Summary of Performance of 12 Listed Agrochemical Companies in the First Half of 2023

01 Hengbang Biotechnology

Based on preliminary calculations from the financial department, Hengbang Biotechnology expects a net profit attributable to shareholders of the listed company between 600 million and 700 million RMB for the period January 1, 2023, to June 30, 2023. This represents a decrease of 1,934.63 million to 2,034.63 million RMB, or a year-on-year decline of 73.43% to 77.23%. The net profit after deducting non-recurring gains and losses is expected to be between 575 million and 675 million RMB, a decrease of 1,952.55 million to 2,052.55 million RMB, or a year-on-year decline of 74.31% to 78.12%.

The main reason for the decline in net profit compared to the same period last year is the impact of macroeconomic factors and changes in market supply and demand, leading to varying degrees of decrease in the market prices and sales volume of some of the company's products, resulting in a significant year-on-year decline in performance. By the end of the second quarter, the market for some of the company's main products showed signs of recovery, with prices stabilizing and rebounding.

02 Xin'an Corporation

According to preliminary calculations from the financial department, Xin'an Corporation expects a net profit attributable to shareholders of the listed company around 110 million RMB for the period January 1, 2023, to June 30, 2023. This represents a decrease of approximately 2,223.51 million RMB compared to the same period last year, or a year-on-year decline of about 95.29%. The net profit after deducting non-recurring gains and losses is expected to be around 50 million RMB, a decrease of approximately 2,272.05 million RMB compared to the same period last year, or a year-on-year decline of about 97.85%.

The main reason for the performance decline is the impact of changes in market supply and demand, leading to varying degrees of decrease in the sales prices and volumes of the company's main products, glyphosate, and organosilicon, resulting in a significant year-on-year decrease in performance.

In the first half of the year, faced with the challenging overall situation in the organosilicon industry and losses in the basic end product industry, the company actively utilized its advantages across the upstream and downstream industrial chain. By optimizing the structure of downstream organosilicon terminal products through self-supplied upstream industrial silicon raw materials, the company worked to bridge the profit gap in basic end products and maximize the value of its industrial sector. To address the intense market fluctuations caused by temporary supply-demand imbalances in the crop protection industry, the company actively leveraged its global and platform sales channels. Through coordinated sales of multiple product series, overall solutions for key crops, and improved formulation conversion rates, the company aimed to increase market share and overcome the overall industry downturn, stabilizing its core operations.

03 Jiangshan Chemical Industry

Based on preliminary calculations from the financial department, Jiangshan Chemical Industry expects a net profit attributable to shareholders of the listed company between 180 million and 210 million RMB for the period January 1, 2023, to June 30, 2023. This represents a decrease of 1,002.85 million to 1,032.85 million RMB compared to the same period last year, or a year-on-year decline of 82.69% to 85.16%. The net profit after deducting non-recurring gains and losses is expected to be between 183.15 million and 213.15 million RMB, a decrease of 1,023.46 million to 1,053.46 million RMB compared to the same period last year, or a year-on-year decline of 82.76% to 85.19%.

During the reporting period, the significant decline in the market prices and sales volume of the company's main pesticide product, glyphosate, led to a substantial decrease in net profit attributable to shareholders compared to the same period last year. In response to the challenging external environment, the company focused on lean management and precision marketing to maintain stable profits for other core products while fine-tuning the production and sales balance of glyphosate products. By the end of the second quarter, glyphosate prices showed signs of stabilizing and rebounding. Additionally, the company concentrated on strategic initiatives, seizing development opportunities, and adhering to a "dual-wheel drive" approach combining industry and capital. They focused on "supply chain supplementation, extension, and enhancement" goals, accelerated product structure optimization, adjusted industrial layout, and significantly enhanced internal growth and external development capabilities.

04 Limin Corporation

For the period January 1, 2023, to June 30, 2023, Limin Corporation is expected to achieve a net profit attributable to shareholders of the listed company between 55 million and 60 million RMB, representing a decrease of 63.65% to 60.35% compared to the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 49 million and 52 million RMB, a decrease of 65.78% to 63.69% compared to the same period last year.

