On 26 July, 2016, Lianhe Chemical Technology Co., Ltd. (Lianhetech) released its H1 2016 financial figures.

• Total revenue: USD267.40 million (RMB1.77 billion), down 7.81% YoY

• Total profit: USD44.36 million (RMB294 million), down 17.70% YoY

• Net profit: USD37.13 million (RMB246 million), down 18.58% YoY

Source: Baidu

"In the past six months, our pharmaceutical business showed stable growth, while revenue from our pesticide business declined, affected by the downward trending pesticide market. Given the fact that agrochemicals account for a large part of our overall business, the decrease had a direct impact on our financial figures," explained Lianhetech.

Lianhetech's financial figures, H1 2016

Specifically, the company generated a revenue of USD227.73 million (RMB1.51 billion) from industry, down 14.38% YoY, and USD38.86 million (RMB257.56 million) from trading, up 71.86% YoY.

Figures for its industrial businesses were as follows,

- Pharmaceuticals and pharmaceutical intermediates

• Revenue: USD44.27 million (RMB293.42 million), up 12.88% YoY

• Gross profit margin: 38.54%, up 1.40 percentage points YoY

- Pesticides and pesticide intermediates

• Revenue: USD168.84 million (RMB1.12 billion), down 19.79% YoY

• Gross profit margin: 39.90%, down 3.02 percentage points YoY

- Performance and fine chemicals

• Revenue: USD8.43 million (RMB55.85 million), down 17.74% YoY

• Gross profit margin: 10.15%, down 2.78 percentage points YoY

- Other industrial products

• Revenue: USD6.20 million (RMB41.10 million), up 3.06% YoY

• Gross profit margin: 35.03%, up 5.16 percentage points YoY

In H1 2016, despite the decrease in revenue from pesticides, Lianhetech, following its strategy of “devoted, prospective, allied” and the aim of becoming a “global leading chemical and technology solutions provider”, managed to progress in each planned area of development.

 
In particular, the company vigorously developed its pesticide business during this period:

Construction of key projects

Two of Lianhetech’s wholly-owned subsidiaries were the focus for development:

• Lianhe Chemical Technology (Dezhou) Co., Ltd. was approved as a designated national pesticide manufacturer

• Lianhe Chemical Technology (Yanhua) Co., Ltd. has applied for approval to become a designated national pesticide manufacturer, with the application process going smoothly so far. The company is expecting their application to be approved in H2 2016

R&D and innovation

Due in part to the technological advantages the company holds, Lianhetech has signed cooperation agreements on R&D projects with a number of the top 10 global pesticide enterprises. Together with leading R&D teams from global pesticide giants, the company began work on a couple of projects in H1, researching innovative high efficacy and low toxicity pesticides.

To further develop production technologies for its three main businesses, the company has integrated information and resources from its Shanghai R&D Center, Jiangkou R&D Center and all technology departments of its subsidiaries.

Meanwhile, Lianhetech has established close partnerships with the Shanghai Institute of Organic Chemistry, Chinese Academy of Sciences, and Sinopec Shanghai Research Institute of Petrochemical Technology. By combining this with its innovative technological services, new synthesis methods and sustainably optimized production techniques, the company has developed a cooperation pattern covering experimental research to production.

Improvement in internationalization

In July 2016, the company announced its plan to set up a new wholly-owned subsidiary in Singapore. Moreover, it has also opened a new office in Europe recently in order to move closer to its key customers, provide better services and facilitate access to market information.

Lianhetech predicts that its financial performance between Jan. and Sept. 2016 will deteriorate further. Net profit over this period is estimated to be USD35.91 million-55.49 million (RMB237.99 million-367.80 million), down 15%-45% YoY.

“This is mainly due to fewer orders for some products, a result of clients’ periodic adjustment of pesticide stocks,” said Lianhetech.

This article comes from Insecticides China News 1608, CCM

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

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