Wansheng Co., Ltd. reported an annual loss of 960 million yuan with a gross profit margin of only 18.3%. The company has invested over 200 million yuan in overseas facilities nearing production, which may help reverse its performance.

Changjiang Business Daily report　●Changjiang Business Daily reporter　Huang Cong

After Wan Sheng Co., Ltd. (603010.SH)’s attributable net profit continued to decline for three consecutive years, the company has now run into a massive loss again.

On the evening of March 23, Wan Sheng Co., Ltd. released its annual report, showing that in 2025 the company generated operating revenue of RMB 3.38B, up 13.98%; its attributable net profit was a loss of RMB 960 million, turning from profit to loss.

Regarding the loss, Wan Sheng Co., Ltd. said it was mainly due to changes in the supply-demand pattern in the market for its main products, flame retardants, which led to a decline in gross profit per ton. In 2025, the company also made asset impairment provisions totaling RMB 1.1B.

It is worth noting that from 2022 to 2025, Wan Sheng Co., Ltd.’s gross margin was 22.12%, 18.98%, 18.48%, and 18.30%, respectively. Among them, the company’s 2025 gross margin hit a new low since its listing.

Against this backdrop, Wan Sheng Co., Ltd. will build a Thailand base, treating it as the key to reversing the company’s performance.

In December 2024, Wan Sheng Co., Ltd. announced that it planned to invest in Thailand to build a new production base, constructing an annual 32k-ton phosphates flame retardant project. The project’s total investment is expected to be about RMB 216 million.

In its 2025 annual report, Wan Sheng Co., Ltd. said that the progress of the Thailand production base construction was smooth. The core production equipment had entered the installation stage, and key-position talent had basically been in place. The company is aiming to achieve trial production in the first half of 2026 and gradually release capacity to meet demand from the U.S. and Europe markets, opening up a new core growth point for the company’s long-term performance growth.

Making asset impairment provisions of RMB 32k

Since its establishment, Wan Sheng Co., Ltd. has been focusing on the R&D, production, and sales of functional fine chemicals, and is one of the world’s most major producers and suppliers of phosphorus-based flame retardants.

Wan Sheng Co., Ltd. said that after more than 30 years of development, the company has continued to expand its business segments, and has formed a favorable development momentum with multiple segments advancing side by side, including polymer functional additives, organic amines, paint additives, raw materials and intermediates, among others. The company currently has six production bases: Linhai, Zhejiang; Taixing, Jiangsu; Jining, Shandong; Weifang, Shandong; Zhuhai, Guangdong; and Thailand (under preparation).

However, Wan Sheng Co., Ltd. suffered its first loss after listing.

On the evening of March 23, Wan Sheng Co., Ltd. released its annual report, showing that in 2025 the company generated operating revenue of RMB 1.1B, up 13.98%; its attributable net profit was a loss of RMB 960 million, turning from profit to loss.

Regarding the increase in operating revenue, Wan Sheng Co., Ltd. explained that it was mainly because the subsidiary Guangzhou Suengben, which was included in the consolidated financial statements starting from November 2024, is included for the full year in the current reporting period, whereas in the same period last year only the last two months were consolidated.

Regarding the loss, Wan Sheng Co., Ltd. said it was mainly due to changes in the supply-demand pattern in the market for its main products, flame retardants, which led to a decline in gross profit per ton.

Not only that, Wan Sheng Co., Ltd. also said that, according to the industry’s competitive landscape and development trends, the company adjusted the product structure and production capacity layout of some bases in a timely manner. At the same time, to avoid international trade barriers and promote a global strategy, the company would relocate part of the flame-retardant production capacity from the Weifang, Shandong base to the Thailand base. Due to comprehensive factors such as reduced production capacity resulting from the capacity adjustment, relocation, ramp-up, and a decline in product gross profit margins, the existing capacity’s operating performance cannot cover the investment scale of the entire base. After impairment testing confirmed that the relevant assets show impairment indicators, in accordance with the “Enterprise Accounting Standards” and the company’s accounting policies, the company recorded asset impairment provisions.

The announcement shows that in 2025, Wan Sheng Co., Ltd. made asset impairment provisions totaling RMB 3.38B, which accordingly reduced the company’s total consolidated profit before tax for 2025 by RMB 1.1B (the impact of income tax was not included in the total consolidated profit before tax).

