Wanhua Chemical Group Co., Ltd. (SHA: 600309) disclosed a forecast for a significant increase in its 2026 first-half performance on the evening of July 6th.
The company anticipates achieving a net profit between 9.8 billion and 10.4 billion yuan for the first half of the year, representing a year-over-year increase of 60.05% to 69.85%.
Adjusted net profit is projected to be between 9.6 billion and 10.2 billion yuan, marking a growth of 53.75% to 63.36% compared to the same period last year.
Key Drivers of Performance Surge
The company attributed the substantial profit growth primarily to two factors. Firstly, during the first half of 2026, global prices for chemical raw materials surged significantly due to international political factors and geopolitical conflicts, coupled with shifts in supply-demand dynamics in certain regions, which drove up market prices for chemical products and enhanced the profitability of the company's chemical product portfolio.
Secondly, aligning with its "Year of Quality and Efficiency Improvement" initiative, the company has focused on optimizing management, driving technological innovation, and continuously enhancing operational efficiency and economic benefits. The completion of the feedstock diversification revamp for the first-phase ethylene facility in January this year has bolstered the cost competitiveness of its petrochemical segment.
Through strategic procurement, expanded channel resources, and improved supply chain resilience, the company has built a comprehensive cost-competitive advantage across the industrial chain.
Quarterly Performance Highlights
Looking at quarterly data, for the first quarter of this year, the company reported operating revenue of 54.052 billion yuan, a year-over-year increase of 25.50%, and a net profit of 3.718 billion yuan, up 20.62% year-over-year.
Based on this, it is estimated that the net profit for the second quarter is approximately 6.082 billion to 6.682 billion yuan, representing a sequential quarter-over-quarter increase exceeding 60% and setting a new high for single-quarter profitability in recent years.
Overall, the consecutive positive growth over two quarters has successfully reversed the situation from 2025 where the company experienced revenue growth without corresponding profit increases.
Major Capital Increases to Accelerate Battery Materials Business
Wanhua Chemical is a globally operating established company in the chemical new materials sector, primarily engaged in the research and development, production, and sales of polyurethane, petrochemicals, fine chemicals, and new materials products.
In recent years, leveraging its industrial synergy advantages, the company has gradually expanded its business layout into the lithium battery field, establishing battery materials as its second core business. It has launched several large-scale projects across the country and is accelerating the integration of upstream and downstream industry chains.
Among these, the company's wholly-owned subsidiary, Wanhua Chemical Group Battery Technology Co., Ltd. (referred to as Wanhua Battery Tech), oversees the battery materials and related chemicals business. It has advanced a series of business deployments, and its current product portfolio includes lithium iron phosphate (LFP), graphite anode materials, battery-grade sulfates, N-methylpyrrolidone (NMP), polyacrylic acid (PAA), among others, widely used in new energy vehicles, energy storage, consumer electronics, and other fields.
On June 5th this year, Wanhua Battery Tech and its subsidiary, Wanhua Chemical (Yantai) Battery Industry Co., Ltd. (referred to as Wanhua Battery Industry), completed substantial capital increases on the same day, with their registered capital seeing significant jumps.
Specifically, the registered capital of Wanhua Battery Tech increased from 3.415 billion yuan to 4.9 billion yuan, a rise of approximately 43.49%, and it remains a wholly-owned subsidiary of Wanhua Chemical. The registered capital of Wanhua Battery Industry increased from 1.8 billion yuan to 4 billion yuan, an increase of over 122%.
Following the capital increase, the subscribed capital contributions of Wanhua Battery Tech and Yantai Zhongtao Investment Co., Ltd. in Wanhua Battery Industry are 3.2 billion yuan and 800 million yuan respectively, maintaining shareholding ratios of 80% and 20%.
From an industry development trend perspective, the global new energy vehicle and energy storage industries continue to maintain rapid growth. Downstream market demand for high-performance lithium battery materials is persistently climbing, and competition within the sector is intensifying.
The company's significant capital injection aligns with its overall capacity expansion plan for the battery materials business. It also provides ample financial support for the production capacity ramp-up and market expansion of products like lithium iron phosphate, fully demonstrating Wanhua Chemical's determination to accelerate capturing market share in the lithium battery materials track and fully establish its second core business.
Aiming for the Top Tier in Lithium Iron Phosphate
The company had previously initiated a 100,000-ton LFP project and a 30,000-ton LFP modification project in Meishan, Sichuan. This year, the pace of project advancement has further accelerated, with several large-scale LFP projects launched in Yantai and Binzhou, Shandong province.
In February, environmental impact assessment documents for three projects in Yantai were approved simultaneously: the Laizhou annual 650,000-ton LFP project, the Haiyang Green Power Industrial Park Phase II annual 200,000-ton LFP project, and the Haiyang Green Power Industrial Park Phase III annual 200,000-ton LFP project.
