The drama of the reversal of fate has always touched people's hearts.
What people like is the hearty "Yesterday you ignored my love, today I let you climb high". The chemical giant Wanhua Chemical has this kind of cool rhythm.
In the autumn recruitment of 2023, Wanhua preached in major chemical colleges and universities, offering an annual salary of 450,000 yuan for fresh doctoral students, and providing interest-free loans for house purchases for recruits. In this regard, many chemical workers are envious.
Wanhua Chemical has a great background. It is known as "Chemical Mao", and is also known as the "Huawei" of the chemical industry. In the "Top 100 National Innovative Enterprises", Wanhua ranked third, after Huawei.
Like Huawei, Wanhua's international status should not be underestimated. It has not only ranked among the world's top 50 since 2022, but also maintained positive performance growth in 2023, when the chemical industry is in a counter-cyclical state. On the evening of February 2, 2024, Wanhua's performance express report showed that the revenue in 2023 would be 175.3 billion yuan, a year-on-year increase of 59%；net profit was 16.8 billion yuan, a year-on-year increase of 35%。
Data**: wind
So far, Wanhua's net profit has exceeded 10 billion yuan for seven consecutive years, and the average daily profit scale in 2023 will be about 46 million yuan. Compared with Wanhua Chemical more than 20 years ago, it can be described as a heaven and an underground. At that time, Wanhua was an angry and nameless little brother, suppressed by European and American companies. Just because, Wanhua has not been able to overcome the technical problems of MDI.
MDI is a plastic raw material that is particularly difficult to produce and has a wide range of uses. It is a key raw material for the preparation of polyurethane, which is used in many production and life scenarios such as car roofs, refrigerator insulation, and shoe sole slurry.
For a long time in the last century, there were only a few chemical giants in the world with independent intellectual property rights and production capacity of MDI. In the magnificent history, how did Wanhua solve the problem of stuck necks and achieve today's achievements? The hardships and hardships in this can only be experienced by those in the bureau.
For example, the fourth-generation head of Wanhua Chemical, "What is it like if you have experienced being stuck in the neck by others." With such an experience, the fire of independent innovation is the real fire. A true fire is a fire that cannot be blown out or poured out. Liao Zengtai, the current head, described it this way.
It all started more than 40 years ago.
In 1978, when the curtain of reform and opening up opened, China's industry was in full difficulty. It is a great difficulty to get the people of the whole country to wear leather shoes. In order to solve the problem of ordinary people wearing leather shoes, Yantai Synthetic Tannery, the predecessor of Wanhua, was born. 7,000 builders, gathered from all over the country.
Among them, there is Liu Yongzhen, who was transferred from the position of deputy director of Jinxi Chemical Plant by the Ministry of Light Industry to become the first generation head of Wanhua. Liu Yongzhen has been engaged in the chemical industry for many years, and has served as the chief engineer of an enterprise directly under the Ministry of Chemical Industry, with rich industry experience. Liu Yongzhen played a foundational role in the development history of Wanhua. Wang Zhaojiang, executive dean of Beishan Changcheng ** Investment Research Institute, commented on the first generation of Wanhua. Li Jiankui was also working in the Ministry of Light Industry at that time, and when he saw that he needed people, Li Jiankui came to Yantai from Beijing without saying a word.
There are talents, but what about the raw materials? In order to solve this problem, Wanhua has introduced a 3 million square meter synthetic leather production line from Japan, and is equipped with an MDI device with an annual output of 10,000 tons. This device was also sold to Wanhua after being eliminated by Japanese companies. The entire synthetic leather introduction project costs about 4600 million yuan, equivalent to 4/1000 of China's fiscal revenue that year.
But here's the problem: Wanhua has equipment, but no technology. Since MDI has been applied in industrial production, its production technology has been monopolized by European and American chemical giants. It was in such an embarrassing situation that in 1982, a college student named Ding Jiansheng was assigned to Wanhua Chemical. This young man is obsessed with technology and likes to spin apart core technology devices for research.