The main reason for the decline in performance compared to the same period last year is the excessive inventory in the agrochemical industry during the first half of the year, resulting in reduced demand from domestic and international end customers. The company's main product sales prices experienced a downward trend, leading to weakened profitability. To proactively respond to challenges, the company continued to focus on key customers, strengthened strategic cooperation, actively explored the market, enhanced the marketing team, reduced procurement costs for raw materials, and improved cost-effectiveness. They also pushed forward with trial production and industrialization progress for new products, further enhancing the overall profitability of the company.

05 Red Sun Corporation

For the period January 1, 2023, to June 30, 2023, Red Sun Corporation is expected to achieve a net profit attributable to shareholders of the listed company between 15 million and 20 million RMB, representing a decrease of approximately 97.57% to 96.76% compared to the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 12 million and 18 million RMB, a decrease of approximately 98.08% to 97.12% compared to the same period last year.

Affected by various unfavorable factors in the global agrochemical market, Red Sun Corporation employed a comprehensive strategy focusing on the core business

, extending and strengthening the industrial chain, and adjusting market structure while operating with a global vision. They achieved successful extension, optimization, supplementation, and enhancement of the "three major" industry chains: new pyridine alkaloids, chlorantraniliprole, and biological L-aminophosphonic acid. This resulted in the rapid formation of an optimized industry and product structure, unlocking potential and increasing efficiency. The company managed to create new opportunities amidst challenges. Successfully completing rapid adjustments to the global market structure not only supported the company's turnaround and rapid recovery in the second half of the year but also played a pivotal role.

06 Fengshan Group

Based on preliminary calculations, Fengshan Group is expected to achieve a net profit attributable to shareholders of the listed company between 50 million and 60 million RMB for the period January 1, 2023, to June 30, 2023, compared to the same period last year (as per statutory disclosure data). This represents a decrease of 67.34% to 80.80% year-on-year. The net profit after deducting non-recurring gains and losses is expected to be between 52 million and 60 million RMB, a decrease of 76.13% to 87.84% compared to the same period last year (as per statutory disclosure data).

During the reporting period, the company was affected by decreased demand from domestic and international downstream customers, resulting in insufficient demand for pesticides and a sharp decline in exports. Additionally, the decrease in product prices exceeded the decline in the prices of major raw materials, negatively impacting the company's product gross margins. Furthermore, compared to the same period last year, the reporting period included convertible bond interest expenses, contributing to a significant decrease in net profit. To address these challenges, the company will further strengthen marketing strategies, implement cost reduction and efficiency improvement measures, and optimize personnel structure to enhance its competitiveness.

07 Blue Fountain Biochemicals

For the period January 1, 2023, to June 30, 2023, Blue Fountain Biochemicals expects a net loss attributable to shareholders of the listed company between 65 million and 44 million RMB. The net loss after deducting non-recurring gains and losses is expected to be between 74 million and 50 million RMB.

Due to macroeconomic conditions, changes in market demand, and comprehensive maintenance of the sulfuric acid and waste heat power generation production facilities, the company's major pesticide products, such as methomyl, chlorpyrifos, and cyromazine, experienced intermittent shutdowns, resulting in increased operating costs and significantly reduced output, leading to a decrease in profitability. Non-recurring losses are primarily related to the disposal of old equipment, resulting in an expected impact of approximately 70 million RMB on the net profit attributable to shareholders of the listed company.

08 Suli Corporation

Based on preliminary calculations from the financial department, Suli Corporation expects a net profit attributable to shareholders of the listed company between 36 million and 43 million RMB for the period January 1, 2023, to June 30, 2023. This represents a decrease of 15,611.53 million to 16,311.53 million RMB compared to the same period last year, or a year-on-year decline of 78.40% to 81.92%. The net profit after deducting non-recurring gains and losses is expected to be between 36 million and 43 million RMB, a decrease of 15,344.98 million to 16,044.98 million RMB compared to the same period last year, or a year-on-year decline of 78.11% to 81.67%.

