Befar Group (06745) fell more than 10% in early trading. As of press time, the stock was down 6.23% at HK$2.485, with a turnover of HK$13.9988 million.

On the news front, Befar Group (06745) announced its third-quarter results, reporting revenue of 4.423 billion yuan, up 16.59% year-on-year. However, net profit attributable to shareholders came in at 14.82 million yuan, down 81.67% year-on-year, while non-GAAP net profit attributable to shareholders recorded a loss of 29.08 million yuan, a decline of 126.66% year-on-year, swinging from profit to loss.

The company stated that during the third quarter, the price increases of certain raw materials outpaced those of its products, putting pressure on gross margins.

According to Zhuochuang Information, the domestic propylene oxide market is expected to see prices rise first and then fall in the fourth quarter, with monthly average prices edging down slightly on a sequential basis. The propylene oxide market price in the Shandong region is projected to be around 11,450 yuan/ton, 11,200 yuan/ton, and 11,000 yuan/ton in October, November, and December respectively, still showing significant sequential improvement compared to the third quarter.

As the largest propylene oxide market supplier in the country, Befar Group (601678) is expected to still have considerable room for profit improvement in the fourth quarter.