Lianhe Chemical Technology Co., Ltd.: history, ownership, mission, how it works & makes money

A Brief History of Lianhe Chemical Technology Co., Ltd.

Lianhe Chemical Technology Co., Ltd., established in 2003, is located in the Zhangjiagang Free Trade Zone in Jiangsu, China. The company specializes in the production and sale of chemical products, particularly those used in the pharmaceutical and agrochemical industries.

By 2006, Lianhe Chemical had expanded its production capacity, primarily focusing on herbicides, fungicides, and other specialty chemicals. In 2010, the company further solidified its position by engaging in the research and development of new chemical technologies.

In 2015, the company was listed on the Shenzhen Stock Exchange under the ticker symbol 002250. The initial public offering raised approximately 900 million RMB (around 140 million USD), funding further expansion and R&D initiatives.

In 2020, Lianhe Chemical reported revenues of approximately 5.6 billion RMB (about 870 million USD), an increase of 18% from the previous year. The net profit for the same period was around 800 million RMB (125 million USD), indicating a robust growth trajectory fueled by increased demand for agricultural chemicals.

The company continued to invest in eco-friendly production methods, with a commitment to reducing carbon emissions by 10% by the year 2025. By 2022, Lianhe Chemical's market capitalization reached approximately 20 billion RMB (around 3.1 billion USD), reflecting a strong investor confidence and performance.

In the first half of 2023, Lianhe Chemical's revenue was reported at 3 billion RMB (approximately 470 million USD), with a net profit margin of 15%. This performance was driven by the demand for its innovative agrochemical products in both domestic and international markets.

The company's strategic collaborations with various global firms, particularly in Europe and North America, have enhanced its technological capabilities and market reach. As of October 2023, Lianhe Chemical is increasingly focusing on the development of biopesticides, aligning with global sustainability trends in agriculture.

Overall, Lianhe Chemical Technology Co., Ltd. has made significant strides in the chemical sector, marked by consistent growth in revenue, a strong market position, and an unwavering commitment to innovation and sustainability.

A Who Owns Lianhe Chemical Technology Co., Ltd.

Lianhe Chemical Technology Co., Ltd. (stock code: 002250) is a publicly traded company based in China, primarily engaged in the production of chemical products including fine chemicals, plastic additives, and specialty chemicals. As per recent data, the company has a market capitalization of approximately RMB 21.89 billion as of October 2023.

The ownership structure of Lianhe Chemical is comprised of a mix of institutional and individual investors. Major shareholders include:

• Lianhe Holdings Ltd. - 40.21% ownership
• China National Chemical Corporation - 10.78% ownership
• Other institutional investors - 27.94% ownership
• Public shareholders - 21.07% ownership

According to the company’s latest 2022 annual report, revenues totaled RMB 7.35 billion, a growth of 15.2% year-on-year. Net profit for the same period amounted to RMB 1.55 billion, reflecting a profit margin of 21.1%.

The following table outlines the top shareholders and their respective ownership stakes:

Furthermore, as of the end of Q2 2023, Lianhe Chemical reported total assets worth RMB 12.89 billion, with liabilities amounting to RMB 6.89 billion, resulting in a debt-to-equity ratio of 0.54.

The company operates several production facilities, emphasizing sustainability and innovation in its operations. In 2023, Lianhe Chemical announced an investment of RMB 1.2 billion towards expanding its production capacity by 25% to meet increasing demand in the fine chemicals market.

With a focus on research and development, Lianhe Chemical dedicates approximately 5.8% of its annual revenue to R&D initiatives. This commitment has led to the introduction of several new products in the past year, enhancing its market share in both domestic and international markets.

As a key player in the chemical industry, Lianhe Chemical’s stock has shown resilience, with a year-to-date performance of approximately 12.4% increase in share price, reflecting positive investor sentiment fueled by its robust financials and growth potential.

Lianhe Chemical Technology Co., Ltd. Mission Statement

Lianhe Chemical Technology Co., Ltd., a prominent player in the chemical industry, focuses on sustainable development and innovation. The company aims to provide high-quality chemical products while adhering to stringent environmental standards. Lianhe Chemical's mission is to enhance the quality of life through its commitment to excellence in the production of fine chemicals, agricultural solutions, and petrochemical products.

As of 2023, Lianhe Chemical reports a revenue of approximately RMB 8.5 billion, demonstrating a robust growth trajectory in an increasingly competitive market. The company prioritizes research and development, with an R&D expenditure that amounted to around RMB 800 million, accounting for about 9.4% of its revenue.

Lianhe Chemical also emphasizes the importance of environmental stewardship. The company has set ambitious goals to reduce carbon emissions by 25% by 2025, aligning its operations with global sustainability standards. This commitment is backed by strategic investments in cleaner technologies and processes.

