China XLX Announces 2025 Half-Year Results

08/10/2025 – 06:30 AM

Q2 Profit Saw Strong QoQ Rebound

On Improved Sales Volume and Selling Prices of Products

2025 Interim Results Highlights：

• Q2 revenue grew by 16.7% QoQ to approximately RMB 6.82 billion.

• Profit attributable to owners of the parent for Q2 surged by 103.4% QoQ to approximately RMB 402million.

• The Group continued to optimize the debt structure, with the ratio of long-term borrowings to short-term borrowings improved from 6:4 at the beginning of this year to 7:3 at the end of June and the finance expenses dropped by 14% YoY in the first half.

• The debt-to-asset ratio stayed at a healthy level of 63.5%.

HONG KONG, HK – China XLX Fertiliser Ltd. (“China XLX” or the “Company”), a key player in the fertilizer industry, announced a significant rebound in its second-quarter performance for 2025. Revenue for the three months ended June 30, 2025, climbed 16.7% quarter-over-quarter, reaching approximately RMB 6.82 billion, according to a recent company statement. Profit attributable to owners mirrored this upward trajectory, soaring 103.4% quarter-on-quarter to around RMB 402 million. These figures signal a robust turnaround following a challenging start to the year.

Looking at the first half of 2025, China XLX reported revenue of approximately RMB 12.666 billion, a 5.0% increase year-on-year. However, profit attributable to owners for the same period dipped 12.8% year-on-year to approximately RMB 599 million. The company attributed the initial sluggishness to lower product prices but emphasized the strong recovery seen in the second quarter.

The revitalized performance in Q2 was fueled by a rebound in the selling prices of key products, notably urea and melamine. This price correction was attributed to a gradual uptick in downstream demand, suggesting a strengthening market environment. Furthermore, enhanced marketing strategies and the strategic deployment of new production capacity allowed China XLX to capitalize on the growing demand, leading to increased sales volumes across various product lines.

A closer look at specific segments reveals that urea sales in the first half totaled approximately RMB 3.225 billion, a 16% year-on-year decrease primarily due to a 19% year-on-year drop in average selling prices. This decline was largely attributed to market imbalances, export controls, and reduced feedstock prices early in the year. However, urea prices began to recover in the second quarter, rising 10% compared to the previous quarter, as export policies clarified and downstream demand continued to build. China XLX strategically leveraged the eased export controls to expand its presence in overseas markets, resulting in an increase of 47,000 tons in exports compared to the previous year and a 4% year-on-year growth in urea sales volume. The company also focused on refining its production technology and capitalizing on lower coal prices to negotiate better deals with suppliers, ultimately reducing the average production cost by 7% year-on-year.

Revenue from compound fertilizer sales saw a positive trend, growing by 5% year-on-year to approximately RMB 3.566 billion in the first half, driven by an 8% year-on-year increase in sales volume. The successful launch of the Guangxi Production Base has enabled China XLX to effectively serve the Guangdong, Guangxi, and Hainan markets. Strong agricultural demand in South China, a key region for cash crop production, spurred steady growth in compound fertilizer sales, leading to an 11% year-over-year increase in the sales volume of high-efficiency fertilizers. The Guangxi facility further solidifies China XLX’s position in the regional market.

The methanol segment also experienced growth, with revenue reaching approximately RMB 1.642 billion in the first half, representing a 27% year-over-year increase. As the growth rate of production capacity in the market slowed and numerous downstream facilities commenced operations, the methanol market showed signs of improvement. China XLX proactively secured strategic long-term agreements with upstream suppliers. By stabilizing selling prices and expanding foreign trade, the sales volume of methanol grew 28% year-on-year.

China XLX has been actively optimizing its debt structure and diversifying its financing channels. The ratio of long-term borrowings to short-term borrowings improved from 6:4 at the beginning of the year to 7:3 by the end of June. These loan arrangements are designed to align with the development cycles of the Group’s projects, address their funding requirements adequately, alleviate short-term debt repayment pressure, and bolster the overall debt structure.

Furthermore, the company has taken advantage of interest rate cuts to refinance high-interest loans, resulting in a 0.8 percentage point decrease in average lending rates and a 14% year-on-year decrease in finance expenses during the first half. As of the end of June, the Group’s debt-to-asset ratio remained at a stable 63.5%. The upcoming commencement of Phase II of the Jiangxi Project in the third quarter of this year is expected to generate positive cash flow, reducing capital expenditure pressure for the full year and maintaining a healthy debt-to-asset ratio.

Looking ahead, Mr. Liu Xingxu, Chairman of China XLX, commented on the outlook for the second half of the year, stating, “Urea prices are expected to stabilize amidst sufficient supply in the domestic nitrogenous fertilizer market, stable demand and orderly adjustment of urea exports. Furthermore, as the modernization of China’s agriculture gathers momentum, the country’s crop cultivation areas will continue to expand. There is robust demand for high-efficiency fertilizers from large-scale farmers.” He further emphasized the company’s commitment to research and application of advanced technologies and its strategy of driving “high-quality development based on fertilizer business.”

The Phase II of the Jiangxi Production Base is scheduled to commence production in the third quarter of this year, with the New Chemical Materials Project at the Xinxiang Production Base slated to begin operations in the first quarter of 2026. Concurrently, the development of new production bases in Guangxi and Zhundong is progressing as planned. Upon full operational status of all facilities under construction by 2027, China XLX anticipates a significant surge in cash inflow, far exceeding capital expenditures, thus establishing a sustainable cycle of “investment, output, and growth.”

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About China XLX Fertiliser Ltd.

China XLX Fertiliser Ltd. is one of the largest and most cost-efficient coal-based urea producers in China. It is principally engaged in developing, manufacturing, and selling of urea, compound fertiliser, methanol, dimethyl ether, melamine, furfuryl alcohol, furfural, 2-methylfuran, pharmaceutical intermediates, and related differentiated products. The Group adheres to the development strategy of “maintaining overall cost leadership and creating competitive differentiation” while strengthening the core fertiliser operations. With the support of the resources in Xinxiang, Xinjiang, and Jiangxi, it extends the value chain to upstream new energy and new materials and diversifies into coal chemical-related products. The Company’s shares (stock code: 01866.HK) are traded on the main board of the Hong Kong Stock Exchange.

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File: 【Press Release】China XLX Announces 2025 Interim Results
File: China XLX Announces 2025 Interim Results

SOURCE: China XLX Fertiliser Ltd.

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