Financial costs increase

In fact, before the loss, Wan Sheng Co., Ltd.’s attributable net profit had already declined for three consecutive years.

In 2021, Wan Sheng Co., Ltd. achieved operating revenue of RMB 1.1B, up 77.18%; attributable net profit was RMB 824 million, up 109.67%. Both reached historical highs.

From 2022 to 2024, Wan Sheng Co., Ltd.’s operating revenue was RMB 4.12B, RMB 3.56B, and RMB 2.85B, respectively, with year-over-year changes of -13.38%, -20.03%, and 3.97%. Attributable net profit was RMB 365 million, RMB 184 million, and RMB 103 million, respectively, with year-over-year changes of -55.70%, -49.69%, and -43.72%, with a sharp decline for three consecutive years.

In 2021, Wan Sheng Co., Ltd.’s gross margin was 32.70%. From 2022 to 2025, the company’s gross margins were 22.12%, 18.98%, 18.48%, and 18.30%, respectively. Among them, the company’s 2025 gross margin hit a new low since its listing.

In 2025, Wan Sheng Co., Ltd.’s selling, general and administrative expenses totaled RMB 435 million, up 24.46%. Among them, the company’s selling expenses, R&D expenses, and management expenses all increased to some extent. In particular, selling expenses increased by 48.08% year over year, and R&D expenses increased by 28.13% year over year. The growth of the above expenses further squeezed the company’s profit space.

At the same time, Wan Sheng Co., Ltd.’s finance costs changed from negative to positive. Specifically, finance costs moved from -RMB 7.3835 million in 2024 to RMB 18.4981 million in 2025, mainly due to an increase in interest expense combined with a decrease in interest income. This undoubtedly increased the company’s financing costs and had a negative impact on performance.

Not only that, as of the end of 2025, Wan Sheng Co., Ltd.’s total assets were RMB 2.96B, down 12.89% from the end of the previous year; attributable net assets were RMB 6.27B, down 27.76% from the end of the previous year. Both the company’s asset scale and net assets shrank to some extent.

Trial production in the first half of the Thailand base

Under the burden of massive losses, Wan Sheng Co., Ltd. will build a Thailand base, treating it as the key to reversing the company’s performance.

In December 2024, Wan Sheng Co., Ltd. announced that the company planned to invest in Thailand to build a new production base, constructing a 32k-ton-per-year phosphates flame retardant project. The project is expected to require a total investment of about RMB 216 million (equivalent to USD 30 million).

At that time, Wan Sheng Co., Ltd. specifically emphasized that it would implement the construction of the Thailand production base according to specific circumstances such as market demand and business progress.

In August 2025, an article on Wan Sheng Co., Ltd.’s official website stated that the groundbreaking ceremony for the company’s first Southeast Asia new materials manufacturing and technology base—Wan Sheng International’s 32k-ton-per-year phosphates flame retardant project—was held at the Asian Industrial Estate (AIE) in Rayong Province, Thailand.

At that time, Wan Sheng Co., Ltd.’s chairman, Gao Xian Guo, publicly said that the project is a milestone-level breakthrough in Wan Sheng’s global expansion. Relying on the mature and well-developed industrial ecosystem of the Rayong Industrial Park and convenient, efficient supporting facilities, the project will be promoted efficiently, Wan Sheng’s economic cooperation with Southeast Asia will be deepened, and the brand’s influence and market competitiveness will be effectively enhanced, helping the company speed onto the fast track of internationalized development.

In the article, Wan Sheng Co., Ltd. said the project is expected to be completed and put into operation in the first half of 2026. The project is positioned in sectors such as Southeast Asia’s new-energy vehicles, consumer electronics, and building materials, and will deeply serve Southeast Asia’s emerging markets.

In its 2025 annual report, Wan Sheng Co., Ltd. stated that as the core hub and strategic fulcrum of the company’s global capacity layout, the construction progress of the Thailand production base has been smooth. The main works of the 32k-ton-per-year phosphates flame retardant project have basically been completed, core production equipment has entered the installation stage, and talent for key positions has basically been put in place. The company is aiming to achieve trial production in the first half of 2026 and gradually release capacity to meet demand from the U.S. and Europe markets, opening up a new core growth point for the company’s long-term performance growth.

Editors in charge: ZB

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