Shares of China XLX Fertiliser Ltd (HKG: 01866) surged more than 4% in Tuesday morning trading, with the stock changing hands at HK$11.17 as of the time of writing, reflecting a 4% gain and turnover of approximately HK$64.17 million.
In the first half of this year, China XLX Fertiliser generated revenue of roughly RMB 15.74 billion, marking a 24% increase year-on-year. Net profit attributable to shareholders reached about RMB 921 million, up 54% from the same period last year, nearly reaching the company's full-year net profit level for 2025.
The strong earnings performance was primarily driven by higher sales volumes of urea and synthetic ammonia, alongside reduced production costs that led to a notable expansion in gross margins. Additionally, rising prices for self-produced chemical products such as methanol, DMF, and melamine contributed to improved profitability.
On the capacity expansion front, the new chemical materials and high-efficiency fertiliser project at the Xinxiang base commenced operations on September 4th. The large-scale project at the Zhundong base is expected to be completed and put into production in the fourth quarter of this year, while the major project at the Guangxi base is progressing steadily according to plan, with commercial production anticipated by the third quarter of 2027.
As new capacities gradually come online, the group's economies of scale are set to expand further, driving down unit production costs and continuously strengthening its cost competitiveness, thereby laying a solid foundation for the company's ongoing development.
It's worth highlighting that starting September 7th, China XLX Fertiliser was officially included in the Stock Connect program, unlocking access to southbound capital flows. Following the opening of this channel, the company has seen heightened market attention, with expectations of improved liquidity gradually materialising.
As more domestic and international institutional investors gain visibility, the anticipated enhancement in the company's market capitalisation and trading liquidity is poised to support its business expansion and long-term value creation.