Hebang Biotechnology expects 2024 H1 performance reduction

    Summary: On 10 July, Hebang Biotechnology issued a 2024 half-yearly performance reduction announcement, stating that the Q2 operating results were better than Q1. Moving forward, the company is set to further develop its market presence in the glyphosate market.   

    On 10 July, Sichuan Hebang Biotechnology Co., Ltd. (Hebang Biotechnology) issued a 2024 half-yearly performance reduction announcement, The company anticipates a net profit attributable to shareholders of the listed company ranging from USD26.66 million to USD31.99 million (RMB190 million to RMB228 million) in the first half of 2024, marking a YoY decrease of 63.02%–69.18%; the net profit, after deducting non-recurring gains and losses, is expected to be between USD25.96 million to USD31.29 million (RMB185 million to RMB223 million), representing a 62.39%–68.80% YoY decline.   

    Hebang Biotechnology said during the reporting period, under the impact of macroeconomic and market changes, the net profit decreased YoY due to the declining market price of its products. However, the second quarter of the operation improved significantly, with upsurging revenue and net profit compared to the first quarter.   

    Specifically, the pesticide sector was under destocking in 2023, and the industry's sluggishness has continued until now. As the world's No. 1 pesticide single product, glyphosate occupies about 30% of the global herbicide market share, accounting for 15% of the total global pesticide consumption, thus bearing the brunt of the industrial downturn with an overall price downward trend. As glyphosate and its intermediate PMIDA are the main products of Hebang Biotechnology, the decline in their market prices is a significant factor contributing to the substantial reduction in net profit. By April 2024, the process of destocking was nearing completion, and the continuous increase in overseas orders subsequently led to an uptick in glyphosate prices, which brought sharp growth to the company's Q2 performance.   

    In line with the national strategy on food security, Hebang Biotechnology believes that the large-scale adoption of genetically modified (GM) plants in the country is inevitable. This trend is expected to significantly boost future market demand for glyphosate, Consequently, the company is continuing to map out for glyphosate and its intermediary PMIDA. Currently, Hebang Biotechnology has ongoing projects for glyphosate and its intermediates, including a 200,000 t/a glyphosate project in Indonesia and a 500,000 t/a PMIDA project by Guangan Bimeida Biotechnology Co., Ltd., a subsidiary of Hebang Biotechnology. Upon completion, the company will have production capacities of 250,000 t/a for glyphosate and 700,000 t/a for PMIDA, positioning it as a global leader in both product categories.