China XLX Fertiliser (1866) H1 2024 earnings summary

Executive summary

• Maintains industry leadership as a top urea and compound fertilizer producer in China, with the largest single-unit urea capacity and leading market share in high-efficiency fertilizers.

• Revenue for 1H2024 was RMB12,061 million, nearly flat year-over-year, while net profit rose 21% to RMB938 million, driven by higher gross profit and other income.

• Gross profit increased 12% year-over-year, with margin improvements in key segments due to lower raw material costs and operational efficiencies.

• Profit attributable to owners rose 26% to RMB687 million, reflecting improved subsidiary performance and cost controls.

• Operates major production bases in Xinjiang, Henan, and Jiangxi, with ongoing expansion and new projects in Guangxi and Gansu.

Financial highlights

• H1 2024 sales revenue reached RMB 12.06 billion, up 10.02% year-over-year.

• Gross profit for H1 2024 was RMB 2.356 billion, up 12% year-over-year.

• Net profit for H1 2024 was RMB 938 million, up 21% year-over-year; net profit attributable to shareholders was RMB 687 million, up 25%.

• Urea revenue up 9% YoY to RMB3,834 million; sales volume up 25%, average price down 13%.

• Compound fertilizer revenue up 6% YoY to RMB3,410 million; sales volume up 13%, average price down 6%.

• Methanol revenue up 32% YoY to RMB1,291 million; sales volume up 31%, average price up 1%.

• Gross profit margin improved to 19.5% from 17.5% year-over-year.

• Earnings per share rose to RMB0.564 (basic) from RMB0.448 YoY.

Outlook and guidance

• Strategic plan for 2024–2027 emphasizes strengthening core fertilizer business, cost reduction, and efficiency improvement.

• Domestic economy expected to recover further in 2H2024, with balanced fertilizer supply-demand and stable coal prices.

• Industrial demand for urea to rise due to regulatory requirements; compound fertilizers expected to outperform 1H2024.

• Company to focus on technical upgrades, digital transformation, and integrated value-added services for farmers.

• Ongoing investments in new production capacity and materials, with major projects scheduled for completion through 2028.