Wanhua Full-Year Report 2022

During the reporting period, the sales volume of main products in polyurethane series, petrochemical series, fine chemicals and new materials series increased due to the increase in sales volume of polyether polyol and putting-in-service of PO/SM facilities and multiple sets of fine chemical facilities, with an corresponding increase in product revenue and cost. At the same time, affected by the rise in global prices of bulk raw materials and energy, the increase in product cost was greater than the increase in revenue, and the gross margin ratio declined year-on-year. The increase in revenue and cost at domestic and overseas was mainly due to the increase in sales volume of main products and the rise in prices of raw material and energy during the reporting period, which fully leveraged the advantages of global channels; the decrease in gross margin ratio was mainly due to the impact of significant increase in global prices of bulk raw materials and energy, and the fact that the Company’s product costs increased more than revenue growth.