A-shares companies implement multiple measures to secure orders, stabilize operations, and control risks

◎ Reporter Chai Liubin

Recently, the geopolitical conflict in the Middle East has had some impact on China’s capital markets. What conditions production and operations of related industry-listed companies are in, and whether their overseas business plans have been affected, are drawing investors’ attention.

The Shanghai Securities News has noted that many institutional investors have already gone to listed companies to learn about the latest situation. Multiple industry-listed companies have actively responded to investors’ concerns—either safeguarding orders and maintaining steady operations, or adjusting strategies and managing risks. Some companies, whose operations are more heavily affected by cost fluctuations, stated that they are actively responding through market-based approaches, continuously optimizing their business layout, and flexibly responding to changes in market demand.

Secure orders, stabilize operations, and prevent risks

Faced with uncertainty brought by the Middle East geopolitical conflict, most A-share companies say overall operations have remained stable. Among them, companies across various industries are taking measures from multiple dimensions—supply chain, logistics, customer management, and more—using diversified initiatives to control risks and ensure operational stability.

“Steel products in transit that the company has shipped to the Middle East and the goods already signed for by users have both not been directly affected, and business delivery remains stable.” CITIC Special Steel said in an institutional research visit recently. Looking ahead, it said two aspects need to be重点 focused on: first, if local oilfield facilities suffer damage, it may generate new maintenance and repair demand, thereby increasing the share of demand for oil-and-gas casing pipes; second, many enterprises also have oil-and-gas field layouts in regions outside the Middle East, and they are currently gradually launching alternative investment and supply plans to avoid regional situation risks.

Donghua Energy, as a leading global LPG (liquefied petroleum gas) company, has a complete “ship–trade–storage” supply chain system. The company said that when facing risks related to raw material supply assurance and price fluctuations caused by the geopolitical conflict, it can quickly adopt effective measures to ensure that its propane supply is stable and sufficient, and that production and operations will not be affected.

Sinoma Technology, meanwhile, broke down the potential impact of the Middle East situation by business segment: for glass fiber products, at present domestic electricity prices and natural gas prices are relatively stable; for wind power products, the upstream and downstream of the wind power industry have mature operating mechanisms to respond to changes in prices of bulk materials, and the company has fully communicated with its partners regarding information on cost and price changes—going forward, it will determine price-change arrangements through closer communication; for lithium film products, rising oil prices will have some impact on costs.

On the overseas business front, several listed companies with production and sales bases in the Middle East also dynamically adjust their operating strategies based on local developments.

Shan Tui Co., Ltd. has two subsidiaries in the Middle East: a Dubai company and a Saudi Arabia company. The Middle East geopolitical conflict affected business development at the Dubai subsidiary, but the Saudi company—whose business volume is larger—was not affected. To further safeguard business safety, the company strengthened customer credit management and export credit insurance coverage, while also developing new logistics channels to ensure product transportation safety.

The overseas subsidiaries of Glowtech Technology have received multiple layers of operational assurance. Its ADT plant in Israel is a government-approved whitelist enterprise; in a state of emergency, it has been allowed to resume normal operations and receive safety protection. Currently, the plant, equipment, and personnel are all safe, and operations are stable. At the same time, the company’s UK plant and Zhengzhou plant provide production coordination and procurement support for the ADT plant, ensuring customer order delivery and minimizing the impact of external conditions.

Boying Special Welding is steadily advancing overseas-region business according to plan, including oil-and-gas composite pipe stack welding business in the Middle East. The company said that although the current situation in the Middle East has some uncertainty, the company’s preparations for capacity landing in the Middle East will continue to be advanced. However, the investment progress has been delayed compared with the prior plan, and there is also uncertainty about when the final landing will occur.

Control costs, adjust prices, optimize production scheduling

Affected by energy and raw material price fluctuations triggered by the Middle East geopolitical conflict, some chemical and pharmaceutical listed companies face upward pressure on costs. These companies are actively responding through market-based measures such as price adjustments, optimizing production and sales strategies, and adjusting procurement layouts, in line with market changes, to ensure stable operations.

Plover Pharmaceutical said plainly that recently, the average overall increase in raw material prices for the company’s API and CDMO (innovative drug R&D and production services) products is about 12%. The proportion of the raw-material price increase in costs is about 6 to 8 percentage points. There are differences in the price-increase range among different products. Among special raw materials: due to tight supply of sulfur shipments, sulfuric acid prices have doubled, and the increase in bromine prices is significant. For oil-related base solvents such as methanol and ethylene glycol, the price increases are in the range of 10% to 15%.

“Typically, our product prices follow the market. In China, most enterprises reach monthly negotiated price adjustments, and the changes are generally small, so they usually do not adjust unless the increase in raw material prices reaches a certain level, at which point price adjustments are required. Overseas companies will set the price of each individual order and have raw materials prepared in advance. In CDMO business, once an order is placed, the raw materials are locked in. Currently, most customers understand the price adjustments well, and the adjustment cadence matches the previous cadence.” Plover Pharmaceutical said.

Rifeng Advanced Materials’ main raw materials are petrochemical products. Affected by the Middle East geopolitical conflict, raw material prices have risen. The company has appropriately raised product selling prices, and going forward it will dynamically adjust based on changes in the geopolitical situation, raw material prices, market demand, and other factors. In addition, the company currently has a relatively large finished goods inventory. The product price increases resulting from the raw material price increases will have a comparatively positive impact on the company in the short term.

Sharp fluctuations in crude oil prices have driven a simultaneous large rise in the prices of Ziqiang Tengda’s main products. The company optimizes production scheduling and the pace of sales: it prioritizes ensuring production and delivery of higher-priced products, while also strengthening dynamic inventory management, flexibly adjusting raw material procurement strategies, and effectively hedging price fluctuation risks by relying on diversified raw material procurement channels and raw material price-locking methods.

In addition, the Middle East geopolitical conflict has led to local MTBE (methyl tert-butyl ether) exports being obstructed, causing a structural tightening in global supply. Meanwhile, MTBE, as a key rigid component for gasoline blending, continues to see steady demand release, and its export demand is expected to increase significantly. Ziqiang Tengda said it will seize this window of global supply-and-demand rebalancing, further optimize its export structure and customer layout, and push both export volume and profit margins to achieve double improvement.

Chuan Jin Nuo relies mainly on externally sourced raw materials, including phosphate rock, sulfur, and sulfuric acid. The company said that raw-material costs are influenced comprehensively by multiple factors, and energy prices are not the only determining factor. To hedge risks from price fluctuations, the company continues to promote a global resource layout and a diversified supply system. It stabilizes costs through methods such as medium- and long-term agreements and procurement schedule management.

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责任编辑：江钰涵