China XLX Fertilizer (01866) Third Board Meeting of 2024 Successfully Held

On August 23, 2024, the Third Board of Directors of China XLX Fertilizer Company Limited 2024 was successfully held in Singapore. Liu Xingxu, Chairman of the Board of Directors of China Heartland Fertilizer, Zhang Qingjin and Yan Yunhua, Executive Directors; Wang Jianyuan, Wang Weiren, Li Shengshu and Li Hongxing, Independent Directors, Song Wanlei, Chief Executive Officer, Wang Yonghong, Chief Financial Officer and other related personnel attended the meeting.

The Board of Directors considered and approved the “Announcement of Interim Results for 2024”, “Report on Internal Audit Work in the First Half of 2024”, “Completion of Budget in the First Half of 2024 and Forecast for the Second Half of the Year” and other related matters. The attending directors discussed each motion in depth and made suggestions for the future development of the Company in light of the actual situation.

In the first half of 2024, despite the concentrated release of agricultural demand, the contradiction between supply and demand in the fertilizer industry still existed, and the prices of raw materials on the supply side oscillated downward, which weakened the price support for coal chemical related products, and the prices of the Group's products in the fertilizer segment and fine chemical segment declined. However, with the sound operation of the domestic economy, downstream demand continued to recover, leading to a significant increase in the sales volume of the Group's urea, compound fertilizers and methanol.

As at June 30, 2024, the Group achieved operating revenue of approximately RMB12,061 million, representing a year-on-year increase of 0.02%. The Group continued to optimize its production process and strictly control energy consumption indicators, and its production has been running smoothly for a long period of time. By improving quality, reducing costs and increasing efficiency, the Group has been awarded the honor of leading synthetic ammonia energy efficiency for thirteen consecutive years, and along with the decline in raw material costs, it has led to an increase of 12% in the overall gross profit year-on-year, which has boosted the growth of the Group's profits. in the first half of 2024, the Group's pre-tax profit amounted to approximately RMB1,123 million, representing a 21% increase year-on-year.

Looking ahead to the second half of the year, the domestic economy is picking up and improving, the fertilizer industry is balanced between supply and demand, coal prices are stabilizing and continuing, nitrogen fertilizer will still maintain a benign and stable development, and compound fertilizer is expected to be better than the first half of the year. Against the backdrop of accelerating new quality productivity in agriculture, the Group grasped the new trend in agriculture, seized the new opportunities in agricultural services, utilized big data, kept a close eye on big farmers, changed the organizational structure of the sales side of the Group, transformed the dealers into service providers, and took “differentiated products + precise services” as the entry point, and the team collaborated in order to provide integrated value-added services for the end-users of the farms, and to further enhance the influence of the brand.