Dorian LPG stands on the brink of a reversal! In 2025, Dorian LPG delivered its worst performance in history: annual revenue reached 27.526 billion yuan, a year-on-year decrease of 11.03%; net profit attributable to shareholders turned from profit to loss, with a loss of 921 million yuan. However, a few months later, the company's situation changed dramatically: the first-quarter report for 2026 shows that Dorian LPG achieved revenue of 6.152 billion yuan, a year-on-year decrease of 22.90%, but net profit attributable to shareholders turned from loss to profit, reaching 161 million yuan. So, why is Dorian LPG's performance so divided? The company's performance surge in the first quarter of 2026 is mainly attributed to "non-recurring gains and losses." The first-quarter report shows that the company generated an asset disposal gain of 181 million yuan from the disposal of waste precious metal catalysts in the Maoming project. However, this kind of performance, propped up by selling scrap materials, is clearly not sustainable. Let's exclude this "windfall" and see how much of the company's adjusted net profit remains! In the first quarter of 2026, the company's adjusted net profit reached 44.7511 million yuan, a significant year-on-year increase of 43.22%. It is worth noting that the company's adjusted net profit for the entire year of 2025 was only 12.3259 million yuan. This indicates that Dorian LPG's core business is quietly recovering. Of course, changes in the company's gross profit margin and net profit margin can also support this judgment. In the first quarter of 2026, the company's gross profit margin rebounded to 5.01%, and the net profit margin turned positive to 2.61% from -3.34% at the end of 2025. So, what exactly is the company's core business, and why is it showing signs of a turnaround now? Currently, Dorian LPG's business is mainly divided into three parts: liquefied petroleum gas (LPG), propylene, and polypropylene (PP). In 2025, these three businesses accounted for over 95% of the company's revenue. Among them, the LPG business generated 11.568 billion yuan, accounting for 42.02% of total revenue; the propylene business generated 1.499 billion yuan, accounting for 5.44%; and the PP business generated 13.573 billion yuan, accounting for 49.31%. While it appears to be three separate businesses, the company has actually built a complete C3 industry chain: "liquefied petroleum gas (LPG) → propylene → polypropylene (PP)." Currently, the company still relies on imports to obtain LPG as a raw material. In 2025, the company's LPG procurement accounted for 77.98% of total procurement. Influenced by factors such as international crude oil prices and market demand, LPG prices fluctuate significantly. Although the company uses propane futures to hedge the LPG it has contracted to purchase, due to the inability to effectively hedge futures against spot prices, it could not apply hedge accounting, resulting in ineffective hedging losses. In 2025, the company recognized an investment loss of 180 million yuan from ineffective hedging. Coupled with the overall lack of growth momentum in the polypropylene industry chain, it fell into a situation of oversupply. In 2025, domestic PP production capacity reached 48.225 million tons, a year-on-year increase of 10.1%; while consumption was only 38.587 million tons, a year-on-year increase of 5.8%, with capacity growth far exceeding demand growth. As a result, the average annual prices of the company's propylene and polypropylene products in 2025 declined year-on-year, especially in the fourth quarter, when polypropylene prices accelerated their decline. Industry data shows that in the fourth quarter of 2025, domestic polypropylene prices fell by 8.22% compared to the third quarter and by 14.97% compared to the same period in 2024. The price difference between the cost side and the selling price side was severely compressed, ultimately leading to a significant decline in the profitability of the company's core business. Faced with difficulties in its core business operations, Dorian LPG did not sit idly by. First, cost reduction and efficiency improvement. Entering 2026, the company has made significant efforts in expense control. In the past, once LPG import shipments were delayed, demurrage fees flowed out like water. In the first quarter of 2026, the company's vessel demurrage costs significantly decreased, driving a 37.02% year-on-year reduction in selling expenses, from 18.9693 million yuan to 11.9469 million yuan. An even greater change came from the financial expense side—the company actively optimized its debt structure, leading to reduced interest expenses. In the first quarter of 2026, the company's financial expenses decreased by 24% year-on-year, from 259 million yuan in the same period last year to 197 million yuan, saving nearly 27 million yuan in interest expenses alone. The reduction in both expenses created room for overall profit improvement. Second, external supply for profit creation. Leveraging by-product hydrogen, Dorian LPG has opened up a new revenue stream. The hydrogen produced during the propane dehydrogenation (PDH) process to make propylene is mostly burned as fuel or directly vented, failing to fully realize its value. However, through PSA purification technology, the company can increase the purity of by-product hydrogen to 99.9994%, converting it into high-value-added industrial gases for external sales. Currently, Dorian LPG has four PDH units at its Ningbo and Zhangjiagang bases, capable of producing approximately 100,000 tons of high-purity hydrogen per year as a by-product. Data shows that in 2025, the company's hydrogen business achieved sales of about 25,100 tons; contributing 332 million yuan in revenue, accounting for 1.21% of total revenue. Do not underestimate this 1.21%—it is one of the pillars of the company's profit—the hydrogen business's gross profit margin has long been maintained above 99% (far exceeding traditional businesses). In the first quarter of 2026, the company made effective progress in external hydrogen sales from its Zhangjiagang and Ningbo bases, not only stabilizing supply to industrial customers but also continuously expanding hydrogen energy application scenarios. What was once "waste gas" is gradually turning into tangible "cash flow." Looking to the future, Dorian LPG's real trump card lies in new materials. First, carbon fiber. With properties such as low density, high strength and modulus, and corrosion resistance, carbon fiber has become a key material in high-end manufacturing, with global demand showing rapid growth. Data shows that global carbon fiber demand reached 225,000 tons in 2025, a year-on-year increase of 43.8%; it is expected to rise to 423,000 tons by 2030. As early as 2023, Dorian LPG fully established Dorian LPG (Maoming) Carbon Fiber Co., Ltd. In 2024, the company officially launched a 10,000-ton T1000 carbon fiber project with a total investment of 3.737 billion yuan. The project is expected to commence production in June 2026. Currently, the company has formed a closed-loop layout of the entire industry chain: "PDH → AN → PAN polymerization → precursor → carbon fiber → composite products," achieving full-chain independent control from raw materials to end products. Second, graphite and graphene. On April 8, 2026, Dorian LPG signed an agreement in Maoming, Guangdong, to establish a project for the deep processing of 1 million tons of graphite and graphene per year. The project is planned in three phases: the first phase with 300,000 tons, the second phase with 300,000 tons, and the third phase with 400,000 tons. After the implementation of this project, the company will further form an industry chain layout of "propane-propylene-polypropylene-carbon fiber-graphene." In conclusion! From following industry cycles to forging new paths with new materials; from focusing on LPG and PP as core businesses to covering hydrogen energy, carbon fiber, and graphene, Dorian LPG is using one chain to link together its next decade. The above analysis does not constitute specific investment advice. The stock market carries risks, and investment requires caution.
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