Zhejiang Oceanking Development Co Ltd

Zhenyang Development announced on the evening of September 18 that, due to the impact of Middle East geopolitical conflicts, the price of ethylene, the company's main raw material, has continued to rise, increasing product costs and weakening operating results. The company plans to temporarily halt production and conduct maintenance at its 300,000-tonne-per-year vinyl-based new materials plant, namely its PVC plant. The shutdown will begin on September 19, 2026, and is expected to last no more than four months. The company said the move is intended to reduce operating losses and improve plant performance. Other plants are operating normally. The shutdown is expected to have a certain impact on operating revenue, but can reduce operating losses. Zhenyang Development is mainly engaged in the research, development, production and sales of chlor-alkali related products. Its main products include chlor-alkali products, MIBK products, PVC products and high-purity hydrogen. In the first half of 2026, the company achieved operating revenue of 1.166 billion yuan and net profit attributable to the parent company of 2.7503 million yuan. Among these, PVC products recorded revenue of 390 million yuan and costs of 480 million yuan in the first half. The company's PVC plant uses the ethylene-based process and is significantly affected by ethylene price fluctuations. This round of ethylene price increases began in late February 2026. The escalation of Middle East geopolitical conflicts severely affected passage through the Strait of Hormuz, disrupting the transport of international crude oil, naphtha, liquefied natural gas and other raw materials, and causing prices of most chemical products to fluctuate accordingly. Guosen Securities judged that international oil prices in September will fluctuate upward in the range of 80 to 100 US dollars per barrel, and cannot rule out the possibility of periodically breaking above 100 dollars per barrel. For ethylene-based PVC producers, the rise in raw material prices has not been fully passed through to product prices. As of the end of June, the average domestic price of ethylene-based PVC was 4,628 yuan per tonne, up only 67 yuan per tonne from the beginning of the year. The fact that raw material price increases far exceed product price increases is a common problem facing the industry.

Zhenyang Development released its 2026 interim report. Total operating revenue was 1.166 billion yuan, down 12.71% year on year. Net profit attributable to the parent company was 2.7503 million yuan, down 94.57% year on year. Net cash inflow from operating activities was 37.2621 million yuan, down 58.68% year on year. The company's asset-liability ratio was 43.37%, gross margin was 8.50%, return on equity was 0.15%, and diluted earnings per share was 0.01 yuan. The number of shareholders was 14,400, and the shareholding ratio of the top ten shareholders was 78.93%.

Zhenyang Development released its 2026 interim report on August 30. Due to falling prices of major products and a decline in gross margin, the company's revenue and net profit both decreased. Meanwhile, its major asset restructuring has received registration approval from the China Securities Regulatory Commission, and the company is about to be delisted and have its legal person status cancelled. During the reporting period, the company achieved operating revenue of 1.166 billion yuan, down 12.71 percent year on year. Net profit attributable to the parent company was 2.7503 million yuan, down 94.57 percent. Non-GAAP net profit was 5.7274 million yuan, down 88.77 percent. Net cash flow from operating activities was 37.2621 million yuan, down 58.68 percent. The company mainly produces chlor-alkali related products, with chlor-alkali product revenue of 630 million yuan, PVC product revenue of 390 million yuan, and MIBK product revenue of 79 million yuan. The average market price of caustic soda fell 10 percent from the beginning of the year, while the average price of calcium carbide based PVC declined slightly. Inventory write-down provisions increased to 30.2213 million yuan, further eroding profit. At the industry level, chlor-alkali capacity continued to expand, with total caustic soda capacity reaching 52.46 million tonnes and total PVC capacity reaching 30.75 million tonnes. Loose supply and demand put pressure on prices. Going forward, attention should be paid to the progress of the share swap and merger with Zhejiang Expressway Company and the price trends of major products.