March 20th, Shenma Co., Ltd. presented the 2024 report card. InRevenue slightly increased by 4.08% to 13.968 billion yuan, while the net profit attributable to shareholders of the listed company plummeted by 77.57% to 33 million yuan., the net profit after deducting non-recurring gains and losses even recorded a loss of 0.92 billion yuan, with a year-on-year decline exceeding 200%. This 'increase in revenue but not in profit' annual report unveiled the deep-seated predicament of this long-established chemical company amid the fluctuations of the industry cycle.

Eightfold reduction in profits, leading to a 'waterfall' drop on the income statement

From the profit-reducing factors disclosed in the annual report, it can be seen that Shenma Corporation is facing comprehensive operational pressures. The decline in both volume and price of comparable products has directly eroded 195 million yuan in profits, reflecting a deterioration in the industry's supply and demand landscape. Notably, an increase in R&D investment has led to a 41 million yuan reduction in profits, which is particularly concerning in the technology-intensive chemical industry—is this a strategic investment or a sign of inefficiency? Coupled with multiple blows from investment income, credit impairment, and asset impairment, the risk management capabilities of the company's management are being severely tested.

Nylon 66 'a single tree cannot support the sky', bisphenol A becomes a performance black hole

The severe divergence of core business segments exposes structural risks. Nylon 66 industrial yarn and chips together contribute 4.28 billion yuan in revenue, with a year-on-year growth of about 4%, supporting the company's fundamentals. As a globally rare enterprise with a full Nylon 66 industry chain, its industrial yarn products still maintain a market share of over 60% in the high-end tire cord fabric sector, an advantage that may benefit from the trend of lightweight new energy vehicles. However, a 5.18% decline in the chemical fiber weaving segment, a cliff-like drop of 61.17% in the PC chemical segment, and particularly a 95.65% plunge in bisphenol A revenue to 31 million yuan, indicate a loss of control in non-core businesses.

The Dual Slaughter of the Cyclical Curse and Technological Iteration

The collapse of bisphenol A holds significant warning implications for the industry. This chemical product, once highly anticipated, faced a dual squeeze in 2024 from severe fluctuations in the price of upstream benzene and weak demand for downstream epoxy resins. More fatally, with the technological iteration in polycarbonate (PC) synthesis, the demand for bisphenol A significantly decreased with the non-phosgene process, and the change in the industry's technological route directly destroyed the value of traditional production capacity. The failure of Shenma Co., Ltd. in this field exposed the lag in forecasting the technological route.

The Paradox of Transformation Under the Trillion Nylon City Strategy

Under the grand blueprint of building a trillion-yuan level 'China Nylon City' in the Pingdingshan Nylon New Materials Industry Cluster, the transformation path of Shenma Corporation reveals contradictions. On one hand, its nylon 66 industry chain's vertical integration advantages are significant, and the cost advantages brought by the breakthrough in domestic production of adiponitrile have not been fully realized; on the other hand, the horizontally expanded businesses such as PC and bisphenol A have instead become a drag on performance. This imbalance between 'vertical deepening' and 'horizontal expansion' strategies is magnified during the industry's downturn cycle.

Breakthrough Path: From Scale Expansion to Value Deep Cultivation

Facing a dilemma, the company needs to reconstruct its strategic coordinate system. First, it should decisively contract non-core businesses, and the bisphenol A production line may need to be strategically abandoned; second, it should deeply explore high-end application scenarios for nylon 66, converting technological advantages into pricing power, especially in emerging fields such as aerospace and new energy vehicles, to develop special materials markets; furthermore, it needs to be vigilant against the phenomenon of 'bloated' R&D investment, establishing a market demand-oriented R&D system. As the domestication process of adiponitrile accelerates, how to convert cost advantages into technological barriers will become key to determining the second growth curve.

The 2024 annual report of Shenma Co., Ltd. sounded the alarm for the transformation of traditional chemical enterprises. As industry competition shifts from production capacity scale to technological high ground, and from commodities to specialty materials, what companies need is not only an extension of production lines but also a reconstruction of the logic of value creation.