Huafon sees YOY reduction of net profit in Q1 2025

On April 26, 2025, the company disclosed its Q1 2025 financial report. In Q1 2025, the company achieved a revenue of 6.314 billion yuan, a year-on-year decrease of 5.15%; the net profit attributable to the parent company was 504 million yuan, a year-on-year decrease of 26.21%.

Business analysis

In the first quarter, the prices of spandex saw some recovery, while the prices of adipic acid continued to decline. In Q1 2025, the prices of spandex (20D-40D) showed some recovery compared to the fourth quarter of last year. The price of the raw material MDI fluctuated downward, providing some restoration of product margins, which eased the operating pressure on spandex manufacturers. The company's revenue for Q1 2025 was 6.314 billion yuan, a decrease of 3.74% compared to the previous quarter; the net profit attributable to the parent company was 504 million yuan, an increase of 145.9% quarter-on-quarter, indicating a significant improvement in profitability. In April, spandex prices fell to a low point, and prices are expected to remain under pressure in the second quarter. The price of adipic acid saw a rise in January and February, but since March has been in continuous decline, falling lower than in Q4 2024, putting ongoing pressure on product margins.

The company is constructing an integrated project for its spandex industry chain, which is expected to further enhance profitability in the future. The company focuses on building an integrated industrial structure for upstream and downstream industries to withstand industry cycles, strengthen its profitability and risk resistance, and achieve good synergies in development. The overall debt level of the company is relatively low with minimal phase investments. Currently, the main ongoing projects include a spandex project with an annual capacity of 150,000 tons, a 1.1 million ton natural gas integration project, and a major deepening project for the 240,000-ton PTMEG spandex industry chain. The integration projects for the upstream spandex industry chain have not yet been fully laid out. As these integration projects gradually complete their layouts, the cost advantages of the company's spandex products will further strengthen, leading to improved profitability.