Press Release

(For immediate release)

China XLX’s Profit for 9M 2024 Surged by 80% YoY

Efforts in Efficiency Enhancement, Cost Reduction and Resources Optimization
Produced Remarkable Results

Results highlights for first three quarters in 2024:

• Net profit climbed 75.8% YoY to RMB 2.031 billion.
• Net profit attributable to owners of the parent company surged 80.7% YoY to RMB 1.534 billion.
• Basic earnings per share grew 85.3% YoY to RMB 1.26.
• Financial position continued to improve with the gearing ratio dropped to 59.4%.

(31 October 2024, Hong Kong) China XLX Fertiliser Ltd. (“China XLX” or the “Company”, together with its subsidiaries collectively known as the “Group”) (HKSE: 01866.HK) announced that the Group’s revenue for the nine months ended 30 September 2024 (the “Period”) amounted to approximately RMB 17.42 billion. Net profit increased by 75.8% YoY to approximately RMB 2.031 billion. Net profit attributable to owners of the parent company surged by 80.7% YoY to RMB 1.534 billion.

In the first three quarters of 2024, benefiting from the decline in feedstock costs and the stable operation of production, the Group’s gross profit grew by 5% YoY. Through effective cost management, its administrative expenses and financial expenses decreased by 2% and 13% respectively. In addition, the disposal of Tianxin Coal generated an investment gain of approximately RMB 790 million. The above factors led to a significant increase in the Group’s net profit. In this regard, the Group completed the capital increase in its non-wholly owned subsidiaries and enlarged its shareholding to 80.18%, leading to a significant increase in the net profit attributable to the parent company.

As the global economy gradually picked up, the market demand for the Group's main products remained stable. Although fluctuations in raw material prices weighed on the product prices, the Group achieved stable improvement in its operating results by expanding production capacity and sales channels. The sales revenue of fertiliser segment, chemical segment, gas segment and medical intermediate accounted for 60%, 36%, 2% and 2% respectively of the total revenue.

During the Period, the sales volume of urea products increased by 33% YoY to 2.768 million tons mainly due to the expansion of production capacity and resumed operation of some production facilities. Meanwhile, with stepped-up efforts to promote high-efficiency compound fertilisers and differentiated fertilisers, the overall gross profit margin of compound fertilizers increased by 5% YoY. Underpinned by the economic recovery, the demand for methanol recovered and its sales volume for the period increased by 17% YoY, and the gross profit margin increased by 8% YoY.

The Group flexibly adjusted its production capacity and bolstered production efficiency to further meet the needs of downstream manufacturing industries. Although the price of melamine decreased by 8% YoY due to the weakness of real estate market, its sales volume increased by 9% YoY as the Group explored the international market, leading to an increase in the export volume (especially Turkey).

In the first three quarters of 2024, with the support of technological improvement and stable equipment operation, the sales volume of DMF increased by 33% YoY. In terms of the pharmaceutical intermediate segment, the Group optimized the product structure and increased the proportion of sales of high value-added products, with its average selling price increasing by 18% YoY.

Looking ahead into the future, Mr. Liu Xingxu, Chairman of China XLX, said: The fourth quarter will see the peak demand season for winter. With the support of macroeconomic policies, the price of coal feedstock is expected to stabilize and rebound, forming effective support for fertiliser prices. Meanwhile, with the implementation of environmental protection and production capacity control policies, the supply of nitrogen fertilisers will reduce in stages. Driven by the demand arising from winter fertiliser reserves and off-season procurement, fertiliser prices are expected to gradually stabilize. The Group will continue to promote green and low-carbon transformation through technological innovation and industrial chain extension, thereby enhancing product value and promoting high-quality development.

Mr. Liu Xingxu pointed out that China XLX will leverage its competitive edges in R&D to promote the development of new chemical materials and fine chemicals to meet the market demand for high-performance and high value-added products and ensure the Group’s sustainable growth in the long run. Through optimizing the product structure and improving resource utilization efficiency, the Group will sharpen its competence and achieve it sustainable development goals.

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About China XLX Fertiliser Ltd.

China XLX Fertiliser Ltd. is one of the largest and most cost-efficient coal-based urea producers in China. It is principally engaged in developing, manufacturing and selling of urea, compound fertiliser, methanol, dimethyl ether, melamine, furfuryl alcohol, furfural, 2-methylfuran, pharmaceutical intermediates and related differentiated products. The Group adheres to the development strategy of “maintaining overall cost leadership and creating competitive differentiation" while strengthening the core fertiliser operations. With support of the resources in Xinxiang, Xinjiang and Jiangxi, it extends the value chain to upstream new energy and new materials and diversifies into coal chemical related products. The Company’s shares (stock code: 01866.HK) are traded on the main board of the Hong Kong Stock Exchange.

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