Jiutian Chemical Group has issued a profit warning for FY2023 ended Dec 31, 2023, saying it expects to announce a net loss for the full-year period.
In a Feb 15 bourse filing, its Board of Directors says this is mainly due to a decline in the average selling prices of its main products — dimethylformamide and methylamine — arising from an industry-wide softening of demand and significant production capacity added by a new competitor since 4Q2022.
The competitor is Jiangxi Xinlianxin Chemical Industry, a subsidiary of Henan XinLianXin Chemical Group Co. Ltd.
Jiutian has not announced when it will release its FY2023 results, but its Board says it will do so no later than Feb 29. The company announced its previous set of full-year results, for FY2022, on Feb 28, 2023.
Jiutian announced on Jan 13 its plans to spend RMB1.6 billion ($296.96 million) in a bid to broaden its product offerings and gain better control over its supply chain.
The Singapore-listed company, based in China's Henan Province, currently produces dimethylformamide and methylamine, sodium hydrosulfate and dimethylacetamide (DMAC).
See also: Jiutian Chemical plans RMB1.6 billion investment to diversify into synthetic ammonia
Jiutian plans to expand into producing and selling synthetic ammonia by tapping on the right to undertake such a project in Henan now held by Anyang Chemical Industry Group, deemed as its controlling shareholder.
In its business update for 3QFY2023 ended Sept 30, 2023, Jiutian reported a net loss of RMB68.6 million, from earnings of RM93.5 million recorded a year prior. Sales in the same period plunged by 85% y-o-y to RMB80.2 million.
Shares in Jiutian closed flat at 2.5 cents on Feb 15.