At that time, no one thought that Ding Jiansheng, a young man, would play a pivotal role in the history of Wanhua's development. A year after Ding Jiansheng came to Wanhua, when the synthetic leather factory was completed and put into operation, Liao Zengtai graduated from East China University of Science and Technology and joined Wanhua as a technician in the MDI workshop. Liao Zengtai is also the later head of Wanhua.
Wanhua was helpless when he was stuck in the neck, Liao Zengtai and Ding Jiansheng felt the same way: due to the failure to introduce technology due to the introduction of equipment, Wanhua could not really master the production know-how. When the foreign experts were there, everything went well, and as soon as they left, the equipment did not work. In the first three years, Wanhua could barely produce four or five thousand tons a year. By the fourth year, it happened at every turn**.
This year, although Ding Jiansheng has become the workshop director of the MDI branch, he is powerless like everyone else. "For 10 consecutive years, we have not reached production, we have to start and stop, and we have to deal with problems on the spot every once in a while, and it takes days and nights to deal with them, which is sometimes desperate. Mrs. Liao later recalled, "If you change the original accessories, it will take three months to go back and forth, so you have to find a way to get the accessories yourself." ”
This desperate situation in Liao Zengtai's memories made Wanhua decide to buy another "new car" and introduce high technology from abroad. However, it is infuriating that European and American countries still strictly block MDI technology from the third world. Wanhua spent four years negotiating with a number of foreign companies, but was eventually turned away. At this time, Wanhua realized that high-tech could not be bought.
The Chinese cannot make MDI on their own. A Western technology authority made such a judgment back then. The introduction team of 22 people was disbanded, and in the end, only 4 people remained, two of whom specialized in MDI, one was Liao Zengtai and the other was Ding Jiansheng. Ding Jiansheng, the chief engineer of the MDI workshop, is not convinced by the assertions of Westerners.
In 1993, Ding Jiansheng made up his mind to independently develop MDI technology. Together with a team of 10 people, including Liao Zengtai, he worked hard to find out how the Japanese equipment worked. Between pipelines, valves, temperature sensors, and feeding ratios, Ding Jiansheng struggled to explore. For half a year, they repeatedly disassembled and assembled parts, disassembled, and assembled. In this way, Ding Jiansheng knows hundreds of thousands of parts well.
In 1995, when Ding Jiansheng slowly mastered some of the technical know-how of MDI, the prelude to Wanhua's reform opened, Liu Yongzhen laid the foundation for Wanhua and handed it over to Li Jiankui, the second-generation head. "Li Jiankui played an important role in Wanhua's early strategic layout. Wang Zhaojiang thinks.
A year after Li Jiankui took office, Wanhua developed MDI manufacturing technology, and the factory production capacity reached 150,000 tons. So far, China has broken through the 60-year technological blockade of European and American countries, and has become the fifth country in the world with independent intellectual property rights of MDI manufacturing technology after the United States, Germany, Britain and Japan. During Li Jiankui's tenure, in addition to making breakthroughs in innovative technology, Wanhua also launched the "smashing iron rice bowl" action.
The reason for this is that from 1996 to 1998, Wanhua lost money for three consecutive years, and only 60% of the salaries of government personnel and 70% of the salaries of front-line employees were paid, and a large number of talents were lost. At that time, the monthly income of the workers was about 300 yuan, and Liao Zengtai was the deputy factory director, with a monthly salary of about 600 yuan.
Reform has always been forced to Liangshan, and it was born after death. Wanhua's new reform direction is to force the transformation of concepts and mechanisms through the transformation of the shareholding system. Luan Xinguang, then Wanhua's personnel director, said that without these changes, it would be difficult to achieve docking with national reforms in the later period.
In December 1998, Wanhua was mainly based on the MDI branch under the group, and jointly established Yantai Wanhua Polyurethane Co., Ltd. In this major reform, Ding Jiansheng first served as the general manager of Wanhua, and then served as the chairman, becoming the third head of Wanhua. "Ding Jiansheng is the soul of Wanhua Chemical's rapid development. Wang Zhaojiang commented.
