Sinostar PEC Holdings Limited reported a net profit of RMB69.5 million for the three months ended 31 Mar 2026, up 53.9% year-on-year, as wider product spreads in its gas-separation operations offset a drop in sales volumes following a business consolidation.
Earnings per share rose to 7.24 RMB cents from 4.70 RMB cents a year earlier. The board did not declare an interim dividend, maintaining its stance of preserving cash amid volatile feedstock prices.
Group revenue slipped 10.8% YoY to RMB1.17 billion. The gas-separation division remained the main contributor, delivering RMB1.08 billion in external sales and a pre-tax profit of RMB102.9 million, buoyed by higher gross margins after supply disruptions in the Middle East tightened regional product markets. The transport and logistics unit generated RMB83.2 million in revenue but posted a RMB1.2 million pre-tax loss. Overall gross profit climbed 49.3% to RMB106.9 million, lifting the group gross margin to 10.2% from 4.4% in the prior-year quarter.
Sales of methyl tert-butyl ether (MTBE) rose 1.3% to RMB500.9 million as volumes increased 8.6%, mitigating price softness. Premium-grade polypropylene revenue declined 16.3% to RMB332.6 million on lower tonnage and prices, while processed LPG and propylene sales fell sharply following the September 2025 merger of subsidiaries Dongming Hengchang and Dongming Qianhai. Finance costs nearly halved to RMB1.8 million after loan repayments, supporting the bottom-line expansion.
Cash generated from operations remained robust at RMB135.5 million. However, a RMB134.7 million rise in restricted cash tied to banking facilities contributed to a net cash outflow of RMB0.9 million, leaving end-period cash and cash equivalents at RMB2.0 million. Total cash at banks, including restricted balances, stood at RMB559.4 million.
Looking ahead, Sinostar expects elevated prices for polypropylene and MTBE to persist through the first half, underpinned by supply constraints linked to geopolitical tensions in the Middle East. Management cautions that additional industry capacity and potential easing of geopolitical premiums could pressure margins in the second half. The group will continue expanding its international sales network—recently securing inaugural exports of premium grade polypropylene to Southeast Asia and the Middle East—and will focus on completing a new polypropylene facility financed by bank borrowings guaranteed by a related party.
No executive comments were provided in the results announcement.