Dow's Q3 2025 Earnings Report (October 27, 2025)

The stock price has languished for a full year, dropping two tiers; following the Q3 2025 earnings report, it surged 13%—has there been a fundamental change? ・ First, revenue was weak: the Q2 guidance for this quarter stood at $10.2 billion. ・ Second, GAAP EPS turned positive only due to two non-recurring items; operating profit failed to cover interest expenses. ・ On the positive side, the loss was narrower than expected—the company’s cost-cutting and capital expenditure reductions have proven effective. Has the chemical industry reached a downward inflection point? ・ On the supply side, Dow believes capacity restraint has begun across all regions—including China: “We've got speculation on the closures of about 13 million metric tons from a combination of additional capacity in Asia, Japan and Korea to the tune of about 5 million tons and China from the [anti-evolution] policies to the tune of about 7 million tons.” ・ On the demand side, Dow views overall demand as still weak—with no improvement versus last quarter. It hopes rate cuts will stimulate construction starts.

Earning RMB 10 billion in six months, yet the stock price plunging by half from its peak

The most defining feature of China’s A-share market this year has been extreme style divergence. Yet history repeatedly shows that every episode of extreme concentration of investor attention inevitably unravels—and those undervalued assets unjustly punished and driven down to deeply discounted levels often incubate the next round of recovery potential. A leading enterprise in advanced chemical materials Today we examine Wanhua Chemical—a classic example of a growth-oriented cyclical stock. Though operating in a highly cyclical industry, the company has delivered over 40-fold cumulative returns since its listing. First, consider its current share price: It now trades approximately 7% below the level seen on September 24, and is down roughly 9% year-to-date. From its historical high of RMB 140 in February 2021, the share price has fallen by about half. Its current P/E ratio sits at the ~33rd percentile of its historical range—also relatively low. From MDI leader to global leader To truly understand Wanhua Chemical, one must grasp both its business strategy and the broader chemical industry cycle. In 1998, Wanhua launched operations focused exclusively on MDI production. At the time, China relied almost entirely on imports for MDI; Wanhua started from scratch and successfully broke through technological blockades. After its IPO in 2001, it initiated its first wave of capacity expansion. In 2011, Wanhua acquired Hungary’s BorsodChem, securing a European production base and officially launching its globalization strategy. Over the next decade, its MDI capacity expanded from tens of thousands of tons to over 2 million tons—making it the world’s largest MDI producer, with a global market share of 25.5%, surpassing both BASF and Covestro. Wanhua’s second takeoff came from integrating petrochemicals vertically. An integrated platform for advanced chemical materials In 2021, Wanhua’s 1-million-ton ethylene plant commenced operations—not merely expanding capacity, but marking its transformation from a “single-isocyanate producer” into an “integrated platform for advanced chemical materials.” Ethylene is the most fundamental building block in the petrochemical chain; with ethylene, Wanhua can produce downstream products including polyolefins, ethylene oxide, acrylic acid, styrene, LDPE, and POE. 2021 also coincided with a major external catalyst: pandemic-induced global chemical supply shortages drove prices of MDI and other products to record highs. That year, Wanhua’s revenue soared from RMB 70 billion to over RMB 145.5 billion, while net profit surged from RMB 10 billion to RMB 24.6 billion—the all-time peak (up 145.47% YoY)—and its share price peaked at RMB 140. But problems began emerging precisely then: revenue kept growing, yet profits did not keep pace. In 2022, as chemical prices retreated, net profit fell from RMB 24.7 billion to RMB 16 billion; by 2025, revenue exceeded RMB 200 billion, yet net profit further declined to RMB 12.5 billion. Ironically, the petrochemical business—which was meant to become a new growth driver—has instead become a “drag.” Petrochemicals involve bulk commodities—ethylene, polypropylene, propylene oxide—products facing severe domestic overcapacity and intense competition in recent years. In 2025, its gross margin plummeted to a mere 0.58%. Moreover, massive capital expenditures undertaken to secure a second growth engine have led to sharply rising depreciation expenses after numerous ongoing projects were completed and capitalized—directly and indirectly eroding hundreds of millions of RMB in profits. The hallmark of a growth-oriented cyclical stock is the company’s ability to sustain long-term growth amid industry cycles. Although earnings fluctuate cyclically, each trough is followed by a period of consolidation—after which profits rise to a new, higher plateau in the next upcycle. Wanhua Chemical is currently navigating its third downturn. The prior two downturns each lasted two years—but this one has already entered its fifth year.

Dow Inc. Stock Rises 0.20% in Pre-Market Trading

Oct 6, 2026

Dow Inc. shares traded at EUR 25.45 in pre-market sessions on October 6, 2026, marking a 0.20% increase from the previous close, according to Lang & Schwarz data.

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