1. The revenue of household appliances has declined, and the segmented market has achieved great growth

Huitong Co., Ltd. is mainly engaged in the research and development, production and sales of modified plastics, and is one of the domestic modified plastics enterprises.

Huitong Co., Ltd. said that the year-on-year decrease in net profit was mainly due to the increase in the price of the company’s upstream raw materials compared with the same period of the previous year, and the increase in the company’s unit material cost compared with the same period of the previous year.

According to reports, Huitong’s raw materials mainly include polyolefins, polystyrenes, engineering plastics and others, and direct material costs account for more than 90% of production costs. When the price of main raw materials rises by 5%, it is expected to affect the cost of main business by 3 to 4 percentage points; when the price of main raw materials rises by 10%, it is expected to affect the cost of main business by 6 to 7 percentage points.

In the field of home appliances, the company achieved sales revenue of 1.242 billion yuan, a year-on-year decrease of 10.71%. According to data from the National Bureau of Statistics, from January to June 2022, the national output of household appliances (color TVs, refrigerators, washing machines, and air conditioners) totaled 295.128 million units, a year-on-year decrease of 7.51%.

Among them, the revenue of new energy vehicles, biodegradable, photovoltaic, 5G communication, special engineering materials and other fields has achieved great growth compared with the same period of the previous year. In the segmented market field, the sales revenue was 423 million yuan, a year-on-year increase of 52.07%.

In the automotive field, the sales revenue was 632 million yuan, a year-on-year increase of 43.09%. Among them, in the new energy vehicle field, Huitong achieved sales revenue of 149 million yuan in the first half of the year, a year-on-year increase of 216.35%. In-depth cooperation with BYD, Weilai, Xiaopeng, Ideal, Weimar, Huawei, Hezhong, Nezha, Leapao, Chery and other customers. In the first half of the year, the company was assigned projects for mainstream new models such as BYD, Nezha, Xiaopeng, and Weilai. In line with the new trend of lightweight in the automotive market, the company has developed fiber-reinforced and low-density materials, which have been widely recognized by customers and applied to automotive interior and exterior trim components.

In the field of photovoltaics, the company achieved sales revenue of 19.4903 million yuan, a year-on-year increase of 165.47%. The company has cooperated with a number of leading companies in the industry, including LONGi, JA Solar, Jinko, Canadian Solar, Chint, Suntech, etc. Some customers have achieved mass supply. In terms of products, the flame-retardant, weather-resistant and low-temperature resistant materials developed by the company are widely used in outdoor photovoltaic junction box components. In addition, the photovoltaic outdoor connector materials developed by the company solve the problems of high temperature and high humidity of similar materials that are easy to precipitate and corrode metals.

In the field of 5G communication, the company achieved sales revenue of 19.6261 million yuan, a year-on-year increase of 95.29%. The company’s customers cover well-known domestic and foreign companies such as Huawei, Ericsson, ZTE, Comba, Tongyu and Feirongda.

In the field of special engineering materials, the company invested in the establishment of Huitong Special Materials Technology Co., Ltd., which includes long-chain nylon, high-temperature nylon and transparent nylon and other special nylons, polyester elastomers, polyurethane elastomers and polyamide elastomers and other high-performance elastomers As well as other special polymer materials, it will be deployed to achieve import substitution and build an integrated platform for the “polymerization-modification” industrial chain. At present, the company’s long-chain nylon materials have been produced and sold in batches, which are mainly used in pipeline systems in the field of automobiles and new energy, and basket powder in the field of household appliances.

2. Income from biodegradable materials is 44.3023 million

In the first half of the year, the company increased the research and development of biodegradable materials, and achieved sales revenue of 44.3023 million yuan, a year-on-year increase of 458.73%. The company has successfully developed degradable film materials, degradable straw materials, injection molding and extrusion materials, which are widely used in disposable products, medical, electrical and electronic fields, and has obtained 1 authorized invention patent and 1 patent in the actual trial.

Huitong has mastered two core technologies of biodegradable materials, one is reactive compatibilization technology, that is, through continuous reactive extrusion technology, it can solve the interface between different degradable material components and between degradable materials and organic/inorganic fillers The problem of poor adhesion gives the material excellent
Different comprehensive mechanical properties (high toughness, balance of strength and toughness, etc.), while achieving organic/inorganic
The high filling of the powder, the filling amount can reach 45wt%, which endows the material with the characteristics of low cost. The second is the high heat resistance technology, that is, based on the reactive extrusion technology, by regulating the molecular topology of polylactic acid, the crystallinity of polylactic acid is greatly improved, and a transparent crystal nucleating agent is introduced at the same time to further improve the crystallinity of polylactic acid. , and finally successfully prepared with high crystallinity (>35%)
The polylactic acid products are finally endowed with high heat resistance (>100℃) characteristics. The technology is currently in the pilot stage, with a cumulative R&D investment of 3.78 million yuan. The developed modified PLA is used in straws, lunch boxes, and durable products.

The company’s foreign investment, Polys Biotechnology Co., Ltd., has mastered the new generation of lactide technology and PLA synthesis technology. As at the end of the reporting period, the Polysys project was progressing smoothly, with plant construction and equipment installation in progress.

3. Bio-based PA materials have been mass-produced, replacing PA12 and PA11

As of the interim report, Huitong Co., Ltd. has invested a total of 25.24 million yuan in the research and development of bio-based materials modification technology projects. The purpose is to develop a bio-based modified material, which has been mass-produced and can replace polyamide in some fields. PA12, PA11, used in home appliances and automobiles.

It is understood that the main raw material of special PA material comes from biological castor oil, and the bio-based content in the finished product can reach more than 60%.