Weifang Yaxing Chemical (600319.SH) issued a profit warning, expecting a net loss of 95 million to 115 million yuan in 2024.

Weifang Yaxing Chemical (600319.SH) issued a notice of pre-loss in the annual performance forecast for 2024, with the company expected to incur a net loss of 95 million to 115 million yuan attributable to the shareholders of the listed company in 2024, compared with the same period last year (statutory disclosure data), showing a loss. During the reporting period, the company's production and operation work steadily progressed, with production and operating income showing a continuous recovery growth trend since relocation. Through technological innovation, the company has increased the production capacity of the CPE unit from 50,000 tons/year to 80,000 tons/year, resulting in increased production and sales volume. Although the unit production cost has significantly decreased compared to the same period last year, the intensifying market competition has led to a greater decrease in market prices than in production costs, resulting in a lower gross profit margin. Additionally, the company is currently in the relocation construction phase, with only three sets of production facilities put into operation in the park. The high fixed costs such as personnel costs and initial investment in public facilities have squeezed the profit margins of the products. Furthermore, the company is constructing a 45,000-ton high-end new material (PVDC) project, a 12,000-ton hydrazine project (hydrogen peroxide method), a 500-ton/year hexachlorocyclo triphosphonitrile project, and a 500-ton/year benzalkonium chloride industrialization project. To meet the capital requirements for project construction, the amount of financing has increased, leading to a rise in financial expenses compared to the same period. In summary, the net profit attributable to the shareholders of the listed company in 2024 is expected to decrease year-on-year after deducting non-recurring gains and losses. During the reporting period, the company received a compensation of 50 million yuan for stoppage and closure losses related to relocation and confirmed the income from compensation for stoppage and closure losses related to relocation. Additionally, the company received a relocation award of 9.6 million yuan during the reporting period. These items are expected to increase the net profit attributable to the shareholders of the listed company for the year 2024 and the year-end net assets.