On the evening of August 28th, Anhui Jinhe Industrial Co., Ltd. released its 2025 semi-annual report. The company actively responded to complex market challenges, achieving year-on-year growth in operating performance, demonstrating strong resilience and growth potential. During the reporting period, the company achieved operating revenue of RMB 2.444 billion, a year-on-year decrease of 3.73%; net profit attributable to shareholders of the listed company was RMB 334 million, a year-on-year increase of 35.29%. Although downstream demand was under short-term pressure in the second quarter, the company's core business gross profit margin improved significantly, and key projects accelerated, injecting strong momentum into growth in the second half of the year and beyond. Food Additives Segment: Price Increases Drive Gross Profit Margin RecoveryThe food additives segment, the company's core business, performed exceptionally well in the first half of the year. This segment achieved operating revenue of RMB 1.175 billion. Although revenue decreased by 12.12% year-on-year, the gross profit margin recovered to 45.20%, an increase of 18.10% compared to the first half of 2024. This significant improvement was mainly due to the substantial year-on-year price increases of key products such as trichlorosucrose, methyl ethyl maltol, and ethyl maltol. The company further consolidated its profitability by optimizing production processes and strengthening cost control, maintaining stable shipments of mature product lines. Since the second quarter, affected by the global economic slowdown and commodity price fluctuations, downstream food and beverage and condiment demand has declined in the short term. However, data shows that China's food and beverage industry still achieved growth of approximately 5%-6% in the first half of the year, higher than GDP growth. The condiment market also has a promising outlook, with revenue projected to reach US$49.76 billion in 2025. The company stated that current food additive prices are steadily recovering and gross margins are good. With the recovery of the catering industry and younger consumers' preference for low-sugar and healthy drinks, performance is expected to rebound significantly. The global food additive market is projected to reach US$14.489 billion in 2025 and grow at a CAGR of 3.54% to US$17.242 billion in 2030. Leveraging its technological accumulation, the company is expected to seize a larger market share during the market recovery. Basic Chemicals Segment: Steady Revenue Growth, Cost Optimization Lays a Solid FoundationBasic chemical business achieved operating revenue of RMB 1.055 billion, an increase of 11.31% year-on-year. Despite weak downstream demand putting pressure on product prices and leading to a decline in gross profit margins, the gradual release of production capacity from new products at the Dingyuan Phase II project, coupled with the company's refined management and cost reduction efforts, effectively alleviated the pressure. This segment's resilience supported overall performance and created conditions for future profit improvement. Key Project Breakthroughs: Accelerated Layout in Emerging FieldsIn the first half of 2025, Jinhe Industrial achieved multiple breakthroughs in key project construction, laying a solid foundation for high-quality development. The Dingyuan Phase II project was particularly noteworthy, with the 80,000-ton/year electronic-grade hydrogen peroxide project successfully put into operation, and the 71,000-ton/year wet electronic chemicals project completing its filing and accelerating approval process. Key progress was also made in the new energy battery materials field, with the company completing the construction of a 10,000-ton/year new-generation lithium salt precursor unit, and several electrolyte additives entering the pilot-scale testing stage. Meanwhile, the core materials for the display field developed by the Jinhe Synthetic Materials Research Institute outperform international benchmark products and are undergoing pilot-scale verification, marking a solid step forward for the company's expansion into high-value-added fields. Jinhe Industrial also achieved significant results in its layout in the industrial chain synergy and biosynthesis fields. The synthetic ammonia project is progressing steadily. Upon completion of the upgrade to a 200,000-ton/year pulverized coal gasification technology, production costs are expected to be significantly reduced, further strengthening the synergistic effect of the industrial chain and providing core raw material support. Significant progress has been made in synthetic biology and biomass energy. Breakthroughs have been achieved in high-efficiency steviol glycoside strains; the enzyme modification project has reached a capacity of 1200 tons/year with a substantial cost reduction; the terpene fragrance terpene has been industrialized; the dry-ton-level pilot-scale production of cellulosic ethanol has been successfully completed; and construction of a 10,000-ton-level production line has commenced. The company has successfully attracted cooperation from well-known domestic and international companies, demonstrating broad development potential. Furthermore, the company's technological innovation strength and sustainable development capabilities have improved simultaneously. In the first half of the year, Jinhe Industrial was awarded the title of "Anhui Province Excellent Innovative Enterprise," won the China Patent Silver Award, and led the formulation of multiple industry standards, continuously enhancing its industry influence. With a focus on both safe production and green development, the company has achieved efficient management of production operations by improving its system, promoting intelligent inspection, and building an industrial internet. Future Outlook: Riding the Market Recovery Wave, Promising Performance GrowthJinhe Industrial stated that it will deepen its cutting-edge technology research and development, accelerate project implementation, consolidate its leading position in the food additives field, and expand its layout in the new energy and semiconductor sectors. China's H1 2025 GDP growth of 5.3% exceeded expectations, with production and demand steadily recovering and new growth drivers constantly emerging. The strong recovery momentum in the food and beverage industry is expected to continue, and the global food additives market is showing good growth. Through optimized operations and strict adherence to bottom lines, the company expects to reward investors with even better performance.
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