After he took office, he continued the reform and innovation of the former chairman Li Jiankui. For example, to introduce talents, Ding Jiansheng recruited Dr. Yang Yong, and offered an annual salary of 80,000 yuan, with a 150-square-meter sea view room, which was more than one and a half stars higher than his annual salary of 20,000 yuan.
Hardship and hardship, Yuru is successful. Fast forward to 2000, the year when the dot-com bubble burst in the United States. In just half a year, the Chinese market has poured up to 100,000 tons of MDI. Under the impact of low foreign products and high quality, Wanhua, which has lost its competitiveness, has once again fallen into a crisis. At the critical moment, Ding Jiansheng stabilized the overall situation while transforming the original equipment and expanding production capacity. For example, a new MDI production line with an annual production capacity of 160,000 was built in Ningbo.
After the output was increased, the cost was diluted, and Wanhua also had the confidence to fight the first war. In 2001, Wanhua stepped into the door of the capital market.
The move of landing in China's capital market is a historic turning point for Wanhua. This not only brought 400 million yuan of funds to Wanhua, but also brought about changes in the system and mechanism, which boosted the rapid development of Wanhua. Many years later, Liao Zengtai sighed to **.
After the listing of Wanhua Chemical, the new generation of scientific research team led by Hua Weiqi (currently the executive vice president of Wanhua Chemical and the president of the ** Research Institute) continued to research, established chemical models for each key part, and carried out detailed chemical simulation calculations. Hua Weiqi holds a Ph.D. in chemical engineering from Zhejiang University, studied abroad, and was favored by many central enterprises and multinational companies when he graduated. Ding Jiansheng looked at the thatched cottage three times, and Hua Weiqi entered Wanhua in 2001.
Wanhua has equipped Hua Weiqi with an excellent scientific research team, an uncapped scientific research funding, and a working platform that can study MDI technology. After Hua Weiqi fell out of love, Wanhua even helped him find a partner and solve the subject's work problem. Under the all-round escort, the scientific research team led by Hua Weiqi did not disappoint Wanhua.
With their continuous innovation efforts, Wanhua's MDI technology and production capacity have been continuously upgraded and breakthroughs. By 2004, Wanhua was the largest MDI producer in the Asia-Pacific region. Four years later, Wanhua spent 12600 million euros, successfully acquired the fifth largest MDI supplier in Europe, Hungary Bosu Chemical. Through this acquisition, Wanhua successfully opened up overseas markets, consolidated its 300,000-ton production capacity, and quickly became one of the top three chemical companies in the world in terms of MDI production capacity.
Wanhua's second leap was from 2010 to 2015. During this period, when the demand for MDI surged again, Wanhua stepped into the rhythm of the industry and quickly occupied the market with a relatively low cost: with a market share of 25%, it became a global leader.
After 2015, Wanhua slowed down, and invested all capital expenditure in upstream and downstream chemical projects such as petrochemical, large ethylene and new materials, successfully avoiding the MDI overcapacity period in 2015. This year, Ding Jiansheng no longer served as chairman due to physical reasons. After the election, Liao Zengtai, the earliest core backbone of Wanhua and a master of many key node technologies, became the head of Wanhua's new generation.
Under the leadership of Liao Zengtai, Wanhua's third leap began. It was in the second quarter of this year that Freshwater Spring appeared for the first time in the top ten outstanding shares of Wanhua. Since 2016, the international oil price has been the highest, the demand for MDI has exploded again, the polyurethane industry has begun to recover, and Wanhua, which has expanded production again in the middle cycle, has begun to take off in the capital market.
After more than a year, Wanhua's share price doubled and **, from about 11 yuan at the end of 2015 to 22 yuan per share in April 2017. During the third jump of Wanhua, Tamsui Spring "deeply operated" Wanhua Chemical during the second quarter of 2015 to the second quarter of 2017.
If calculated from June 30, 2015 to June 30, 2017, despite the fact that during the two years, the stock price of Wanhua Chemical has risen by 56%, despite the fact that it has experienced many large fluctuations such as bull to bear, circuit breaker, and double killing of stocks and bonds. This also means that Tamsui Spring's stake in Wanhua is a big profit.
