Nanjing, Jiangsu – System house Hongbaoli posted CNY 10.4m ($1.5m) net profit for the first half of 2018, down by 74% from H1 2017.
Hongbaoli H1 profits down 74%
Revenue over the same period increased by 12% to CNY 1.3bn, thanks to its growing market share and raised product prices, said its half year report in August.
The profit drop was caused by a smaller rise in product prices compared with raw material prices. Fluctuations in currency exchange rates and additional construction costs also added to the company's costs. Hongbaoli is building more propylene oxide capacity, said the half year report.
Hongbaoli also has 7.5m m2/year capacity for high flame-retardant polyurethane panels. The company said sales in the segment declined in H1 2018. This is because rising prices made it less competitive in a price-driven market.
The company is expanding its PU panel business in cold chain logistics, as well as permafrost embankments. It is betting on applications in highway and railway projects under China’s Belt and Road initiative.
China’s national standards on rigid PU panel used in permafrost embankments, of which Hongbaoli is a principal drafting organisation, went into effect in July 2018.
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