Loss assets have pressed the pause button; China Salt Chemical's subsidiary temporarily shut down due to the expiration of the "Safety Production License."

Every Day Reporter | Wen Duo Every Day Editor | Dong Xing Sheng

After market close on March 31, China Salt Chemical (SH600328, stock price 8.67 yuan, market value 12.71B yuan) announced that its wholly owned subsidiary China Salt Kunshan Co., Ltd. (hereinafter referred to as China Salt Kunshan) has temporarily halted production starting March 27, 2026, due to the expiration of its “Safety Production License.”

The announcement disclosed that, according to the annual plan, China Salt Kunshan’s production facilities scheduled annual shutdown and maintenance starting March 22. On March 27, due to the expiration of its “Safety Production License,” China Salt Kunshan received a “On-site Handling Measures Decision Letter” from the Kunshan City Emergency Management Bureau, informing it to “temporarily halt production” from March 27.

China Salt Chemical stated that as of the date of the announcement, the company’s listed operations and other subsidiaries are operating normally, and this shutdown will not affect the company’s main business.

China Salt Kunshan is a wholly owned subsidiary of China Salt Chemical, with a registered capital of 550 million yuan. Its main products are soda ash and ammonium chloride, and it is currently operating at a loss.

The announcement shows that by the end of 2024, China Salt Kunshan’s total assets amounted to 2.48B yuan, accounting for 13.22% of the company’s total assets. Its operating revenue in 2024 was 2.17B yuan, representing 16.87% of the company’s total revenue, with a total profit of -83.5209 million yuan during the same period.

According to China Salt Chemical’s 2023 annual report, China Salt Kunshan’s main business profit for that year still reached 622 million yuan.

More critically, by the end of September 2025, China Salt Kunshan’s total assets were 2.34B yuan, accounting for 9.25% of the company’s total assets. In the first three quarters of last year, China Salt Kunshan’s operating revenue was 1.21B yuan, representing 13.80% of the company’s total revenue, but its total profit loss widened to 193 million yuan.

China Salt Chemical stated in the announcement that the specific impact of this shutdown on the company’s operating data will be subject to subsequent audited financial reports. The listed company will urge China Salt Kunshan to actively communicate and coordinate with the licensing authorities, accelerate the completion of rectification requirements and evidence collection, and strictly implement safety production responsibilities to ensure the continuous and compliant operation of China Salt Kunshan.

According to the company’s 2024 performance forecast, affected by market supply and demand factors, the prices of main products like soda ash have decreased compared to last year, leading to a significant decline in net profit.

This trend continued into 2025. China Salt Chemical’s 2025 semi-annual report shows that the company’s operating revenue decreased by 5.76% year-on-year, mainly due to intensified market competition and sharp price drops in main products such as soda ash, polyvinyl chloride, and resin. However, due to insufficient capacity release in the same period last year, sales volume increased by 38.82%, resulting in a price decline but volume increase situation. During the reporting period, affected by fluctuations in downstream industry demand, the company’s main products faced temporary price pressures, and the sales price of soda ash continued to decline.

From China Salt Chemical’s 2025 semi-annual report, it can be seen that the decline in soda ash prices year-on-year led to a decrease in the main business profits of subsidiaries such as China Salt Kunshan, Qinghai Fatuo Alkali Industry Co., Ltd., and China Salt Qinghai Kunlun Alkali Industry Co., Ltd.

These subsidiaries are also important subsidiaries in the company’s soda ash business. However, in the first half of 2025, Qinghai Fatuo Alkali Industry Co., Ltd. and China Salt Qinghai Kunlun Alkali Industry Co., Ltd. both reported higher operating incomes than China Salt Kunshan, and their net profits did not experience losses like China Salt Kunshan.

In response to the pressure from traditional soda ash business, China Salt Chemical is actively taking measures. Its most important strategic move is to acquire the mining rights for natural alkali in Naiman Banner, Tongliao City, Inner Mongolia, through its equity participation in China Salt (Inner Mongolia) Alkali Industry Co., Ltd. The natural alkali mining rights cover an area of 28.85 square kilometers, with an initial registration period of 30 years.

In its 2025 annual performance forecast, China Salt Chemical explained that to cope with market changes, the company is optimizing process control, exploring cost reduction from multiple angles, and focusing on expanding profit margins to reduce the impact of product price fluctuations on its operating performance.

Cover image source: Every Day Media Asset Library