Nanjing, Jiangsu – System house Hongbaoli expects its net profit in H1 2019 to be CNY 38m ($5.5m). This compares with CNY 10m in the first half of last year.
Sales during H1 2019 is likely to be CNY 1.2bn, down by 2% year on year, said a company announcement in July.
‘US tariffs do not have any severe impact on us,’ said Zhang Lin. He is Hongbaoli’s securities affairs representative and was speaking UTECH-polyurethane.com. ‘We sell to a range of overseas markets and the US is just one of them.’
Hongbaoli said it's strategy of tailoring products to its customers' needs increased sales volumes. But lower feedstock prices dragged the value of sales down.
Despite the effect on selling prices; lower feedstock prices drove up the gross profit margin, said the announcement.
The value of Hongbaoli’s net assets have increased by 5% from the beginning of 2019. This is due to new projects including its propylene oxide facilities in Taizhou, Jiangsu. That complex has been operational since January.
Originally, Hongbaoli intended to invest CNY 951m in the PO project but has increased it to CNY 1.4bn. The rise is due to tighter regulations on chemical projects, said another Hongbaoli statement in July.
Because the PO project took longer to complete than planned, Hongbaoli has been paying the staff it hired to work on the plant in mid 2016, said the announcement.