Why did Sinostar's net profit surge 54% despite a 10.8% year-over-year revenue decline in Q1?

Sinostar's net profit surged 54% year over year to 69.5 million renminbi despite a 10.8% revenue decline to 1.1 billion renminbi because the September 2025 merger between Dongming Hengchang and Dongming Qianhai led to structural cost efficiencies and reduced propylene sales—down 93.8% year on year to 7.28 million renminbi—including inter-company transactions—which likely lowered associated production, logistics, and commercial expenses; the company did not report gross margin or operating expense figures, but the disproportionate profit growth relative to revenue contraction strongly indicates merger-driven optimization of the cost base and business scope.

What were the most dramatic volume and price changes across Sinostar's key products in Q1, and what do they reveal about post-merger operations?

The most dramatic change was in propylene: sales volume collapsed 91.9% year over year to 1,655 metric tons while average selling price (ASP) fell 6.3%, resulting in a 93.8% revenue plunge to 7.28 million renminbi—including inter-company transactions—indicating near-exit from external propylene trading post-merger; similarly, premium-grade polypropylene (PP) volume dropped 12.8% to 51,057 mt with ASP down 3.9%, reflecting scaled-back operations; by contrast, MTBE volume rose 8.5% to 104,436 mt even as its ASP fell 6.7%, suggesting a strategic pivot toward higher-volume, lower-margin fuel additive sales; hydrogen and isobutylene showed muted volume shifts (−2.1% and +5.4%, respectively) but uniformly lower ASPs (−6.3%, −6.7%, −10%), confirming broad pricing pressure and inter-company transaction adjustments following the merger.

Sinostar profit surges despite revenue decline amid merger impact

May 18, 2026

Sinostar PEC Holdings reported a 54% profit surge despite a 10.8% revenue drop caused by a merger slashing propylene and polypropylene sales. Chemical segments showed mixed results, with MTBE volumes rising while prices fell across most products.

chemweek

2026-05-18

Sinostar profit surges despite revenue decline amid merger impact

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