Intern Zhang Lei and financial reporter Zhao Chong
Recently, the annual report released by Shandong Lianchuang Industrial Development Group Co., Ltd. (hereinafter referred to as "Lianchuang Co., Ltd.") shows that its performance in 2023 has dropped significantly.
On April 23, Lianchuang disclosed its 2023 annual report. According to the report, the company's revenue was 1.036 billion yuan, down 49.79% year-on-year, net profit attributable to shareholders of listed companies was 12.7152 million yuan, down 98.04% year-on-year, and net cash flow from operating activities was 230 million yuan, down 66.31% year-on-year.
According to the data, Shandong Lianchuang Industry Development Group Co., Ltd. used to be known as Shandong Lianchuang Internet Media Co., Ltd., and once focused on Internet media operations, Internet information services and other business content.
In 2021, Lianchuang Co., Ltd. announced that the company's industry was changed to "C26 chemical raw materials and chemical manufacturing".
At present, Lianchuang Co., Ltd. is committed to the fluorine chemical sector and the polyurethane sector. As mentioned in the annual report, Lianchuang Co., Ltd. has a complete fluorine chemical industry chain including basic supporting raw materials, fluorine-containing refrigerants, etc., and a polyurethane product industry chain covering a series of combined polyether polyols, polyester polyols, and polyether polyols.
In terms of industries, the fluorine-containing new materials industry and the polyurethane new materials industry achieved revenue of 717 million yuan and 319 million yuan respectively during the reporting period, accounting for 69.21% and 30.79% of the total revenue. The revenue of the two major industries decreased by 54.64% and 33.91% respectively compared with 2022.
In addition to the decline in revenue of the two major industries, the decline in gross profit of its main business of fluorine-containing new materials industry cannot be ignored. During the reporting period, the gross profit of the fluorine-containing new materials segment, which accounted for nearly 70% of the revenue, decreased by more than 55 percentage points compared with the same period last year.
According to the annual report, Lianchuang's main products in new fluorine-containing materials are fluorine-containing refrigerants and fluoropolymers (PVDF). Lithium-ion grade polyvinylidene fluoride (PVDF) products are one of the more critical materials in lithium battery auxiliary materials, mainly used for cathode binder and separator coating in lithium batteries.
Regarding the decline in performance during the reporting period, Lianchuang Co., Ltd. explained that due to the impact of the market situation of new energy lithium battery material products, the sales price of the main products of Shandong Huaan New Materials Co., Ltd., a holding subsidiary of the company, decreased sharply compared with the same period last year, and the gross profit declined, resulting in a significant decline in performance compared with the same period last year.
According to the relevant information released by the Ministry of Industry and Information Technology in March, although the lithium-ion battery industry in mainland China will continue to grow in 2023, the price of products in the lithium battery industry has declined significantly.
Lianchuang also said in the annual report that the price of the main raw materials of power batteries fell throughout the year due to factors such as the decline in the growth rate of the demand side, the release of production capacity on the supply side and the change in market expectations, and the price decline had an adverse impact on the operating performance of battery materials and resource enterprises.
It is worth mentioning that according to media reports, the R124b production quota of Huaan New Materials, a subsidiary of Lianchuang Co., Ltd., reached 3,650 tons, accounting for 26.28% of the domestic total, which is the largest R124b production quota in China. As a raw material for the production of PVDF, R124b may be able to help Lianchuang through the industry adjustment period in terms of cost.
In terms of fluorinated refrigerants, the current refrigerant has been iterated for four generations. The mainland refrigerant is also in the stage of accelerating the phase-out of the second-generation quota, and the third-generation quota allocation production is begins. However, the R&D and production costs of the fourth-generation products with good environmental performance are still high, and they have not yet begun to be applied on a large scale in the mainland.
As a veteran chemical industry enterprise, Lianchuang Co., Ltd. has rich experience in the production and operation of fluorine-containing refrigerants, and has also laid out the production and manufacturing of fourth-generation refrigerants in a timely manner, and has a production capacity of 10,000 tons. Lianchuang Co., Ltd. will also carry out device transformation, plan to expand production through technological transformation, and gradually release production capacity according to market conditions.
The financial reporter sent an interview letter to Lianchuang Co., Ltd. on issues related to the annual report, but has not received a reply as of press time.