HZ Info, July 2 – Huafon Chemical released its 2026 semi-annual performance forecast, announcing a sharp jump in the company’s profitability. According to the disclosed data, the company estimates its net profit attributable to shareholders of listed companies for the first half of 2026 will surge by 70.85% to 111.53% year-on-year, translating to a net profit range of RMB 1.68 billion to RMB 2.08 billion, representing an impressive upward performance momentum.
Huafon Chemical outlined the core drivers behind its robust H1 performance growth. During the reporting period, market conditions across the chemical industry improved steadily. Driven by rising raw material prices and dynamic adjustments in downstream market demand, selling prices for the company’s core products trended upward, delivering a marked improvement in gross profit margins. Meanwhile, guided by the core development objective of profit growth, the company continued to optimize its internal operation and management systems, ramped up market expansion efforts and investment in core technological R&D. Production capacity and economic returns from previously launched fundraising investment projects have gradually come online. The combined effect of multiple favorable factors has lifted the company’s overall profit levels and steadily strengthened its comprehensive competitiveness.
As a leading enterprise in the polyurethane chemical sector, Huafon Chemical’s core product portfolio covers three major categories: spandex, adipic acid and polyurethane prepolymers, with prominent scale advantages in capacity deployment at 475,000 tons, 1.355 million tons and 520,000 tons respectively, securing a pivotal market position within the industry. Each of the three core product segments boasts unique growth opportunities and industrial characteristics, while industry trends including higher market concentration and emerging demand surges have laid a solid foundation for the company’s long-term growth.
Spandex: Solid Leading Position, New Growth Space Unlocked via High-End Differentiated Applications
Spandex constitutes Huafon Chemical’s flagship competitive product, and the company retains its status as a global industry leader supported by massive production capacity. Statistics show global total spandex capacity reached 1.955 million tons by the end of 2025, predominantly concentrated in Asia, with an annual year-on-year capacity expansion of 11.7%; nearly all new global capacity additions stemmed from mainland China. Mainland China’s spandex capacity hit 1.5325 million tons, up 13.1% year-on-year, marking the fastest capacity growth rate in the past five years. Backed by its large-scale capacity layout, Huafon Chemical accounts for 24.3% of global total spandex capacity and an impressive 31.0% of domestic capacity, cementing an unassailable market leadership moat.
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From the domestic supply-demand landscape, China’s spandex industry saw buoyant supply and demand throughout 2025. Annual spandex output stood at 1.09 million tons, a 4.3% year-on-year increase. Export volumes expanded moderately to 81,000 tons, rising 3.1% year-on-year, while imports continued to contract to 35,000 tons, down 23.6% year-on-year. Over the same period, domestic apparent demand reached 1.043 million tons, growing 3.1% year-on-year. After adjustments for inventory fluctuations, actual domestic spandex demand growth hit 9.6%, reflecting resilient downstream consumption.
The spandex industry is currently undergoing a transition between old and new development cycles, presenting both opportunities and challenges. In the short term, the sector faces headwinds including concentrated new capacity rollouts, tightening environmental regulations and intensifying market competition, accelerating industry consolidation and the phase-out of underperforming players. From a long-term perspective, rising industrial concentration will amplify the leader advantage and reinforce the competitive edges of top-tier manufacturers. Furthermore, upgrading consumer spending and textile industrial transformation have enriched differentiated and functional spandex product offerings, lifting penetration rates in traditional textile applications. Beyond that, spandex currently maintains low penetration in high-end segments such as medical consumables and automotive interiors. These emerging tracks will become key growth engines for the industry, bringing brand-new development opportunities for frontrunners including Huafon Chemical.
Polyurethane Prepolymers: Stable Traditional Markets, Incremental Gains Generated by Emerging Segments
Known as the “fifth-largest plastic”, polyurethane is a versatile emerging organic polymer material with wide-ranging downstream applications covering shoe materials, shock-absorbing pads, tires, furniture and more, supported by rigid market demand. Within the core shoe material track, the domestic sole prepolymer market has stabilized with minor annual demand fluctuations and smooth overall market operation. Data indicates the global polyurethane footwear market reached USD 6.04 billion in 2025, growing 7.8% year-on-year amid sustained steady industrial expansion.
