Liuhua Co., Ltd. plans to invest 290 million yuan to build a 200,000-ton/year hydrogen peroxide project. The capacity will increase by 125%.

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Liuzhou Chemical Co., Ltd. (stock code: 600423, referred to as “Liuzhou Chemical”) announced on March 27 that the company plans to invest in the construction of a 200,000 tons/year full acidic fluidized bed hydrogen peroxide project, with a total investment of approximately 289.9 million yuan. After the project is completed, the company’s total hydrogen peroxide production capacity will increase from the current 160,000 tons/year to more than 360,000 tons/year, an increase of 125%, which is expected to significantly enhance the company’s market competitiveness and profitability.

The announcement shows that the seventh meeting of the seventh board of directors has approved the investment proposal, and the project still needs to be submitted to the company’s shareholders’ meeting for review. This investment does not constitute a related party transaction and does not involve a major asset restructuring.

Project Basic Information

The project will be constructed by Liuzhou Chemical’s Luzhai branch, located at No. 100, Jianzhong West Road, Luzhai County, Liuzhou City, Guangxi. The main construction content of the project is a full acidic fluidized bed production unit with an annual output of 200,000 tons of hydrogen peroxide (concentration of 27.5%) and supporting public works and auxiliary facilities, covering a total area of 42 acres and a total building area of 10,952 square meters. The project is planned to have 20 staff members, with a construction period of 24 months.

In terms of funding sources, the total investment of 28.99 million yuan will be entirely financed by the enterprise itself.

Dual Driving of Capacity and Technology Upgrade

Liuzhou Chemical stated that this investment is primarily based on two strategic considerations: on one hand, the company’s current product structure is single, only producing hydrogen peroxide series products, with the current capacity of 160,000 tons/year corresponding to an annual output value of approximately 150 million yuan, which is weak in terms of revenue scale and profitability, and has limited pricing power in the regional market. After the project is completed, the company’s total production capacity will exceed 360,000 tons/year, significantly enhancing its sustainable operational capacity and core competitiveness.

On the other hand, the project aligns with national industrial policy directions. In March 2024, the national emergency management department clearly required the elimination of the outdated “acid-base fixed bed” hydrogen peroxide production process by 2029, and new projects should prioritize the adoption of safer and more efficient “fluidized bed” processes. The “full acidic fluidized bed” technology adopted in this project not only complies with the latest national safety, environmental protection, and industrial upgrade policies but also significantly reduces production costs and increases product profit margins.

Risk Warning

The company also highlights two major risks: first, although the project has completed the preliminary filing, it still needs to undergo environmental assessments, energy assessments, and other pre-approval procedures, posing the risk of project changes, delays, suspensions, or terminations due to policy adjustments or approval factors; second, if market conditions change in the future, industry policy adjustments occur, or unforeseen events happen, there may be a risk that project revenues do not meet expectations.

The company stated that it will continue to monitor the project’s progress and strictly fulfill its information disclosure obligations in accordance with relevant laws and regulations.

Core project data overview:

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Editor: Xiao Lang Quick Report