Wanhua Chemical Group (600309.SS) Earnings Review: 3Q26 beat despite sequential spread contraction, volume and FCF the key surprise; Buy

Goldman Sachs reviews Wanhua Chemical Group's 3Q26 results. Net profit beat GSe by double digits, driven by higher-than-expected revenue, lower-than-expected opex and volume growth, despite a sequential contraction in polyurethane and specialty chemical spreads. Gross margin improved year on year but declined from the 2Q peak. Sales grew across all segments, with polyurethane and specialty chemicals volumes rising, while ASPs remained elevated. Operating cash inflow increased and capex fell, turning free cash flow positive versus negative FCF in both comparison periods and lowering net gearing to a three-year low. Goldman Sachs maintains Buy and slightly raises its 12-month target price, rolling the valuation base to 2027E and cutting the EV/EBITDA multiple to reflect slower growth as spreads normalize from the 2Q peak. The results suggest spreads across Wanhua's portfolio could remain elevated in a higher-for-longer oil price environment, while market share gains and new product expan