The decline in performance compared to the same period last year is primarily due to reduced demand from domestic and international end customers, a downward trend in the prices of main raw materials, and a downturn in the overall agrochemical and flame retardant industries. This resulted in decreased sales prices and quantities of the company's main products and corresponding declines in current period revenue and profits. Additionally, during the same period last year, the company benefited from energy dual control policies and insufficient supplies in the chemical materials market, leading to relatively good overall operating performance. Consequently, the current reporting period experienced a significant year-on-year decline. The company will continue to strengthen market development, seize market share, conduct new product development, optimize product structure, enhance refined management, and improve management efficiency.

09 Xianda Corporation

According to preliminary calculations from the financial department, Xianda Corporation expects a net profit attributable to shareholders of the listed company between 50 million and 53 million RMB for the period January 1, 2023, to June 30, 2023. This represents a decrease of 73.21% to 74.72% compared to the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 47 million and 50 million RMB, a decrease of 76.38% to 77.80% compared to the same period last year.

In the first half of 2023, the market competition intensified due to macroeconomic conditions, reduced demand from domestic and international end customers, and a downward trend in the prices of main raw materials, resulting in varying degrees of decline in the average sales prices and quantities of the company's main products. As a result, current-period revenues and profits decreased. In contrast, during the same period last year, the company benefited from energy dual control policies and a shortage of chemical materials in the market, leading to relatively good overall operating performance, resulting in a significant year-on-year decline in the current reporting period. The company will continue to focus on technology and equipment upgrades, reduce costs, enhance product research and development, introduce differentiated products to the market, and strengthen its marketing team's capabilities. They will also focus on key markets, key customers, and key crops to further improve the overall profitability of the company.

10 Zhongnong United

For the period January 1, 2023, to June 30, 2023, Zhongnong United expects a net loss attributable to shareholders of the listed company between 10 million and 14 million RMB, representing a decrease of 124.09% to 133.73% compared to the same period last year. The net loss after deducting non-recurring gains and losses is expected to be between 14 million and 18 million RMB, a decrease of 133.63% to 143.23% compared to the same period last year.

Affected by macroeconomic conditions and changes in market supply and demand, Zhongnong United faced intensified market competition. The prices of some of the company's main products experienced varying degrees of decline, leading to weakened profitability. In addition, some export orders for the company's products were delayed, resulting in an overall loss in performance.

To enhance market share, Zhongnong United focused on key markets, key customers, and key crops. They closely monitored market changes, improved decision-making speed, seized market orders, and implemented differentiated product sales strategies. During the reporting period, the company achieved a year-on-year increase in overall sales volume. Moving forward, the company will continue to strengthen market development, expand market share, develop new products, optimize product structure, implement refined management, and improve management efficiency to enhance overall competitiveness.

11 Xinnong Corporation

For the period January 1, 2023, to June 30, 2023, Xinnong Corporation expects a net profit attributable to shareholders of the listed company between 19 million and 28 million RMB, representing a decrease of 71.69% to 80.79% compared to the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 13 million and 19 million RMB, a decrease of 78.32% to 85.17% compared to the same period last year.

The decrease in net profit compared to the same period last year is mainly due to an oversupply of raw materials and intermediates in the agrochemical industry during the first half of the year, resulting in a significant decline in incremental demand from customers. The prices and quantities of the company's main raw materials and intermediates experienced a simultaneous decline, leading to weaker profitability. To actively address market challenges, the company focused on upgrading process equipment, reducing costs, investing in product technology research and development, and launching differentiated products. They also intensified technology marketing and concentrated on key markets and key customers to enhance the overall profitability of the company.

12 Union Chemical Technology

For the period January 1, 2023, to June 30, 2023, Union Chemical Technology expects a net profit attributable to shareholders of the listed company between 20 million and 30 million RMB, representing a decrease of 85.32% to 90.22% compared to the same period last year. The net profit after deducting non-recurring gains and losses is expected to be between 115 million and 135 million RMB, a decrease of 36.28% to 45.72% compared to the same period last year.

In 2023, the company's crop protection customers entered a "de-stocking" phase, leading to a decrease in revenue for the crop protection division. As a provider of customized service solutions, this decline resulted in reduced profitability. During the reporting period, the company recorded non-recurring losses of approximately 105 million to 95 million RMB, primarily due to investment losses from foreign exchange hedging transactions. However, the company's foreign currency assets generated some exchange gains, indicating that these items will not impact the company's cash flow and normal operations.