Ningbo Changhong Polymer Technology Co., Ltd. (short name: Changhong High-Tech, 605008.SH) recently released its annual report for 2024. The report shows that the company achieved a significant increase in operating income during the reporting period, reaching 3.634 billion yuan, a year-on-year surge of 156.63%, setting a historical record. However, the net profit attributable to shareholders of the listed company slightly decreased to 94.2229 million yuan, a year-on-year reduction of 0.83%. The net profit after deducting non-recurring gains and losses reached 0.69 billion yuan, mainly due to the significant economic benefits achieved by the PBAT black masterbatch project of its subsidiary, Changhong Biology.

The company's main revenue mainly comes from the TPES series, PBAT/PBT series, and black masterbatch and other products. Among them, the TPES series accounts for 37.80% of revenue with a gross profit margin of 6.92%; the PBAT/PBT series accounts for 34.84% of revenue with a gross profit margin of 3.45%; while the black masterbatch and other products account for 26.09% of revenue, with a gross profit margin as high as 19.86%. It is worth mentioning that in 2024, the sales of the company's products were good, with inventory down by 53.68% year-on-year, reaching the best level in the past three years. The net amount of operating cash flow also increased significantly, reaching 349 million yuan, a year-on-year increase of 49.67%, showing a continuous improvement in the company's cash flow situation over the past three years.

According to the masterbatch industry network, Changhong Bio's PBAT black masterbatch project is the first factory in the country to produce PBAT black masterbatch using rich aromatic oil as raw material. The project, with its unique process technology, can remove impurities from the raw materials and produce products of significantly higher quality than the market average. Changhong High-tech's PBAT project has a planned capacity of 600,000 tons/year, and the first phase of the project with an annual capacity of 120,000 tons has been completed. The project not only has product quality advantages by improving product quality through unique processes but also has cost control advantages. The tail gas generated by the project equipment can directly replace the natural gas required for the PBAT/PBT production facility, and self-produced steam can directly replace externally sourced steam, effectively reducing production costs. At the same time, through the recycling of tail gas and steam, the efficiency of resource utilization has been improved, enhancing the overall economic benefits of the project. This project plays a key role in the growth of the company's net profit, enhances the company's competitiveness in the PBAT black masterbatch market, and helps the company further expand its market share. In addition, as an important part of Changhong High-tech's degradable plastic industrial chain, this project forms a good synergy with the company's other projects, jointly promoting the continuous development of the company's overall business.

In terms of industrial layout and project advancement, Changhong High-Tech has formed a dual-wheel drive industrial development pattern in the TPES thermoplastic elastomer and PBAT degradable fields, and is focusing on building an integrated and comprehensive industrial layout covering the upstream and downstream of degradable plastics. In 2024, the company continues to advance multiple projects, among which the "Phase II of the 250,000 tons/year solution SBR capacity expansion and renovation project" fundraising project has been basically completed, with plans to start commissioning at the end of March. The 50,000 tons/year TPE black masterbatch technical renovation project has also been completed and entered the commissioning phase. After reaching full production, the company will have a total black masterbatch production capacity of 110,000 tons/year. In addition, the company also plans to invest in the construction of a new project for 50,000 tons/year high-end fiber elastomer new materials and a supporting 100,000 tons/year PBAT black masterbatch facility, and is fully advancing the preparatory work for the first phase construction of the "Acrylic Acid Industrial Park" project. The gradual implementation of these projects and business expansion will bring new growth points to the company and further enhance its industrial strength.