%, 20.3%, 18.2% and 18.9%, but overall revenue grew 35.8% as the company's first-quarter sales grew 60.4% year-on-year. Fine Chemicals and New Materials business, sales in the first quarter increased 15.4% year-on-year, but overall revenue was 8.5% due to falling product prices.
MDI market does not need to be pessimistic about the future growth expectations
this year by the impact of the epidemic, domestic MDI market prices are relatively weak, the current price in Shandong and East China about 11000-12000 yuan / ton, pure MDI east China prices fell to 13300-13800 yuan / ton. In the future, domestic MDI supply will tighten, Shanghai Union Heng 590,000 tons of equipment in May has maintenance plans, other manufacturers will also reduce supply in May, while pure MDI inventory level is high, but storage conditions are high, while the current downstream demand is poor, so even after the restart of the maintenance of the MDI device after the start of the load is still difficult to significantly improve, the future domestic aggregate MDI market spot tight situation or continuation. Downstream refrigerator freezer manufacturers have improved the progress of resumption of production, pure MDI downstream soles of raw liquid, slurry, spandex manufacturers in Zhejiang, more seriously affected. At the same time by the impact of the collapse in international oil prices, upstream raw material prices are facing greater pressure, we believe that domestic MDI prices in May in the context of changes in the structure of supply and demand, there is a possibility of rebounding upward.
ethylene project put into operation in 2020 the industrial chain further extended
company's first phase of 1 million tons of ethylene project will be put into operation in the fourth quarter of 2020. Shandong Yantai City Ecological Environment Bureau released Wanhua Chemical Group Co., Ltd. polyurethane industry chain integration - ethylene phase II project environmental impact assessment of the first public announcement, will be built 1.2 million tons / year of ethylene and downstream integration project, the project to tartan oil, mixed butane as raw materials, by 1.2 million tons / year ethylene cracking The solution device produces olefins, aromatics and downstream products, including ethylene cracking, cracking gasoline hydrogenation, aromatic pumping, butylene, high density polyethylene, low density polyethylene, polyolefin plastic body/elastomer, polypropylene and other devices, as well as supporting public works and auxiliary production facilities.
with the first phase of the 1 million tons of ethylene project in 2020, the company will start to build the second phase of ethylene project, further extend the upstream industrial chain, and achieve a rich diversification of downstream products. The construction of ethylene project is conducive to perfecting the integration of polyurethane industry chain in Wanhua Yantai Industrial Park, solving the need for raw materials ethylene oxide and epoxy propane in the production process of polyether polyols in industrial park, and can consume hydrochloric acid, a by-product of isocyanate industry chain, and promote the balanced development of the industry. In addition, the project also uses the most advanced international technology and Wanhua independent research and development of environmental protection law PO/ SM epoxy propane production technology, will create the highest level of ethylene industry chain, to fill the gaps in the domestic field, breaking the monopoly of foreign technology.
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