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On March 12, Baofeng Energy (600989.SH) released its performance report for 2025: Against the backdrop of challenging macroeconomic conditions and a period of deep adjustment in the industry, the company delivered excellent results characterized by high growth, high profitability, and strong cash flow. This demonstrated that its core profitability remained at the leading level in the industry, while its asset-liability structure continued to improve. Its solid performance proved its unshakable leadership position and strong industrial strength in such a complex market environment. The key figures in the annual report confirm a rise in all three aspects: volume, price, and profitability. In 2025, the company achieved operating revenue of 48.038 billion yuan, a year-on-year increase of 45.64% ； The net profit after deducting non-recurring items attributable to the parent company exceeded 10 billion yuan for the first time, reaching 11.519 billion yuan, a year-on-year increase of 69.91% ； The net operating cash flow reached 16.851 billion yuan, with a growth rate of as high as 89.39% ； Basic earnings per share was 1.56 yuan, representing a year-on-year increase of 79.31%. This result, which far exceeds market expectations, represents a solid step forward for Baofeng Energy as it enters a new phase of high-quality development. Capacity is being released on a large scale to establish a \"ballast stone\" for energy security. 2025 will be the year of capacity expansion for Baofeng Energy. With the full operation of Inner Mongolia’s 3 million tons per year coal-to-olefins project, the company’s total polyolefin production capacity has surged to nearly 6 million tons per year, securing its position as the leader in the domestic industry. This scale expansion is not merely a rise in numbers; it also represents the implementation of strategic initiatives. The company is able to replace over 30 million tons of oil imports each year, thereby effectively strengthening the security of the energy industry’s supply chain. Baofeng Energy has an annual methanol production capacity of 14 million tons, making it the largest methanol producer in China in terms of plant scale. By leveraging an integrated coal-methanol-olefins production chain, its cost per ton of methanol is 300–500 yuan lower than the industry average, highlighting its advantages in terms of scale and cost. This production capacity serves as a key force in replacing imported methanol domestically; it boasts one of the highest levels of flexibility in terms of both volume and price, enabling the replacement of 14 million tons of methanol imports each year, thereby significantly enhancing the degree of autonomy and control over China’s coal chemical industry chain. The concentrated release of production capacity has also provided a solid foundation for the growth in Baofeng Energy’s performance. During the reporting period, olefin products continued to enjoy strong sales and production volumes, serving as the key driver of overall revenue. Through technology integration and scale effects, Baofeng Energy is acting as a \"stabilizing force,\" providing sustainable internal momentum for China’s energy security and industrial upgrading. “The \"ultimate cost\" advantage enables profitability to remain stable across economic cycles. In an industry where competition in the polyolefin sector is becoming increasingly fierce, cost control is the only criterion for measuring a company’s core competitiveness. By 2025, Baofeng Energy’s cost advantages will be enhanced to new levels thanks to scale effects and technological advancements. Thanks to the massive scale-driven synergies, the total cost of the Inner Mongolia project is nearly 10% lower than that of the Ningdong base in Ningxia ； Compared to the traditional oil-based and gas-based approaches, the cost advantages of coal-derived olefins become even more evident; Baofeng Energy achieves a gross profit of 2,500 yuan per ton of olefin products, with a gross margin of 38.61%. In a research report, OpenSource Securities analyzed that, with declining raw material costs and relatively stable selling prices, Baofeng Energy experienced a significant margin expansion effect due to the increase in volume coupled with falling costs, thereby allowing its profitability to increase to the greatest extent possible. What is even more noteworthy is that this cost advantage has a strong exclusivity. The key core equipment for the Inner Mongolia project has been fully replaced with domestically produced alternatives; 23 technologies have reached international leading levels. This not only resolves the critical constraints in this industry but also ensures that the core technologies remain under control, enabling these major national assets to serve as a solid foundation for cost competitiveness. Driven by technological innovation, high-quality development gains further momentum. By 2025, Baofeng Energy will have invested 961 million yuan in research and development, a 27.11% increase compared to the previous year. Throughout that year, 115 various technical improvement projects aimed at reducing energy consumption and carbon emissions will be carried out, enabling precise distribution of production materials and accurate control of process parameters, thus helping to reduce energy consumption per unit of product over time. Throughout the year, 165 R&D projects were launched, 221 patents and software copyrights were obtained, and 8 scientific and technological achievements were registered – setting new records for previous years – thereby providing solid technical support for the high-end and refined transformation of the industry. Relying on the “Baofeng AI Industrial Brain,” Baofeng Energy has established an intelligent operation system that spans the entire industrial chain. All 3 coal mines under its ownership have passed the **-level intelligence assessment, and 4 projects have been selected as typical applications of artificial intelligence in the autonomous region; remarkable achievements have been made in the construction of smart factories. The deep integration of digitalization is accelerating the transition toward green and low-carbon development. During the reporting period, the company’s comprehensive energy consumption per 10,000 yuan of output value decreased by 9.42% on a year-on-year basis; it once again topped the list of leaders in terms of water efficiency for coal-based olefins in China, and its Wind ESG rating rose to AA level. Moving from “traditional manufacturing” to “green intelligent manufacturing,” Baofeng Energy is redefining the path for sustainable development in the coal chemical industry. Looking to the future, with the continuous improvement of the Ningdong facility in Ningxia, the full-capacity operation of the facility in Inner Mongolia, and the steady progress of the 4 million tons per year project in Zhundong, Xinjiang, Baofeng Energy has established a coordinated development framework based on three key facilities. More importantly, the company is accelerating its transition from a \"scale-driven\" to a \"product-driven\" model. The increased production of high-value products such as premium polyolefins and EVA will help the company break away from the competitive landscape of commodity materials and enter broader opportunities for profit generation. This will enable the company to deliver better performance to investors, support its energy strategy, and drive the high-quality development of the modern coal chemical industry.