VC Price Increase, Q1 Net Profit Expected to Surge Over 22 Times – Can Fushang Pharmaceutical Sustain Such Performance?

How can AI · Fuxiang Pharmaceutical turn around its consecutive losses in VC business?

Reporter: Zhu Chengxiang Editor: Chen Junjie

Net profit is expected to increase by over 22 times in the first quarter of 2026. How is Fuxiang Pharmaceutical (SZ300497, stock price 14.17 yuan, market value 7.633 billion yuan) able to achieve this? The answer lies in the rising trend of VC (Vinylene Carbonate) prices.

On March 23, Fuxiang Pharmaceutical disclosed its 2025 performance forecast and first-quarter 2026 results. In the first quarter of 2026, the company’s net profit is projected to be between 52 million and 75 million yuan, a year-on-year increase of 2222.67% to 3250.01%.

In response, Fuxiang Pharmaceutical stated that benefiting from the continued improvement in the new energy industry, steady growth in demand for power batteries, and rapid explosion in demand for energy storage batteries, upstream lithium battery materials demand has continued to rise. The company’s lithium battery electrolyte additive business is performing well, with core products like VC and FEC (Fluorinated Ethylene Carbonate) increasing in both volume and price, driving significant year-on-year growth in performance.

Electrolyte additive business has been unprofitable for three consecutive years

Originally, Fuxiang Pharmaceutical’s business focused on R&D, production, and sales of raw materials and intermediates for anti-infection drugs. In recent years, the company entered the lithium battery electrolyte additive field. In 2021, Fuxiang Pharmaceutical also began investing in VC.

According to the 2021 annual report, during the reporting period, Fuxiang Pharmaceutical’s subsidiary Weifang Aotong invested in the “Annual Production of 6,000 Tons of Lithium Battery Additives Project.” Once completed, this project will produce 5,000 tons of VC and 1,000 tons of FEC annually. Additionally, its subsidiary Jingdezhen Fuxiang invested in the “Annual Production of 10,000 Tons of VC and 2,000 Tons of FEC Project.” After full completion, the company will have an annual capacity of 15,000 tons of VC and 3,000 tons of FEC.

However, as the VC shortage and price surge ended, Fuxiang Pharmaceutical’s electrolyte additive business, including VC, fell into annual losses.

In 2022, revenue from the electrolyte additive business was 147 million yuan, accounting for 8.95% of the company’s total revenue, with a gross profit margin of -31.93%.

In 2023, revenue was 275 million yuan, with a gross profit margin of -6.76%; in 2024, revenue was 253 million yuan, with a gross profit margin of -8.39%. In the first half of 2025, revenue from this business was 122 million yuan, with a gross profit margin of -0.34%.

Industry research firm Xinluo Lithium believes that over the past two to three years, VC market prices have remained low, with the lowest prices reaching 43,000 yuan/ton, causing widespread losses among manufacturers. During this period of low prices, small factories could no longer sustain excessive losses and shut down, leaving only large factories operating at full capacity.

Performance is heavily influenced by VC prices

After three consecutive years of losses, Fuxiang Pharmaceutical has persisted in producing VC and has gradually become a major VC producer. According to Xinluo Lithium, in the global lithium battery additive VC market landscape in 2025, Shandong Gengyuan, Huasheng Lithium, and Suzhou Huayi are the top three. Furuide Energy and Fuxiang Pharmaceutical rank fourth and fifth.

With VC prices rising, the performance forecast shows that Fuxiang Pharmaceutical will reduce losses in 2025. In that year, the company’s revenue is expected to be 1.185 billion yuan, a slight increase of 0.61% year-on-year, with a net profit of -53.07 million yuan. Meanwhile, the company expects net profit for the first quarter of this year to be between 52 million and 75 million yuan, a year-on-year increase of 2222.67% to 3250.01%.

Fuxiang Pharmaceutical stated that in the lithium battery electrolyte additive business, driven by the sustained growth in demand for power batteries and the rapid explosion in energy storage battery demand, upstream lithium battery materials demand has surged, causing prices of products like VC and FEC to rise sharply in the fourth quarter of 2025.

It is evident that Fuxiang Pharmaceutical’s performance in 2025 and the first quarter of 2026 is significantly affected by VC prices. So, what is the future supply and demand outlook for VC?

Xinluo Lithium published an article on January 13 stating that in 2026, VC market demand will increase significantly, with projected production reaching 100,000 tons, a 45% year-on-year increase.

From the perspective of market supply and demand balance and operating rates, in 2025, the VC market’s maximum operating rate is expected to reach 86%. As demand increases in 2026, and effective capacity grows in tandem—though at a faster rate than demand—the operating rate will slightly decline. In 2027, demand will continue to grow, but capacity growth will slow, leading to a slight increase in the operating rate to 79%.

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