Notably, substantial room remains for polyurethane prepolymer penetration in China’s shoe material sector. The material currently accounts for less than 10% of domestic shoe material raw materials, far below the 20% penetration level observed in developed economies, leaving ample upside potential within the traditional footwear market. In terms of industrial landscape, the polyurethane prepolymer sector follows a pattern of “leading players gaining market share while small inefficient capacities exit”. Persistent supply pressures linger, and low-efficiency small-scale capacities continue to be phased out. Top manufacturers secure dominant market shares through advantages in capacity, cost and technology, whereas smaller enterprises grapple with chronically low operating and capacity utilization rates. Squeezed by weak demand and mounting cost pressures, SMEs face shrinking profit margins, which is expected to further lift industry concentration and benefit large-scale players like Huafon Chemical.
Long-term growth momentum for polyurethane prepolymers remains robust. Driven by improved living standards and continuous material technology innovation, beyond conventional shoe materials, polyurethane prepolymers are seeing breakthrough applications in emerging fields including automotive parts, high-speed rail shock absorbers, premium tires and 3D printing. These tracks are still in early development stages with massive untapped market potential, delivering ample incremental room for future industry and corporate earnings growth.
Adipic Acid: Accelerated Industrial Transformation & Upgrading, Domestic Technological Breakthroughs Remove Growth Ceilings
Adipic acid is a vital basic chemical feedstock, with downstream demand concentrated primarily in two core sectors: nylon PA66 and polyurethane, widely deployed in the production of sole prepolymers, PU slurry, TPU and other products. The global adipic acid market currently boasts ample supply and full market competition. Overseas capacity is monopolized by international chemical giants including BASF, Invista and Ascend Performance Materials, while domestic capacity is clustered around leading firms such as Huafon Chemical, Shenma Industry and Hengli Petrochemical, forming a clearly defined competitive landscape.
Domestically, China has emerged as the world’s core adipic acid production hub. The industry is shifting from a traditional capacity-expansion growth model toward high-quality development, standing at a critical crossroads moving from “large scale with weak competitiveness” to “high-end industry leadership”. Domestic adipic acid capacity structure remained stable in 2025 with no new capacity commissioned, keeping total capacity at 3.836 million tons. Industrial output and sales maintained steady growth: annual production hit 2.57 million tons, up 3.3% year-on-year, while downstream consumption reached 2.038 million tons, a 6.42% year-on-year increase. Demand growth outpaced output expansion significantly, driving continuous optimization of the industry’s supply-demand balance.
China’s adipic acid sector is now mature with fierce market competition, marked by accelerating consolidation, capacity concentration and integrated industrial chain upgrading. Short-term headwinds include new capacity releases, weaker-than-expected downstream demand, stricter environmental policies and heightened market rivalry. Nevertheless, the long-term growth logic remains clear. Steady macroeconomic recovery and consistent rollout of industrial support policies will unlock new capacity across downstream core industries including nylon, TPU and PBAT, strongly lifting adipic acid demand.
Notably, sustained domestic breakthroughs in adiponitrile technology have fully broken overseas technological monopolies, laying the groundwork for localized, high-end development of the nylon 66 industry and poised to trigger a new round of growth across the nylon value chain. Concurrently, advancing plastic restriction policies in China have fueled capacity expansion of PBAT biodegradable materials. These two core downstream segments will serve as the primary drivers of future adipic acid consumption growth, propelling high-quality industrial upgrading and unlocking lasting development dividends for leading manufacturers such as Huafon Chemical.
Conclusion
Overall, Huafon Chemical’s upward performance forecast does not stem from temporary market volatility, but rather the synergistic effect of the company’s scale, management and technological strengths combined with structural growth dividends across its core industrial tracks. Against a backdrop of rising concentration and emerging demand across its three core product markets, bolstered by leading production capacity, integrated industrial chains and sustained R&D investment, the company is well-positioned to fully capture industrial upgrading dividends and deliver steady improvements in profitability.