Zhongtai Chemical's losses significantly narrowed by 70%, with methanol/caustic soda becoming a performance highlight

Hui Zheng Information. On March 26, Zhongtai Chemical (rights protection) disclosed its 2025 annual report. Against the backdrop of an imbalance in supply and demand in the chlor-alkali industry and prices running at a low level, the company significantly improved its operating quality through refined management, commissioning of its methanol project, and expansion of export markets. For the full year, it achieved operating revenue of 28.696 billion yuan, down 4.74% year over year; the parent-attributable net profit was a loss of 289 million yuan, narrowing significantly by 70.43% compared with the 977 million yuan loss in the same period last year; and after non-recurring items, net profit was a loss of 410 million yuan, narrowing by 61.33% year over year. The company plans not to distribute cash dividends, not to issue bonus shares, and not to convert capital reserves into share capital.

Losses narrowed significantly

In 2025, Zhongtai Chemical achieved operating revenue of 28.696 billion yuan, down 4.74% year over year. Parent-attributable net profit was a loss of 289 million yuan, reducing losses by 688 million yuan year over year; total profit was -120 million yuan, reducing losses by 1.005 billion yuan year over year. The weighted average return on net assets was -1.34%, improving by 3.05 percentage points year over year.

There are three core driving factors behind the improvement in performance: first, the resource-utilization integrated-to-methanol project began full-scale operation at mid-year, contributing additional revenue and creating cost advantages; second, the company comprehensively advanced refined management across the entire process, improving key indicators such as calcium carbide unit consumption and ion-exchange membrane consumption, thereby lowering unit production costs year over year; third, it actively expanded overseas markets such as Central Asia, with export revenue rising sharply, effectively offsetting competitive pressure in the domestic market. Net cash flow from operating activities was 3.249 billion yuan; although down 44.77% year over year, it remained strong, laying a funding foundation for subsequent development.

PVC prices under pressure

From its principal business by product, polyvinyl chloride (PVC) sold 2.5118 million tons in the full year, up 12.57% year over year, and achieved operating revenue of 10.813 billion yuan, down 2.49% year over year. Gross margin was 8.54%, down 4.37 percentage points year over year. In 2025, newly built PVC capacity using the ethylene method in China was concentrated in commissioning, increasing supply pressure. Meanwhile, the real estate sector remained in an adjustment cycle, so PVC prices continued to trade at a low range. The company achieved double-digit growth in sales through a sales-to-production approach and increasing exports, but the decline in prices eroded profitability.

For chlor-alkali products such as caustic soda, it achieved operating revenue of 3.867 billion yuan, up 23.94% year over year, with a gross margin as high as 61.45%, up 6.74 percentage points year over year. The caustic soda market rose first and then fell, but demand support from downstream industries such as alumina, together with expanded exports, boosted profitability against the trend.

For viscose fiber, operating revenue was 2.37 billion yuan, up 30.78% year over year, with gross margin of 10.39%, down 3.21 percentage points year over year. Sales increased, but costs rose in parallel, narrowing the profit space somewhat.

In June 2025, Zhongtai New Materials’ resource-utilization integrated-to-methanol upgrade demonstration project began full operation. It added a methanol product line, generating operating revenue of 598 million yuan with a gross margin of 25.05%. The project uses a resource-utilization integrated process of “coal powder + coke breeze + associated raw syngas.” Its core equipment is fully localized in China, opening up a new profit growth point for the company.

In terms of output, PVC production was 2.5502 million tons (+14.17%); caustic soda output was 1.7660 million tons (+13.31%); and viscose fiber production was 588,500 tons (+17.51%), all maintaining a growth trend. Methanol production was 448,800 tons, generating revenue in the same year as it was commissioned.

Central Asia market expansion shows notable results

In 2025, export revenue was 1.95 billion yuan, up 43.42% year over year, and its share of total revenue increased to 6.80%. Taking advantage of the company’s geographic location at the western-opening frontier along the Belt and Road Initiative in Xinjiang, it actively expanded overseas markets such as Central Asia and improved overseas sales channels. PVC exports continued to grow at a high speed, effectively filling the gap caused by insufficient domestic demand. Caustic soda benefited from upstream installations of industries such as overseas alumina, and export volumes further expanded. By optimizing export timing and improving its sales network, the company has turned exports into an important strategic channel for easing domestic market pressure and seeking profit growth points.

Methanol fully commissioned, BDO advancing steadily

Among the company’s major project constructions, the resource-utilization integrated-to-methanol upgrade demonstration project of Zhongtai New Materials achieved successful handover in mid-April 2025, successful trial production in May, and full commissioning in June, becoming the company’s biggest highlight in 2025. Jinhui Technology’s 300,000-ton-per-year BDO project is progressing steadily. As of the end of the reporting period, cumulative investment reached 4.132 billion yuan, and the project progress was 96.88%.

According to the financial report data, total R&D investment for the full year was 1.587 billion yuan, accounting for 5.53% of revenue. The company focused on R&D projects such as high-strength plastic film (PVC) technology applications across the entire agricultural industry chain, special cable compound and resin specifically for cable compound, and fully automatic packaging technology for caustic soda flakes. During the year, it applied for 357 patents, obtained 200 authorized patents, and added 27 authorized invention patents.

In equity investments, the company acquired, in total, 15.173% equity interest in Xinjiang Huatai Heavy Chemical Co., Ltd. held by Agricultural Bank Financial Asset Investment Co., Ltd. and Shaanxi Financial Asset Management Co., Ltd., for a transaction amount of 1.2 billion yuan. Its ownership percentage increased to 99.732%. Its subsidiary, Korla Zhongtai Textile, acquired part of the equity of Zhongtai Henghui, increasing its ownership percentage to 45.69%.

The three main lines for 2026

Looking ahead to 2026, the company proposes to drive development by focusing on three main lines: “improving business quality, enhancing governance efficiency, and accelerating innovation.” It will promote a systematic reshaping of its development approach and an overall enhancement of core competitive capabilities.

The operating strategy focuses on four directions: first, consolidate the fundamentals. Extend the chlor-alkali chemicals sector downstream into high-end products by developing high value-added products such as special resins and modified materials, while accelerating product structure adjustments in the textile industry to increase the share of high-end viscose yarn and differentiated fibers. Second, cultivate growth engines by concentrating resources to push forward R&D and industrialization of key projects such as special resins, differentiated spandex fibers, polyphenylene sulfide modified materials, and mercury-free catalysts. Third, make cost reduction and efficiency improvement a regular practice by deepening lean management and implementing “short, flat, fast” energy-saving and efficiency improvement retrofit projects to promote full lifecycle asset management. Fourth, accelerate digital transformation with intelligent manufacturing as the main focus, carrying out the “artificial intelligence + green chemical industry” initiative, and launching “digital twin” pilot projects in workshops where conditions are mature.

A wealth of information and precise interpretation—available on the Sina Finance app