Hebang Biotech’s 2021 net profit increased 73 times, to carve out a subsidiary for listing

Hebang Biotech recently announced an annual revenue of some RMB9.867 billion in 2021, an increase of 87.56% year-on-year, as well as a net profit of RMB3.023 billion, a nearly 73-fold rise year-on-year. In addition, Hebang Biotech announced its intended carveout of its subsidiary, Sichuan Wujun Solar Energy Co., Ltd., for listing on the Main Board of Shanghai Stock Exchange. Hebang Biotech said the carveout will enable the company to focus on its major business operations, while also benefitting the dedicated business development of Wujun Solar Energy towards green energy.

The prosperity of glyphosate and PMIDA 

The improvement of Hebang Biotech’s performance is attributive to the increased production and sales of its main products. According to Hebang Biotech, as the world’s largest supplier of PMIDA, the company’s production and sales both increased drastically in 2021. As the leading IDA process-based glyphosate manufacturer, its production and sales also surged.

As the world’s single most popular pesticide, glyphosate has benefited from the boomed agricultural production. In 2021, glyphosate boomed remarkably. Currently, global glyphosate production capacity is 1.143 million tons, of which China alone produces 773,000 tons while the rest of the world produces 370,000 tons.

Since 2021, there has been a growing global market demand for bulk agricultural products, so the prices of agricultural products have increased. Glyphosate has the largest herbicide variety on the global market, and demand has been growing strongly while its price has risen concurrently. As of December 2021, the market price of glyphosate exceeded RMB80,000 per ton.

In addition, in 2021, Hebang Biotech invested in photovoltaic silicon wafers and photovoltaic modules, having entered into the photovoltaic industry, which is expected to become the company’s new area of future development.

On the evening of 14th March, Hebang Biotech announced a planned carveout of its subsidiary, Wujun Solar Energy, for listing on the Main Board of Shanghai Stock Exchange.

As of the date of the announcement of the planned carveout, Hebang Biotech directly held 88.38% of stakes in Wujun Solar Energy and is the controlling shareholder. After the completion of the carveout, Hebang Biotech will still hold a controlling share in Wujun Solar Energy.

According to its annual report, Hebang Biotech has made industry deployment a priority for its three core businesses, which are its chemical, agricultural and photovoltaic operations. The company’s main products include sodium carbonate, ammonium chloride, PMIDA, glyphosate, methionine, high-quality glass sheet and photovoltaic materials, or products which are currently under development.

Wujun Solar Energy, a subsidiary to be carved out by Hebang Biotech, produces glass and photovoltaic products. The organizational structure and business operation of the subsidiary is independent from Hebang Biotech’s chemical and agricultural business unit.

Hebang Biotech said through the carveout, it can be focused on its primary business and concentrate on development of its conventional chemical and agricultural operations towards excellence, while at the same time, the carveout will benefit the focused business development in the field of greenenergy of its subsidiary, Wujun Solar Energy.