Stock Price Hits All-Time High! Baofeng Energy's Net Profit Exceeded 10 Billion Yuan Last Year, Up Nearly 80% Year-over-Year

Billion-yuan coal chemical leader’s net profit surpasses 10 billion yuan for the first time last year, nearly an 80% year-on-year increase.

On March 12, Baofeng Energy (600989) released its latest annual report. The report shows that in 2025, the company achieved revenue of 48.038 billion yuan, a 45.64% increase year-on-year; net profit was 11.35 billion yuan, up 79.09%. The company stated that the significant revenue growth was mainly due to the commissioning of the Inner Mongolia coal-based new materials project, which drove a substantial increase in polyolefin product sales; at the same time, the decline in prices of raw materials such as crude oil and coal, along with a rebound in overall industry profits, further enhanced the company’s profitability.

According to the announcement, in 2025, Baofeng Energy’s polyolefin production and sales doubled, with polyethylene output reaching 2.5492 million tons, a 125% increase; polypropylene output was 2.4752 million tons, up 110.95%. Coking coal production was 6.9607 million tons, a slight decrease of 1.12% year-on-year.

Baofeng Energy stated that in the first half of 2025, driven by the rapid release of demand for polyolefins, profits across all production routes increased significantly. In the second half, due to the release of new capacity and a slowdown in demand growth, overall industry profits declined. However, coal-based olefin production still maintained a significant profit advantage over other raw material routes.

On the same day, Baofeng Energy also disclosed its profit distribution plan. The company plans to distribute a cash dividend of 0.4921 yuan per share (including tax) to small and medium shareholders, based on a total share capital of 7.273 billion shares. Major shareholders will receive 0.3906 yuan per share (including tax). The total cash dividends amount to 3.055 billion yuan, plus 2.036 billion yuan already distributed in the interim, totaling 5.091 billion yuan for 2025, accounting for 44.85% of the annual net profit.

From the industry perspective, in 2025, China’s polyolefin market experienced a pattern of “both supply and demand increasing, with prices under pressure.” On the supply side, according to JINLIANCHUANG data, domestic polyolefin capacity reached 88.095 million tons in 2025, a 12.9% increase year-on-year. The concentrated addition of new capacity continued to increase supply pressure. On the demand side, driven by policies to boost consumption and expand domestic demand, apparent consumption of polyolefins reached 85.03 million tons, up 10.7% year-on-year. However, demand growth remained slower than supply growth, resulting in a relatively loose supply-demand environment.

As a result, polyolefin prices generally declined in 2025. Data shows that the average domestic polyethylene price was 8,252 yuan/ton, down 7% year-on-year; the average polypropylene price was 7,113 yuan/ton, down 7.4%. However, the prices of upstream raw materials like crude oil and coal also fell, reducing industry production costs year-on-year, which partially offset the impact of falling product prices on profits.

Additionally, regarding production routes, oil-based olefins remain the main route for domestic polyolefin production, with a slight increase in capacity share. The announcement indicates that by the end of 2025, oil-based capacity accounted for 63% of polyethylene, up 1.8 percentage points year-on-year; coal or methanol-based capacity accounted for 19%; light hydrocarbon-based capacity made up 15%. For polypropylene, oil-based capacity accounted for 55%, up 2 percentage points; propane-based capacity was 23%, and coal or methanol-based capacity was 22%.

Entering 2026, due to ongoing tensions in Iran since late February, crude oil prices have remained high, with Brent crude approaching $100 per barrel. Meanwhile, coal prices have been relatively stable, and the spread between oil and coal prices has widened, increasing the cost advantage of coal-based olefin production. According to Zhuochuang Information data, as of March 10, the average costs of coal-based and oil-based olefins were 6,573 yuan/ton and 8,777 yuan/ton, respectively.

As China’s largest coal-based olefin producer, Baofeng Energy relies on the Ningdong National Energy and Chemical Base, with an olefin capacity of 5.2 million tons per year. The company’s Ningdong Phase IV 500,000-ton olefin project started construction in April 2025 and is expected to be completed and put into operation by the end of 2026. The Xinjiang olefin project and Inner Mongolia Phase II olefin project are also actively progressing, ensuring strong growth momentum in the future.

In the secondary market, as of March 13, Baofeng Energy’s stock price reached a record high of 35.4 yuan per share during trading, closing at 34.7 yuan, up 2.88% for the day, with a year-to-date increase of over 76%. The total market capitalization reached 254.468 billion yuan.