The mission statement reflects the company's ethos: "Creating value through innovation, sustainability, and responsible management." This mantra underpins all operational decisions and strategic initiatives, ensuring Lianhe Chemical continues to deliver on its promise to stakeholders. With a workforce of over 5,000 employees, the organization fosters a culture of safety, efficiency, and continuous improvement.

Overall, Lianhe Chemical Technology Co., Ltd. strives to blend economic success with social responsibility and environmental sustainability, setting a benchmark in the chemical industry. The alignment of its mission with actionable goals positions the company favorably for future growth and innovation.

How Lianhe Chemical Technology Co., Ltd. Works

Lianhe Chemical Technology Co., Ltd. is engaged in the production and distribution of chemical products, particularly focusing on fine chemicals and intermediates for various industries, including pharmaceuticals and agrochemicals. The company operates primarily in China, with a growing footprint in international markets.

As of 2022, Lianhe Chemical reported an operating income of approximately RMB 6.12 billion, representing an increase from RMB 5.18 billion in 2021. The company’s net profit attributable to shareholders was around RMB 813 million, up from RMB 654 million the previous year.

The company operates several production facilities that leverage advanced technology to enhance efficiency and product quality. Their product portfolio includes over 100 types of chemical products, with a focus on three main segments: fine chemicals, specialty chemicals, and pharmaceutical intermediates.

Lianhe Chemical’s commitment to research and development (R&D) is evident, with R&D expenses amounting to approximately RMB 400 million in 2022, which corresponds to around 6.5% of total revenue. The company has filed numerous patents to protect its innovations, enhancing its competitive edge in the market.

In terms of market presence, Lianhe Chemical exports products to over 20 countries, with significant sales channels established in Europe and North America. In 2022, exports accounted for roughly 35% of the company’s total sales revenue.

The company also emphasizes sustainability in its operations. In recent years, Lianhe Chemical has made strides to reduce its carbon footprint, achieving a 10% reduction in greenhouse gas emissions per unit of production since 2020.

Financially, Lianhe Chemical has a robust balance sheet. As of the latest fiscal year, the total assets stood at approximately RMB 8.9 billion, with total liabilities of RMB 3.5 billion, yielding a debt-to-equity ratio of approximately 0.39. The company's return on equity (ROE) for 2022 was reported at 14%.

Overall, Lianhe Chemical Technology Co., Ltd. continues to leverage its operational strengths, market position, and focus on innovation to foster growth and expand its impact in the global chemical industry.

How Lianhe Chemical Technology Co., Ltd. Makes Money

Lianhe Chemical Technology Co., Ltd. operates primarily in the specialty chemical sector, focusing on the production of chemical intermediates and fine chemicals. The company benefits from a diversified revenue stream, leveraging several product lines and market segments to optimize profitability.

For the fiscal year 2022, Lianhe Chemical reported a total revenue of approximately RMB 5.89 billion, an increase of 8.4% from the previous year. The growth was driven largely by increased demand for its key products, particularly in the agricultural and pharmaceutical sectors.

The company’s revenue breakdown by segment is as follows:

The company’s main products include a wide variety of chemical compounds used in industries such as agriculture, pharmaceuticals, and materials science. For instance, one key product, the herbicide intermediate, has seen a market expansion due to rising demand for agricultural innovation and sustainability.

In terms of profitability, Lianhe Chemical’s gross profit margin for 2022 was reported at 25%, reflecting efficient production processes and favorable pricing strategies. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached approximately RMB 1.47 billion, corresponding to an EBITDA margin of 25%.

Cost of goods sold (COGS) has also played a pivotal role in the company’s financial health. The COGS for 2022 was reported at around RMB 4.41 billion, with the most significant costs arising from raw material procurement and production-related expenses.

Furthermore, the company has been increasing its investment in R&D to fuel future growth, with an expenditure of approximately RMB 350 million in 2022, representing about 6% of total revenues.

Market conditions have also favored Lianhe Chemical, with the global fine chemical market expected to grow at a CAGR of approximately 6.5% from 2023 to 2028. The company has strategically positioned itself to capture this growth by diversifying its product portfolio and expanding its market reach.

As of the latest quarterly results in Q3 2023, Lianhe Chemical reported revenue of RMB 1.67 billion, showing continued growth with a year-over-year increase of 9.2%. The robust performance indicates strong demand across its product lines, suggesting sustained momentum moving forward.

In summary, Lianhe Chemical Technology Co., Ltd. leverages a diverse product mix, strategic investments in R&D, and favorable market dynamics to drive revenue growth and maintain profitability in the competitive specialty chemicals sector.