The total investment for these three projects exceeds 12.9 billion yuan, with a combined planned capacity of 1.05 million tons. In March, project implementation proceeded rapidly, with the Laizhou Phase I 320,000-ton project and the Haiyang Phase II and III projects all commencing construction smoothly.
Concurrently, the 100,000-ton capacity of Haiyang Green Power Industrial Park Phase I was completed and put into operation. Overall, the planned total LFP capacity at the company's Yantai base alone has reached 1.15 million tons.
In June, new progress was reported regarding the company's capacity layout in Shandong. Firstly, on June 5th, Wanhua Battery Industry established two wholly-owned subsidiaries: Wanhua (Binzhou) New Energy Co., Ltd. and Wanhua (Binzhou) New Energy Materials Technology Co., Ltd.
Subsequently, the company published an announcement on its official website titled "Public Notice for Soliciting Opinions on the Environmental Impact Report for the Annual 70,000-ton Lithium Carbonate and Supporting Public Auxiliary Project of Wanhua (Binzhou) New Energy Materials Technology Co., Ltd."
According to the document, the project is located in the Beihai Economic Development Zone, Binzhou City, Shandong Province, constructing production facilities for an annual output of 70,000 tons of battery-grade lithium carbonate, including two lithium sulfate production lines and two lithium carbonate production lines.
It was noted that as early as December 2025, the company signed a flagship project worth tens of billions with the Binzhou Municipal People's Government: the "Wanhua Chemical Binzhou Battery Materials Green Power Industrial Park Project."
With the public notice of the environmental impact assessment document for the 70,000-ton battery-grade lithium carbonate project, it signifies that the Binzhou base is about to commence construction and will become one of the company's core battery materials bases.
According to the company's plan, its LFP projects are expected to add 820,000 tons of new production capacity in 2026. Data shows that the utilizable LFP production capacity in 2025 reached 6.399 million tons per year. Among industry leaders, Hunan Yuneng's total lithium salt cathode material capacity is 995,000 tons/year, Dynanonic's capacity is 450,000 tons/year, and Wanon New Energy's operational capacity is 468,000 tons/year.
If the company successfully brings 820,000 tons of capacity online within the year, it would directly enter the first tier of the domestic LFP industry, surpassing Dynanonic and Wanon New Energy, and potentially forming a duopoly with Hunan Yuneng.
Furthermore, according to previous forecasts from Guosen Securities research reports, the company is expected to achieve a dual "million-ton" capacity scale of 1 million tons each for ferric phosphate and lithium iron phosphate by 2027.
Supporting such a massive capacity scale solely through independent efforts would be challenging amidst rapid expansion. In practice, the company has planned early and is steadily advancing project implementation through strategic upstream-downstream cooperation and integrated industry chain layouts, with initial results already evident.
Upstream, through investments in companies like Anda, Liuguo Chemical, and Hubei Huiyang New Materials, the company has secured resources and capabilities in refined phosphoric acid, phosphate rock, and supporting phosphorus chemical operations.
Additionally, it was noted that on June 29th, Wanhua Sichuan Battery Materials, a subsidiary of Wanhua Chemical, jointly established a joint venture, Sichuan Dazhong New Energy Co., Ltd., with Dazhong Mining. The joint venture has a registered capital of 300 million yuan, and its business scope includes manufacturing and sales of electronic specialty materials, production of chemical products, etc.
Midstream, the company entered the ferric phosphate field through Anda and formed a strong partnership with Xingfa Group. Notably, in March this year, the first environmental impact assessment public notice was issued for Hubei Huaxing New Energy Co., Ltd.'s annual 240,000-ton iron-based ferric phosphate project.
The construction site is in the Yidu Chemical Park, Hubei Province, with a planned operational date in 2027. The project company is capitalized at 600 million yuan, jointly held by Wanhua Battery Industry and Xingfa Group with 70% and 30% stakes respectively.
Furthermore, the 15-billion-yuan, 600,000-ton ferric phosphate project in Yichang, a collaboration between the company and Xingfa Group, has already commenced construction.
On the product front, the company has achieved mass production of its fourth-generation LFP product and introduced it to customers, with its fifth-generation product gaining recognition from leading clients.
Moreover, the company has achieved sales breakthroughs for its continuous graphitization and silicon-carbon anode material products. Sodium-ion battery development has also completed the finalization of its third-generation product, industrialization, and customer validation.
As subsequent production capacities are gradually released, the company's competitive advantages in the lithium iron phosphate field will continue to amplify, further opening up new avenues for performance growth and potentially reshaping the competitive landscape of the domestic LFP industry.
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