2024年华峰化学主要会计数据和财务指标 Translation: 2024 Major Accounting Data and Financial Indicators of Huafeng Chemical

During the reporting period, the company achieved stable growth in performance by optimizing the industrial chain layout, increasing R&D investment, and expanding the global market, laying a solid foundation for future development. As the leading company in the global spandex industry, Huafon Chemical's spandex production capacity and output rank second globally and first in China. The company's market share in the polyurethane original liquid field continues to expand, with products widely used in various industries such as footwear materials, furniture, and automotive parts. With the development of emerging fields such as 3D printing and new energy battery materials, the market demand for polyurethane original liquid is expected to grow further. Adipic acid is another core product of Huafon Chemical, widely used in nylon 66 fiber and polyurethane fields. In 2024, the company's adipic acid production capacity reached 1.355 million tons, with a capacity utilization rate as high as 94.96%, maintaining its global leading position.

1. Spandex Industry: Leading Position is Stable, Cost Advantages Await Release

As the world's second-largest spandex producer, Huafon Chemical currently has a capacity of 325,000 tons, with a capacity utilization rate of 109.98% in 2024, and an additional 150,000 tons of capacity under construction. In 2024, the company produced 357,000 tons of chemical fibers, sold 368,000 tons, and generated revenue of 9.05 billion yuan. However, due to industry-wide capacity expansion and weak demand, spandex prices declined throughout the year, leaving most companies in the sector at a loss. The company plans to leverage its 150,000 tons of capacity under construction and upstream integrated projects (including a 1.1 million-ton natural gas integration project and a 240,000-ton PTMEG project) to build a full industrial chain advantage from raw materials to finished products, which is expected to significantly reduce production costs.

National Spandex Industry Overview in 2024: Domestic spandex prices continued to bottom out, maintaining a unilateral downward trend and repeatedly hitting historic lows, with the majority of companies in the industry still struggling to turn losses into profits. In 2024, China's spandex production capacity reached 1.3545 million tons, a year-on-year increase of 9.3%, while spandex output was 1.045 million tons, up 11.3% year-on-year. Exports totaled 69,600 tons, a 13.2% year-on-year increase, while imports fell 4.8% to 47,900 tons. Apparent demand reached 1.012 million tons, up 10.3% year-on-year.

Global spandex industry situation: By the end of 2024, global spandex production capacity will increase to 1.75 million tons, with a year-on-year growth rate of 7%. The incremental contribution is concentrated in the Chinese mainland market, where new spandex production capacity totals 115,000 tons. Domestic spandex production capacity in China is 1.3545 million tons, a year-on-year increase of 9.3%, with the growth rate slightly narrowing compared to the previous year. Under the influence of multiple factors, some newly installed facilities have experienced delays and reduced investments.

Polyurethane raw materials: Industry integration accelerates, leading players gain higher market share

The subsidiary Huafeng New Materials is the largest polyurethane raw material production enterprise in China, with a current production capacity of 520,000 tons and a capacity utilization rate of 68.17% in 2024. In 2024, the company's production volume of chemical new materials is 657,000 tons, sales volume is 425,000 tons, and revenue is 5.84 billion yuan.

The national polyurethane raw material industry is showing a polarized situation: small and medium-sized sole raw material enterprises are being squeezed in their survival space due to insufficient demand and cost pressure, while leading companies are continuously consolidating their market position relying on technological and scale advantages, and the industry's concentration is expected to further increase.

3. Adipic Acid: Supply-Demand Imbalance Intensifies, Long-Term Potential Awaits Exploration

The subsidiary Chongqing Chemical is the largest adipic acid production enterprise in China, with a current production capacity of 1.355 million tons and a capacity utilization rate of 94.96% in 2024. In 2024, the company's basic chemical production volume is 1.68 million tons, sales volume is 1.366 million tons, and revenue is 10.47 billion yuan.

National Adipic Acid Industry Overview in 2024: Domestic adipic acid capacity remained at 4.1 million tons, an increase of 9.63% compared to the previous year; production reached 2.56 million tons, a year-on-year increase of 10.82%. However, downstream consumption of adipic acid was 1.92 million tons, up 9.71% year-on-year. The supply growth rate of adipic acid exceeded the downstream consumption growth rate, leading to a temporary supply-demand imbalance that exacerbated the downward price trend, resulting in continuously narrowing production profits. According to BaiChuan data, the industry's gross profit per ton in 2024 was -1,303 CNY/ton, a significant decline compared to -222 CNY/ton in 2023.

Currently, the adipic acid industry is in a phase of survival of the fittest, with further concentration of production capacity and an increasing degree of integration within the industry chain. In the future, with the gradual recovery of the economic environment and the introduction of industry-related support policies, downstream demand will be unleashed, and capacities in nylon, TPU, and PBAT will expand. Particularly, breakthroughs in domestic hexamethylenediamine (HMD) technology will bring a new growth point for nylon 66. Meanwhile, driven by national policies such as the plastic restriction order and environmental protection initiatives, there will still be significant capacity investments in PBAT. These two sectors will become the biggest drivers for the future growth of adipic acid product consumption.

Huafeng Chemical has always regarded technological innovation as its core competitiveness, with R&D investment reaching 809 million yuan in 2024, accounting for 3.01% of its operating revenue. The company has made significant progress in the research and development of high-end products such as bio-based spandex and ultra-low-temperature easy-to-set spandex, further consolidating its market share in the mid-to-high-end segment.

During the reporting period, Huafeng Chemical continued to advance its internationalization strategy by establishing subsidiaries in South Korea, Pakistan, India, and other places, further expanding its overseas markets. The export volume of the company's spandex products increased by 13.2% year-on-year. At the same time, the company also reduced the risks brought by the fluctuation of raw material prices through optimizing the layout of the global supply chain.

Major accounting data and financial indicators of Huafon Chemical in 2024

Production, sales, and inventory status of Huafon Chemical by product category in 2024