CHINA XLX FERT (01866) announced its 2025 annual results on March 27. The group achieved annual revenue of RMB 25.352 billion, a year-on-year increase of 9.6%. Gross profit reached RMB 3.808 billion, with an overall gross margin of 15.0%. Net profit attributable to owners of the parent company was RMB 932 million. After adjusting for non-recurring gains and losses, the net profit attributable to owners was also RMB 932 million, marking a 1.2% increase compared to the previous year. This represents steady growth against a backdrop of industry overcapacity and product price pressures. The company proposed a final dividend of RMB 0.32 per share, a 23% year-on-year increase, which is expected to be paid before the end of July 2026, demonstrating management's confidence in the company's long-term development.
Volume growth was the primary driver of the revenue increase. Adhering to its core profit model of "low cost + differentiation" and implementing integrated industrial and trading operations, the group saw significant volume increases for compound fertilizers and methanol. Sales volume of core products rose notably, contributing to the approximately 10% year-on-year revenue growth. The proportion of urea exports increased by 6 percentage points year-on-year, while the share of overseas revenue rose by 4 percentage points.
Cost advantages were further deepened. The comprehensive application of dual-fuel combustion technology and the promotion of specific technical upgrades effectively reduced production costs by 13%. Overall energy consumption was 10% lower than the industry average. The successful commissioning of the Phase II project in Jiujiang reduced urea production costs at the Jiangxi base to RMB 80, further unleashing high-quality, low-cost production capacity. Additionally, by replacing high-interest loans and securing tax incentives, the group reduced financial expenses by 3% and increased other income by 32%.
Research and development efforts and product upgrades continued. R&D investment in 2025 grew by 19% year-on-year. The establishment of a central research institute led to breakthroughs in areas such as AI applications in chemical processes, coal efficiency improvement, and energy recovery. The company also expanded into fine chemicals, laying out plans for high-value-added products like polyoxymethylene.
Capacity expansion and digitalization progressed. The chemical new materials project at the Xinxiang base and the new HUAIDONG base advanced according to plan. Upon full capacity release across the five major production bases, the group's market share in fertilizers is projected to increase by 6 percentage points. The Xinxiang and Xinjiang bases have already achieved "black screen operation," and the introduction of industrial AI systems in compound fertilizer production lines is expected to reduce annual costs per line by approximately RMB 1.5 million.
The group will continue to deepen its core business, "building on fertilizers as the foundation." It plans to use large gas-based production bases as the core while establishing smaller compound fertilizer bases nationwide. It will also deepen its presence in Southeast Asian markets, gradually expanding coverage to neighboring countries such as Vietnam and Laos, accelerating its global footprint.
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