Dear shareholders:
Looking Back at 2024: Steady Operations to Strive for Breakthroughs
Over the past year, China’s economy has demonstrated strong resilience amidst a complex and volatile global environment, entering a new stage of high-quality development; the Belt and Road Initiative has ushered in its second golden decade, yielding fruitful results in international cooperation; domestically, the total grain output has historically surpassed 1.4 trillion catties, further solidifying the foundation of the nation’s granary. However, the fertilizer industry as a whole has faced pressure, with significant fluctuations in urea prices; the chemical sector has shown a structural divergence, with new energy and new materials demonstrating growth momentum, while the traditional basic chemicals have shown weaker performance. Facing challenges, the Company has focused on three main lines: “safe operation, cost reduction and efficiency enhancement, and market expansion”. Through optimizing production management, strengthening cost control, and coordinating product marketing, the Company has maintained leading operational efficiency within the industry. During the reporting period, the Company achieved a net profit attributable to the parent company of RMB1,071 million, demonstrating robust financial strength. To reward shareholders for their long-term support, the Board proposes to distribute a final dividend of RMB0.1208 per share (tax inclusive) for the year 2024, with a payout ratio reaching 52%, sharing the development achievements with our shareholders.
Governance Enhancement: Standardized Operations and Transparent Communication
In 2024, the Board continued to improve the governance system, fully implementing the “Six Authorities”, standardizing the operation procedures of the “Three Meetings”. The “Management Measures for Independent Directors” was formulated, clarifying the selection mechanism and performance requirements for independent directors. By regularly organizing communication meetings with external directors, major operational matters were discussed in advance to ensure the scientific nature and transparency of decision-making. Meanwhile, the Company placed great emphasis on investor relations management, ensuring compliance in information disclosure and maintaining frequent and efficient interactions with the capital market. During the period, Mr. Yang Dongzhao, Mr. Li Ruiqing and Mr. Yu Changchun retired as directors of the Company. On behalf of the Board, I would like to express my sincere appreciation for their diligent, responsible and professional contributions during their tenure.
Outlook for the Future: Innovation-Driven and Green Leadership
The growth of the global population and the modernization of agriculture will drive the long-term stable improvement in the demand for fertilizers. Stricter domestic environmental policies will accelerate industry consolidation, with outdated urea production capacity gradually being phased out and the concentration of the phosphate fertilizer industry continuing to increase. The Company will strive to enhance the quality of its “Plant Nutrition Solutions” to meet people’s aspirations for a better life. In the chemical sector, methanol demand is expected to grow steadily with the recovery of downstream industries, while the pressure of overcapacity in acrylonitrile remains to be resolved. In addition, the policies of the Hainan Free Trade Port has provided strategic opportunities for the Company to expand into port logistics and international trade.
In the future, the Company will focus on the following directions:
1.Plant Nutrition: Facilitating fertilizer reduction and efficiency enhancement, stabilizing and increasing production, and establishing the quality positioning of “Plant Nutrition Solution Provider”;
2.Innovation Clusters: Developing a new chemical materials industry system centered on “carbon-rich gas-based”, “biomass-based” and “phosphorus resource-based”, strengthening technology research and development and the transformation of technological achievements;
3.Overseas Expansion: Exploring comprehensive utilization projects for overseas natural gas resources, expanding international development space.
Acknowledgments and Expectationss
Finally, on behalf of the Board, I would like to extend our sincere gratitude to all shareholders for their long-term trust and support. Every achievement of the Company is inseparable from the strategic guidance of the management and the hard work of all employees. In 2025, we look forward to continuing our journey with you to jointly create a new blueprint for high-quality development.
Hou Xiaofeng
Chairman
