Rising gross margin of biomass cellulose filament: Xinxiang Chemical Fiber successfully turns losses into profits in 2024

On the evening of Jan 21, Xinxiang Chemical Fiber announced that it expects a net profit attributable to shareholders of 216-280 million yuan for 2024, representing a year-on-year increase of 612% to 764%. The company also anticipates a net profit of 196-260 million yuan after excluding non-recurring items, an increase of 394% to 490% compared to the same period of 2023. The basic earnings per share are expected to be 0.14-0.18 yuan, compared to a loss of 0.0296 yuan per share.

Xinxiang Chemical Fiber stated that the significant increase in net profit during the reporting period compared to the same period of 2023 is primarily due to the rise in profits from its main product, biomass cellulose filament. During the reporting period, the sales volume of biomass cellulose filament increased year-on-year, while the decline in raw materials and energy prices led to a reduction in unit costs, resulting in improved product gross margins and a substantial increase in gross profit.

In its 2024 semi-annual report, Xinxiang Chemical Fiber had previously mentioned that in terms of biomass cellulose filament, the company intensified its sales efforts based on external market conditions, resulting in significant growth in both domestic and international sales volume. Additionally, the company strengthened internal cost control, leading to a decrease in costs for raw materials and energy. The product gross margin increased by 9.01 percentage points, with gross profit reaching 375 million yuan, an increase of 184 million yuan compared to the same period of 2023.