Dongyue Silicone Materials mid-year net profit forecast to surge over ninefold, shares hit 20 percent daily limit up, silicone sector erupts

Earnings

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Summary · why it matters

Dongyue Silicone Materials disclosed its semi-annual earnings forecast, projecting net profit attributable to the parent company for the first half of 2026 at between 424 million and 444 million yuan, a year-on-year increase of 904.88 percent to 952.28 percent. Deducted non-recurring net profit is expected to be between 465 million and 485 million yuan, up 933.72 percent to 978.18 percent. Boosted by the news, Dongyue Silicone Materials briefly hit the 20 percent daily limit up during the session, surging 19.18 percent. Xinyaqiang also hit its daily limit up, while Xin'an Chemical, Runhe Materials, Guibao Science and Technology, and Luxi Chemical collectively followed the rally. The company attributed the earnings explosion mainly to rising prices for key products in the silicone industry, alongside a year-on-year decline in the purchase price of the main raw material industrial silicon, which lowered unit production costs and improved gross margins. At the industry level, the average price of silicone has climbed from a low of 10,939 yuan per tonne in October 2025 to around 15,300 yuan per tonne. In early June, major domestic silicone companies held an industry meeting and reached an agreement on coordinated emission reductions and price stabilization, deciding on a unified 40 percent phased coordinated emission reduction across the industry from June to August. The industry operating rate will be lowered from about 70 percent to around 60 percent, with a unified DMC price of 14,800 yuan per tonne. Ping An Securities is bullish on the silicone industry as fundamentals gradually improve, while Great Wall Securities believes that constrained capacity expansion coupled with downstream demand growth may lead the industry into a virtuous cycle.

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