But Freshwater Springs is not the most profitable, and it is some entrants who have made crazy money after Freshwater Springs withdrew. At that time, Wanhua was in a period of rapid growth from "China Wanhua" to "World Wanhua". Since the second half of 2017, with the price increase of MDI, Wanhua Chemical has begun to be sought after by the market, and its stock price has increased significantly to 54 in July 2018$95 per share.
At the beginning of this year, Wanhua put forward the goal of striving to become one of the top 10 global chemical companies by 2025. After a three-month plunge, Wanhua Chemical's share price began to stabilize in the second half of 2019. At this time, Wanhua has been firmly in the first position in the world for several years with its high MDI production capacity.
By the first quarter of 2021, Wanhua Chemical's share price reached a stage high, reaching a maximum of 14478 yuan per share, and the market value once reached 400 billion yuan. This made many shareholders who did not hold Wanhua feel that they had missed 100 million. In 2018, he had a heavy position in Wanhua, and Sun Huigang, who sold at a high point in early 2021, made a huge profit of five or six billion yuan.
In 2021, Wanhua entered the top 20 chemical companies in the world with sales revenue of more than 144.5 billion yuan. So far, Wanhua has not only made itself a cyclical growth enterprise, but also become a world-class A-share chemical giant.
Kou Guangwu, President of Wanhua Chemical
In order to prevent the leakage and spread of Wanhua technology, Wanhua implements employee incentive reform and allows key employees to hold shares, which is also an important institutional guarantee for the confidentiality of Wanhua technology. In addition, not deviating from the field of chemistry and always focusing on the main business is another major reason for Wanhua's success.
In addition to cultural advantages such as innovation, another major advantage of Wanhua is that it is a state-owned enterprise, has abundant resources, and enjoys China's unique domestic market, which is an important reason for it to become a leader in the industry. Wang Zhaojiang told the city boundary.
However, Wanhua can't escape the cycle curse. Since the beginning of 2022, under the condition of high raw materials and sluggish downstream demand, Wanhua Chemical's performance has begun to decline.
Shareholder Wang Feng has obtained good returns in the three years he has invested in Wanhua. He once ignored the cyclical nature of the chemical industry, and it was not until Wanhua's net profit declined year-on-year in 2022 that Wang Feng deeply understood this sentence: no one can escape the curse of the cycle. Even the chemical giant Wanhua is no exception.
Entering 2023, although the cost of raw materials of Wanhua Chemical has been reduced due to the downward adjustment of global oil and natural gas, Wanhua Chemical still has increased revenue but not profits due to the downstream demand of the chemical industry in the recovery stage: the attributable net profit in the first three quarters decreased by 6 percent year-on-year65% to 1270.3 billion yuan. In the case of poor performance, Wanhua's stock price began to **.
As of February 23, 2024**, Wanhua Chemical reported a close of 7762 yuan shares, compared to 144 in February 2021The historical high of 78 yuan per share has exceeded 40%, and the market value has evaporated more than 150 billion yuan.
(Wanhua Chemical stock price chart **Straight flush).
Generally speaking, the company's stock price is expected to be too high, the industry is in a downward trend, the business development of the enterprise has encountered a bottleneck, and the industry has suddenly encountered a black swan event. Wang Zhaojiang told the city, but the direction of Wanhua's stock price, in addition to the market liquidity of A-shares, and investor sentiment, mainly depends on the global demand trend of the main business.
Sun Hong, who works in a chemical company, thinks so. He told Shijie that under the spell of the cycle, Wanhua's biggest advantage has also become its biggest disadvantage. "The polyurethane plate is too heavy for Wanhua. And it is precisely Wanhua's system and scale that determine that it will not value smaller markets and products. ”
However, from the current point of view, in the counter-cyclical chemical industry, the polyurethane industry is indeed in a state of overcapacity.
