Xinxiang Richful Lube Additive Co., Ltd. reported a sharp drop in first-quarter profit despite modest revenue growth, as rising costs and foreign exchange losses weighed on earnings, the company said, while major shareholder Sinopec Group Capital Co., Ltd. moved to cut its stake for a third time in a year.
The company’s margin pressure reflects broader conditions seen across 2025, when global manufacturing demand remained uneven and input costs stayed elevated in many chemical and materials segments. Industry data from organizations such as the International Monetary Fund and the World Bank pointed to slower industrial growth alongside persistent cost volatility, including energy, logistics and financing.
Currency movements also affected exporters, with shifts in the Chinese yuan contributing to exchange-related gains or losses depending on timing and exposure. Within this environment, many specialty chemical and lubricant suppliers reported tighter margins even where revenues held steady, as higher operating expenses and investment in research and development weighed on profitability.
Net profit attributable to shareholders fell 28.22% year on year to CNY 139.92 million (U.S.$20 million) for the three months ended March 31, 2026, even as revenue rose 3.24% to CNY 876.50 million, according to the company’s April 23 filing. Richful cited higher selling, research and development, and financial expenses as key drivers of the decline, including exchange losses linked to yuan appreciation and increased borrowing costs.
In a separate disclosure, Sinopec Capital said it plans to sell up to 2.9 million shares between May and August 2026, which would reduce its holding from 11.18% to about 10.20% if fully executed. The move follows two earlier reductions since mid-2025, when its stake stood at 13.37%, and is attributed to the investor’s funding arrangements. Richful said the transaction will not affect control of the company or its ongoing operations.