Financial performance of top phosphorus chemical companies keep booming in Q1 2022

The phosphorus chemical industry in China continued to boom in 2022, and the top three players in the industry, including Yunnan Yuntianhua Co., Ltd. (Yuntianhua), Hubei Yihua Chemical Industry Co., Ltd. (Hubei Yihua) and Hubei Xingfa Chemicals Group Co., Ltd. (Hubei Xingfa) saw their financial figures largely went up in the first quarter this year.

On 15 April, 2022, Yuntianhua announced that it attained USD2.35 billion and USD0.26 billion as revenue and net profit in the first three months of 2022, up 13.28% and 186.15% year on year, respectively.

In early April, Hubei Yihua made a pre-announcement saying that its estimated net profit for the first quarter this year grew by 173.17%～206.14% over the same period last year.

In late March, Hubei Xingfa made an estimation that its net profit in the first quarter this year would rose by 379.35% year on year.

The three companies all realized a strong growth in financial performance in the 2021 fiscal year.

Table : Revenue and net profit of the three companies, 2021 & Q1 2022 (billion USD)

Source: Financial reports of the above-mentioned companies

In early April this year, six ministries of China including the Ministry of Industry and Information Technology of the People’s Republic of China (MIIT) jointly promulgated the Guiding Opinions on Promoting the High-quality Development of Petrochemical Industry for the 14th Five-Year Plan Period, according to which new production capacities in the oil refining, ammonium phosphate, calcium carbide and yellow phosphorus industries will be strictly limited.

After the guiding opinions came out, the stock prices of related listed companies such as Anhui Liuguo Chemical Co., Ltd., Hubei Yihua and Hubei Xingfa kept rising. Industrial sources thought that the upturn in the phosphorus chemical industry would continue, as limitation on product supply is foreseeable and there will be a gap between the short supply and a rising downstream demand. The product prices will also be climbing consequently.