The aramid fiber business continues to attack, and the decline in the spandex boom drags down the H1 performance. In 22H1, the company’s aramid fiber and spandex business achieved revenue 10.08, 9.37
100 million yuan, a year-on-year change of 31.48% and -30.60%. In terms of gross profit, the gross profit of spandex decreased by 77.27% year-on-year, and the proportion of gross profit decreased from 57.78% to 20.46%; the gross profit of aramid fiber increased by 20.88% year-on-year, and the proportion of gross profit increased from 42.22% to 79.54%. In terms of gross profit margin, the company’s aramid gross profit margin was 38.63%, a year-on-year decrease of 3.39
percentage points; the gross profit margin of spandex was 10.69%, a year-on-year decrease of 21.96
percent. The main reason is that the decline in the boom of spandex has led to a drop in selling prices, superimposed factors such as the suspension of some old production capacity in the company’s Yantai Park, and the production and sales have dropped significantly, dragging down the performance. However, the company’s aramid business continued to grow. The sales volume of meta-aramid fibers in the high-end protection field has increased rapidly. At the same time, the optimization of the variety structure has brought about a steady increase in the price, and the overall production and sales have reached the best level in history. Demand in the communication and rubber fields remained strong, while sales in overseas markets increased rapidly, and both sales and prices achieved double growth.

The spandex boom rebounded at the bottom, and the company’s dual-base differentiated strategic layout Benefited from the decline in the cost of raw materials, the spandex spread rebounded at the bottom, and the profitability was repaired upward; on August 29, the spandex spread (excluding tax) was 11853
RMB/ton, up about RMB 4,500/ton from the year low in June. The company’s spandex production capacity is distributed in two bases in Yantai and Ningxia, aiming at the world-class level in the Yantai Park, and newly built 1.5
The high-efficiency differential crude denier spandex project of 10,000/tonne per year promotes the improvement of efficiency, scale and benefit of differentiated products; at the same time, in Ningxia, where the price of production factors is relatively low, a low-cost expansion strategy is vigorously implemented, focusing on the development of large-scale, low-cost Cost, High Efficiency Spandex Products, New 3
10,000/ton year green differential spandex intelligent manufacturing project.

The company’s aramid fiber continues to attack, transitioning from a domestic leader to an international leader my country’s industrial tooling, bulletproof protection, 5G
Construction and other fields will bring about continuous growth in aramid demand; at the same time, especially the import substitution of para-aramid and the increase in exports are expected to drive domestic aramid volume. As a domestic leader in aramid, the company has a technological first-mover advantage. It plans to promote the non-public offering of shares in a timely manner, and accelerate the development of the aramid business by raising funds, so as to lay a production capacity foundation for enhancing international competitiveness. If the planned production capacity is put into production as scheduled, until 2024
The annual production capacity of the company’s meta-aramid fiber, para-aramid fiber and aramid paper will reach 20,000, 21,500, and 3,000 tons/year respectively, realizing the transition from domestic leader to international leader.

Incremental business is advancing steadily, and the market prospect is promising
10,000 meters per year, and is cooperating with leading downstream enterprises in many fields to promote the design and development of application scenarios. The company’s fiber green processing technology and related pilot projects are advancing in an orderly manner. This technology has the characteristics of environmental protection and high efficiency, and is expected to subvert the dyeing and finishing industry. The company’s lithium battery aramid coating film-making pilot production project has been launched, and is expected to be in 2023
Large-scale production was achieved in the first half of the year, and with the rapid development of the new energy vehicle field, its market prospects are very broad.