Bohai Chemical's "Changing Birds in the Cage" Transformation into Fine Chemicals: Opportunities and Challenges Coexist

In December, the A-share company Bohai Chemical (600800.SH) disclosed a major asset restructuring plan that attracted market attention. The company intends to divest the continuously loss-making core asset Bohai Petrochemical from its controlling shareholder, while acquiring control of the fine chemical enterprise Tianjin New Materials (430372.NQ) on the New Third Board. This "Changing Birds in the Cage" operation is a transformation effort for a company that has accumulated losses of about 1.2 billion yuan over the past three years, representing a "desperate battle" for survival, and aligns with the current policy direction of upgrading the petrochemical industry to fine chemicals.

The core logic of this restructuring is to divest the "bleeding" business. Bohai Chemical acquired Bohai Petrochemical for 1.88 billion yuan in 2020, which contributed 98.5% of the company's revenue but became the main reason for losses—continuing to incur losses from 2023 to the first half of 2025, with the overall loss reaching 579 million yuan in the first three quarters of 2025. Selling Bohai Petrochemical to the controlling shareholder has become a key step for the company to stop the losses.

The key highlight of the transformation lies in the acquisition target Tianjin New Materials. As a national-level specialized and innovative "little giant" enterprise, Tianjin New Materials primarily focuses on fine chemical products such as trimellitic anhydride. Its performance has seen explosive growth in recent years, with revenue of 529 million yuan and a net profit attributable to the parent company of 305 million yuan in the first three quarters of 2025, representing year-on-year growth of 54% and 179%, respectively. However, its path in the capital market has been bumpy, with two IPO attempts failing due to gross margin controversies, and related disputes have not yet been completely resolved. There are also doubts in the market about whether its high profitability relies on short-term industry prosperity and the sustainability of its growth.

From an industry trend perspective, the opportunities for this transformation are promising. Currently, the average gross margin of the fine chemical industry is 25%-30%, significantly higher than the 5%-10% of the traditional petrochemical industry, and policies explicitly support petrochemical companies in extending towards high-end and fine chemicals. If the acquisition is successful, Bohai Chemical will completely say goodbye to the loss-making traditional petrochemical business and leverage Tianjin New Materials' technology and market position to share in industry dividends, which is expected to rapidly improve its financial situation and enhance valuation. However, Minsheng Securities points out that the thoroughness of asset divestment, the authenticity of the target's core competitiveness, and the difficulty of integration remain key factors determining the success or failure of the transformation. $BTC #BinanceABCs