Chengzhi Co., Ltd. Receives Research from Changjiang Securities on 3.9 Billion MMA/PMMA Project with a Construction Period of 2.5 Years

On May 19, Chengzhi Co., Ltd. (hereinafter referred to as "Chengzhi Shares") received a survey from specific investors organized by Changjiang Securities. Zuo Hao, Vice President and Secretary of the Board of Directors, and Li Kun, Representative of Securities Affairs, participated in the reception and communicated with investors on issues of concern such as the progress of the company's new projects, business advantages, and cost control.

Core Content Update of the Research Survey

A new MMA/PMMA project with an investment of RMB 3.9 billion has a construction period of 2.5 years, with funding sourced from internal funds and self-raised financing.

Regarding investors’ concerns about the progress of the ethylene value chain extension and high-end optical new materials project, the company stated that the project includes 60,000 tons/year of n-propanol, 200,000 tons/year of methyl methacrylate (MMA), and 100,000 tons/year of polymethyl methacrylate (PMMA). The expected construction period is 2.5 years, with a total investment of approximately RMB 3.901 billion, funded by the company’s own capital and self-raised funds.

The three major advantages of coal-based MTO operations are becoming increasingly evident, with costs lower than those of oil-based and gas-based routes.

The company’s coal-to-MTO business enjoys significant competitive advantages. First, it achieves direct pipeline supply within the Nanjing Chemical Industry Park, creating barriers in both supporting infrastructure and logistics. Second, it relies on coal resources to build a stable feedstock supply chain, free from the volatility of international oil and gas prices. Third, it adopts advanced coal-power-chemicals integration technology, with its own power generation system and highly efficient gasification process. Against the backdrop of persistently high naphtha prices, its unit production cost is significantly lower than that of oil-based and gas-based routes.

Strong risk resistance of butadiene production from C4s, making full use of MTO by-products

Regarding the butadiene business via the C4 route, the company noted that this pathway is not affected by the shift toward lighter cracking feedstocks and therefore has relatively strong resilience against risks. At the same time, leveraging its existing capacity advantages, the company can fully utilize C4 by-products from MTO units, achieving efficient resource utilization.

The product pricing mechanism is clear, and industrial gases adopt a fixed income + cost transfer model.

The company stated that the pricing of industrial gas products mainly adopts a fixed return plus cost pass-through model, while the pricing of liquid chemical products such as ethylene and propylene is mainly determined according to prevailing market prices, allowing for flexible responses to market fluctuations.

Multi-dimensional Methanol Cost Control to Ensure Supply Chain Stability

In terms of methanol raw material cost control, the Company, based on its own methanol production capacity, has expanded its raw material supply sources through diversified procurement channels both domestically and internationally, and has effectively ensured supply chain stability and strengthened raw material cost and operational risk management by entering into long-term supply agreements, carrying out hedging activities, and flexibly adjusting inventory strategies.

The ultra-high-molecular-weight polyethylene project has successfully completed trial production.

The company stated that the ultra-high molecular weight polyethylene project successfully completed trial production in February 2026, and will proceed with related work based on market conditions.