The market analysis of the polyurethane industry shows that in 2021, China's polyurethane output will reach 15.32 million tons, an increase of 4.47 million tons compared with 2016. From the perspective of polyurethane production and sales, in recent years, the production and sales rate of polyurethane in China is less than 1, and it is declining year by year, only 84 in 20204%, indicating that China's polyurethane overcapacity has intensified and export dependence has increased. In 2022, China's polyurethane production has reached 16 million tons, accounting for about 45% of the world's total production.
This also led to the decline of some of Wanhua's products, which in turn affected the company's profit margin. On the other hand, in recent years, in the process of Wanhua's contrarian expansion, the capital expenditure is not small, "which will increase Wanhua's financial burden in the short term and put pressure on cash flow." The above-mentioned chemical company told the city. "Relying too much on a single business can drag down the company's overall performance. For this, Wanhua is actually aware of this.
After Wanhua sat first in the world of MDI, Wanhua entered the petrochemical industry (ethylene, vinyl chloride, ethylene oxide, etc.) and new materials (TPU, SAP, PC, PMMA) industry in a new track, with the intention of forming a complete production line.
In Wanhua's vision, the petrochemical industry chain is the bridge of Wanhua's entire industrial chain, which can support the production of polyurethane, new materials and fine chemicals, and provide it with a steady stream of cheap raw materials.
Over the years, Wanhua has not been idle: seven major business divisions, including the polyurethane division, are actively developing new products. For example, in 2023, Wanhua will lay out a number of key new chemical material projects such as polysulfone, isopropanolamine, nylon 12 elastomer, isophthalenediamine, special isobutylene, and POE, while stepping up its layout in the field of battery electrolyte and battery **.
But this long-term layout is difficult to achieve results in the short term. From the current point of view, in addition to ethylene, polyethylene, as well as some high-performance new materials and high-end special chemicals in the petrochemical industry, there is still a certain shortage, and the rest of the major petrochemical products in China, such as propylene oxide, MTBE, acrylic acid and esters, have shown the characteristics of overcapacity.
In such an environment, the performance of Wanhua's petrochemical sector is not satisfactory. In the first three quarters of 2023, the sales of the petrochemical sector were 51.8 billion yuan, down 8%. But fortunately, Wanhua's fine chemicals and new materials sector performed well in the first three quarters, with revenue of 17.5 billion yuan increasing by 15% year-on-year. As for the polyurethane segment, sales were 50 billion yuan, an increase of about 2%.
Compared with last year, although Wanhua's performance in 2023 is in a state of slight increase, it is not easy for this leading company to maintain positive growth for another year at a time when the chemical industry is in a cold winter: annual revenue of 175.3 billion yuan, a year-on-year increase of 59%；net profit was 16.8 billion yuan, a year-on-year increase of 35%。It's just that in the face of such a performance growth rate, Wanhua also realized that the goal of the world's top 10 companies set in 2025 is likely to be incomplete.
From public information, we can see that the timetable for achieving the goal of becoming the world's top 10 has been changed to 2026. In 2026, will Wanhua be able to achieve the goal of being one of the top 10 in the world? "Although the overall market of the chemical industry is relatively pessimistic, it is expected that the chemical market will improve from the end of 2024. Wanhua will enter the top 10 in the world in 2026, and there is still hope. Sun Hong, who had dealt with Wanhua, predicted to the city that Wanhua has the ability and strength.
Wanhua's stock price continues to be **, which does not mean that the company has lost growth. "Growth is a long-cycle concept, which should be viewed in conjunction with the entire industry life cycle and macroeconomic trends. Wang Zhaojiang said.
However, it has to be admitted that if Wanhua wants to enter the world's top 10, it first needs to win against six Chinese chemical companies. In 2023, among the seven Chinese chemical companies on the list of the world's top 50 chemical companies, three are in the top 10, namely Sinopec, Formosa Plastics and PetroChina; The other 4 companies ranked in the top 20, namely Hengli Petrochemical, which ranked 11th, Syngenta Group, ranked 15th, and Rongsheng Petrochemical, which ranked 16th. Wanhua Chemical ranked 18th.
There are still two years left until 2026, and it depends on how Wanhua sprints again.