Soda Ash Leader's Performance "Changes Face": Shandong Haihua Posts Massive Loss of 1.388 Billion in 2025, Breaking Through

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On March 20th, the leading soda ash company Shandong Haike (000822.SZ) disclosed its 2025 annual report, delivering an unexpectedly poor performance. Data shows the company achieved total revenue of 4.745 billion yuan, a decrease of 21.07% year-over-year; net profit attributable to shareholders was a loss of 1.388 billion yuan, turning from a profit of 39.22 million yuan in the same period last year, a decline of 3,638.09%, marking the worst performance since listing and reflecting the deep adjustment challenges faced by the soda ash industry in 2025.

As a benchmark enterprise in China’s soda ash industry, Shandong Haike’s performance decline is not an isolated case but a microcosm of the entire industry’s downward cycle. In 2025, the soda ash industry continued its bear market pattern, characterized by “high supply, high inventory, low demand” throughout the year, directly dragging down the profitability of industry companies. The annual report shows that revenue from core product soda ash was 3.218 billion yuan, down 26.31% year-over-year, accounting for 67.82% of total revenue, becoming the main driver of the performance decline.

Falling prices and quantities are among the core reasons for Shandong Haike’s performance pressure. In 2025, domestic soda ash capacity saw a concentrated release, with a total of 5.9 million tons of new capacity added throughout the year, an increase of about 15%. From 2023 to 2025, nearly 14 million tons of new capacity was added, a 40% increase, leading to serious industry overcapacity. Meanwhile, downstream demand remained weak, with key consumption sectors such as glass and photovoltaics experiencing demand declines. Although demand for light soda ash increased slightly due to rising needs in lithium carbonate and baking soda, demand for heavy soda ash dropped sharply by 1.17 million tons, marking the first decline in nearly five years, with a decrease of about 0.3%.

Weak demand combined with overcapacity directly caused soda ash prices to plummet. In 2025, the average annual price of soda ash fell by 32% year-over-year, with spot prices at the end of the year dropping to 1,100–1,200 yuan/ton, hitting a new low for the year, while futures delivery average price was only 1,255 yuan/ton. The sharp price decline squeezed profit margins, with Shandong Haike’s gross margin for soda ash business at just 3.30%, down 9.51 percentage points year-over-year. The company’s overall gross profit margin also fell to 8.86%, a decrease of 5.11 percentage points.

Large asset impairments became the “last straw” crushing performance. The annual report shows that in 2025, Shandong Haike recognized asset impairment losses of 1.199 billion yuan, a year-over-year increase of 309.8%, mainly due to fixed asset impairments, accounting for over 86% of the total annual loss. As a result, the company’s net loss in the fourth quarter reached 991 million yuan, accounting for 71.4% of the total annual loss, making it the main contributor to the year’s losses.

In addition to industry conditions, the company’s own cost and expense pressures further worsened losses. In 2025, operating costs decreased by 16.11% year-over-year, but this was less than the 21.07% revenue decline, indicating that cost pressures were not fully alleviated. Meanwhile, selling expenses increased by 39.22%, mainly due to higher chlorine disposal costs; financial expenses surged by 326.28% due to increased borrowings and rising interest rates, further eroding profits. Moreover, the company’s operating cash flow turned negative, ending the year at -1.04 billion yuan, a decrease of 106.27% year-over-year, highlighting cash flow pressures.

Facing the industry bear market and performance difficulties, Shandong Haike has initiated strategic measures to break through. The company is actively transforming, planning to invest 4.837 billion yuan in upgrading soda ash production facilities for quality, efficiency, energy saving, and environmental protection. It is also participating in the capital increase of the Tongliao Naiman natural soda ash project, China’s largest natural soda ash mine, with an investment of 2.32 billion yuan to acquire a 29% stake. Natural soda ash production costs are over 30% lower than those of the ammonia-soda process. The Tongliao Naiman project aims to build a 5 million ton capacity, which, if successfully implemented, will enable Shandong Haike to develop both synthetic and natural soda ash production lines, effectively reducing costs and optimizing product structure.

It is worth noting that the supply-demand imbalance in the soda ash industry is unlikely to change significantly in 2026. Although the plan for new capacity addition will decrease overall, the capacity coming online at the end of 2025 is expected to translate into increased supply in 2026, with total output approaching 38.74 million tons. Inventories are likely to continue rising, and the price center may further decline, with industry losses potentially persisting. For Shandong Haike, its 2.22 billion yuan in cash at year-end provides short-term debt repayment security, but accelerating transformation and coping with ongoing industry downturn remain urgent challenges.

From the huge losses of industry leaders to the deep adjustment of the entire sector, 2025 was a winter for the soda ash industry. For Shandong Haike, this “performance flip” is both a challenge and an opportunity. Its initiatives in natural soda ash and plant upgrades may help it seize opportunities amid industry reshuffling. In the future, as capacity clears and demand recovers, whether this leading soda ash company can emerge from the loss cycle and return to profitability remains a key market focus.