Donghua Technology: Undertake 9 degradation projects and invest in 3 PBAT projects

Latest News: Donghua Technology disclosed its interim report on August 31, 2022. The company achieved a total operating income of 2.015 billion yuan in the first half of 2022, a year-on-year decrease of 8.7%; The parent’s net profit was 164 million yuan, a year-on-year increase of 23.1%; earnings per share were 0.31 yuan.

Donghua Technology is divided into two major businesses: “engineering” and “industrial”. Engineering business includes chemical industry, environmental management and infrastructure, and industrial business includes environmental facility operation and high-end chemical production. In the first half of the year, the revenue of the chemical industry was 1.674 billion yuan, a year-on-year decrease of 21.09%. The income of the environmental governance infrastructure industry was 302 million yuan, a year-on-year increase of 326.86%.

From January to June this year, the company has signed a total of 8.428 billion yuan of engineering contracts (including wholly-owned and holding subsidiaries), a year-on-year increase of 195.30%, of which: the contracted project general contract amounted to 8.145 billion yuan, a year-on-year increase of 205.63%; Design contracts totaled 283 million yuan, a year-on-year increase of 49.74%.

1. Undertake 9 engineering projects in the degradation industry

Donghua Technology originated from a large-scale design unit affiliated to the former Ministry of Chemical Industry. It has a development history of nearly 60 years. It is a modern technology-based engineering company that was restructured and listed earlier in the domestic engineering survey and design industry. Top 100 ranks, with strong overall strength and business ability.

In the field of new materials, the company has undertaken a number of general contracting, design and consulting projects for degradable materials such as PBAT, PBS, PPC, PHA and BDO, and initially formed the performance advantage of the whole industry chain of degradable materials.

In the degradable material industry, Donghua Technology has contracted Guangdong Xiangyuan PPC, Microstructure Factory PHA, Jinkong Tianqing PBAT, Shaanxi Huangling PBAT, Maoan Environmental Protection Biodegradable Material Integration, Daqing Oilfield Bio-based Polylactic Acid, Linhuan Coking Design and consulting projects related to degradable materials such as PBS, Xinjiang Tianying BDO, and Jingto Energy BDO.

2. Donghua Tianye 100,000 tons of PBAT construction period shortened by 1/3

Since last year, Donghua Technology has invested and constructed 3 high-end chemical production projects in the form of holding and equity participation. During the reporting period, one high-end chemical production project has been successfully started at one time.

With years of experience in engineering contracting and the construction of several PBAT projects, Donghua Technology’s 51%-owned subsidiary – Sinochem Donghua Tianye New Materials Co., Ltd. ), which has been successfully driven at one time in June 2022. The production plant is currently under commissioning and is operating at a low load.

The construction period of the project is shortened by about one-third compared with a project of the same scale. This project uses the company’s self-developed PBAT to synthesize high-efficiency titanium-based catalysts (see the figure below). It is understood that after the project is officially put into operation, the proportion of industrial business income in operating income will be greatly increased.

From the breakdown of R&D expenses, it can be found that Donghua Technology is involved in PBAT synthesis and catalysis, PBAT modification, PBST synthesis and catalysis, PHA technology development, and PLGA synthesis and development.

In terms of PBAT sales, the company and Xinjiang Tianye Co., Ltd. jointly established “Xinjiang Tianye Xiangtai New Materials Co., Ltd.”, which is responsible for the marketing and related value-added services of Donghua Tianye PBAT products.

3. Participation in Dawning Luhua and Shaanxi Coal Group PBAT project

In addition, Donghua Technology also invested in the Dawning Luhua project with an annual output of 100,000 tons of BDO and a combined production of 120,000 tons of PBAT, which is under construction. Donghua Technology also undertook the engineering construction of the PBAT production facility of Xinjiang Shuguang Luhua Biotechnology Co., Ltd.

Donghua Technology also cooperated with Shaanxi Coal Industry and Chemical Group Co., Ltd. to increase the capital of Shaanxi Coal Group Yulin Chemical Yudong Technology Co., Ltd. under the “Shaanxi Coal Group” Group to build the “Yumen New Energy Degradable Material Carbon Neutral Industrial Park Project” ”, the project construction content includes 360,000 tons/year of BDO; 300,000 tons/year of PBAT, 100,000 tons/year of PBT, 60,000 tons/year of PBS, 46,000 tons/year of PTMEG, etc.