【HaiChuan Discussion】Under the dual-control measures, a number of enterprises have reduced production and stopped operations – how is your enterprise doing?

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The last edit to this post was made by Desert Fish on 2021-9-23 at 13:32. According to Cailian News (Shanghai, editor: Zhang Yang), several A-share companies announced restrictions on power usage and production levels yesterday; among them was *ST Chengxing, a stock that saw its price soar by more than 2 times over a period of just over two months. Some companies have also provided corresponding explanations in their announcements regarding the potential impacts. 1. *ST Chengxing: Four core factories to cease production starting September 23, posing a significant negative impact on annual performance. *ST Chengxing announced last evening that, due to equipment maintenance and the need to mitigate risks associated with fluctuations in yellow phosphorus prices, the company has decided that its Jiangyin and Qinzhou factories will stop producing starting September 23, 2021; production at the Jiangyin factory is expected to resume around October 12, 2021 ； The Qinzhou factory is expected to resume production around September 30, 2021. Affected by the production controls on yellow phosphorus in Yunnan, the Xuanwei and Mile factories ceased operations on September 23, 2021, and it is currently impossible to estimate when production will resume. *ST Chengxing also stated that the aforementioned production suspensions and reductions will have a significant negative impact on the company’s ability to fulfill orders and on its product sales. The production suspensions in question will have a serious adverse effect on the company’s overall performance for the whole year, and it is currently not possible to provide an accurate estimate. It is worth noting that *ST Chengxing has seen strong stock price gains recently, with an increase of up to 229% since July. Image *ST Chengxing is mainly engaged in the production and sales of a range of high-quality phosphorus chemical products such as yellow phosphorus, phosphoric acid, and phosphates. In the first half of 2021, the company achieved operating revenue of 1.48 billion yuan, a 0.02% decrease compared with the same period the previous year ； The net profit attributable to the shareholders of the listed company was -3.2634 million yuan, a decrease of 172.10% on a year-on-year basis. Currently, the company is subject to lawsuits with a total involved amount of 2.059 billion yuan, and new lawsuits continue to arise. 2. Chenhua Co., Ltd.: Its wholly-owned subsidiary was forced to suspend operations of all its production lines on a temporary basis due to power supply restrictions. Chenhua Co., Ltd. also announced yesterday that, recently, as a result of tight electricity supply in Jiangsu, its wholly-owned subsidiary Huai’an Chenhua was compelled to temporarily shut down all of its production lines. Huai’an Chenhua actively responded to the **departmental requirements regarding power and production restrictions; the production facilities that were temporarily shut down included the polyether production facility (35,900 tons per year), the amino-terminated polyether (polyether amine) production facility (23,000 tons per year, of which 5,000 tons per year were related to fundraising projects), the flame retardant production facility (20,000 tons per year), and the alkyl glycoside production facility (20,000 tons per year, of which 15,000 tons per year were related to fundraising projects). Huai’an Chenhua will arrange measures such as optimizing process control and equipment maintenance during the temporary shutdown of all production facilities, in order to organize its daily operations effectively. Chenhua Co., Ltd. stated that in response to the sudden suspension of production at Huai’an Chenhua, the company will actively coordinate and adjust relevant operational arrangements in order to minimize the negative impacts caused by power shortages. It is worth noting that Chenhua Co., Ltd. is primarily engaged in the research, development, production, and sales of a range of new fine chemical products made from key raw materials such as olefins, fatty alcohols, and siloxanes. In the first half of the year, the company achieved operating revenue of 630 million yuan and net profit attributable to the parent company of 87.0701 million yuan, representing year-on-year increases of 63.94% and 57.17%, respectively. 3. Xidamen: Production is expected to be suspended until September 30. Xidamen announced on the evening of the 22nd that, due to power supply shortages, Zhejiang Province has recently ordered key energy-consuming enterprises in its jurisdiction to reduce their electricity consumption; these enterprises will be shut down while ensuring safety, with production expected to remain suspended until September 30. Zhejiang Xidamen New Materials Co., Ltd. (hereinafter referred to as the “Company”) is currently forced to suspend production on a temporary basis, which is expected to affect the production of sunshade fabrics by approximately 115,400 square meters per day. It is currently impossible to accurately predict the specific impact on efficiency. Seodaeumun stated that in order to minimize the impact of the temporary shutdown, the company will take measures such as scheduling equipment inspections and maintenance, as well as optimizing process controls, to reduce the negative effects of this temporary shutdown as much as possible. Ensure production continues without interruption. At the same time, the company will maintain active communication with customers to ensure timely and complete delivery of orders, meeting their deadline requirements. This temporary shutdown will not affect the delivery of the company’s current orders. According to the available information, Xidamen is primarily engaged in the research, development, production, and sales of functional sunshade materials, with its main products including solar fabrics, coated fabrics, and light-regulating fabrics. In the first half of 2021, the company achieved operating revenue that increased by 39.58% on a year-on-year basis, reaching 208 million yuan; its net profit attributable to the parent company rose by 31.75% year-on-year, amounting to 45.4992 million yuan. 4. Tianyuan Shares: Affected by the dual controls on energy consumption, calcium carbide production may decrease by about 25,000 tons per month. Tianyuan Shares announced that recently, the Yunnan Provincial Development and Reform Commission issued a notice titled \"Notice from the Office of the Yunnan Provincial Energy Conservation Work Leading Group on Thoroughly Implementing the Relevant Provisions on Dual Controls on Energy Consumption.\" In accordance with the relevant requirements outlined in the notice, the company’s calcium carbide production facility in Yunnan Province, namely Shuifu Jinming Chemical Co., Ltd., has suspended operations on a temporary basis ； Daguan Tianda Chemical Co., Ltd. and Yunnan Tianli Coal Chemical Co., Ltd. arrange their production according to one production line each. If this policy is continued, it will result in a reduction of the company’s calcium carbide production by approximately 25,000 tons per month. According to available information, Tianyuan Co., Ltd. is the largest and most competitive chlor-alkali enterprise in the southwest region. The company’s main products include PVC, ion-exchange membrane caustic soda, hydrazine hydrate, cement, trichloroethylene, titanium dioxide produced by chlorination methods, polystyrene, PVC-O pipes, LVT flooring, and various plastic piping products.