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GR

GULF RESOURCES, INC. (GURE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue rose 23% year over year to $1.60M as bromine ASPs recovered in March; gross profit turned slightly positive ($10K) but operating loss remained large at ($4.61M), reflecting low utilization and shutdown overhead allocation .
  • Bromine ASP increased 45% YoY to $3,684/tonne; volumes fell 11% YoY to 402 tonnes and utilization dropped to 11%, pressuring unit economics; bromine segment operating loss narrowed to ($3.37M) from ($4.78M) .
  • Management highlighted potential tailwinds from rising bromine prices (briefly RMB 37,186 by Apr 10) and possible reopening of Factories #2 and #10; chemical plant completion remains postponed pending a clear path to profitability .
  • No formal guidance or earnings call transcript was provided; catalysts to watch are bromine price stability and regulatory approvals for capacity restoration .

What Went Well and What Went Wrong

  • What Went Well

    • Revenue +23% YoY to $1.60M with gross profit turning positive ($10K) vs a gross loss a year ago; operating loss improved 13% YoY to ($4.61M) .
    • Bromine pricing tailwind: ASP +45% YoY to $3,684/tonne; gross margin improved to (3.5%) from (81%) despite low utilization .
    • Management invested in flood prevention and additional crude salt fields to support future production and capitalize when pricing improves; sees potential benefit from weaker RMB and reduced industry capacity .

  • What Went Wrong

    • Utilization remained very low at 11% (vs 17% YoY) due to winter shutdown, leading to heavy overhead allocation and a bromine segment operating loss of ($3.37M) .
    • G&A nearly doubled (+94% YoY) to $1.39M; consolidated net loss widened YoY to ($4.63M), with EPS at ($0.40) vs ($0.37) .
    • Inactive businesses (chemicals, natural gas) generated no revenue and posted operating losses; management continues to defer chemical plant completion and is only exploring NG opportunities .

Financial Results

Consolidated results by quarter (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($)$2,242,365 $1,728,414*$1,604,447
Operating Income ($)($4,581,609) ($6,285,624)*($4,610,207)
Net Income ($)($3,492,883) ($18,352,519)*($4,629,500)
Diluted EPS ($)($0.33) ($17.11)*($0.40)

YoY and sequential comparison (Q1 2025 vs Q1 2024 and Q4 2024)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($)$1,307,062 $1,728,414*$1,604,447
Gross Profit ($)($812,783) N/A$10,177
Operating Income ($)($5,269,419) ($6,285,624)*($4,610,207)
Net Income ($)($3,992,132) ($18,352,519)*($4,629,500)
Diluted EPS ($)($0.37) ($17.11)*($0.40)

Consensus vs Actual (Q1 2025)

MetricConsensusActualDelta
Revenue ($)N/A (no active S&P Global consensus)$1,604,447 N/A
EPS ($)N/A (no active S&P Global consensus)($0.40) N/A

Segment breakdown and KPIs (Q1 2025)

Segment / KPIQ1 2025
Bromine revenue ($)$1,481,869
Bromine tonnes sold402
Utilization ratio11%
ASP ($/tonne)$3,684
Bromine gross margin(3.5%)
Bromine operating income ($)($3,370,836)
Crude salt revenue ($)$122,578
Crude salt tonnes4,733
Crude salt gross margin50%
Crude salt operating income ($)($554,062)
Chemicals revenue ($)$0; operating loss ($358,629)
Natural gas revenue ($)$0; operating loss ($44,844)

Note: * Starred values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2 2025+NoneNoneN/A
MarginsFY/Q2 2025+NoneNoneN/A
Segment specificsFY/Q2 2025+NoneNo quantitative guidance; company may limit sales at low prices; believes bromine prices may stabilize/increase N/A
CapexFY/Q2 2025+Not specifiedNo Q1 capex; continuing flood control and land acquisitions previously made N/A
ChemicalsFY/Q2 2025+N/APostponed completion pending profitability; exploring JV options Maintain deferral
Natural GasFY/Q2 2025+N/AExploring opportunities with local governments to restart projects N/A
Factory reopeningsFY/Q2 2025+N/AOptimistic about approvals to reopen Factories #2 and #10 (directional) Potential catalyst

No formal quantitative guidance was issued for Q1 2025.

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available; themes reflect management commentary from press releases.

TopicPrevious Mentions (Q3’24 PR)Previous Mentions (Apr 22, 2025 PR)Current Period (Q1’25 PR/8-K)Trend
Bromine pricing2024 prices depressed; volume reduced; losses incurred Prices rose to ~RMB 29k in March and ~RMB 37.5k mid-April; profitability expected at current levels ASP +45% YoY to $3,684; brief price recovery to RMB 37,186 by Apr 10; company may limit sales at low prices Improving from early-2024 lows
Utilization/capacityFlood prevention; preparing for more wells Optimism on reopening Factories #2 and #10 Utilization 11% due to winter shutdown; still pursuing approvals Short-term constrained; potential capacity upside
Chemicals strategyDeferred equipment delivery; assessing markets N/ACompletion postponed pending clear profitability; exploring JV options On hold pending economics
Natural gasHolding off on additional investments; seeking best strategy N/AExploring with local governments in Sichuan to restart Evaluative; optionality maintained
Regulatory/environmentFlood prevention program participation N/AEmphasis on environmental/flood control investments Compliance-focused; foundation for future capacity

Management Commentary

  • “We have made large capital expenditures for flood prevention and purchasing additional crude salt fields, so that we will be able to capitalize when demand and pricing in bromine increases.”
  • “With the weakness in the Chinese RMB, imports of bromine and bromine related products will be more expensive… we believe current supply is significantly lower… As the economy stabilizes, we expect our business to improve.”
  • “We continue to explore opportunities in chemicals… However… we have not identified specific opportunities… [to] provide a short-term path to profitability… we will not reorder the remaining equipment needed for our chemical factory.”
  • “We continue to hold discussions with the local governments in Daying Province… to establish a potential opportunity.”
  • “During March 2025… bromine prices had a brief recovery… [Company] may limit sales of bromine when it believes prices are too low.”

Q&A Highlights

  • The company did not provide an earnings call transcript for Q1 2025; no analyst Q&A disclosed [Functions search returned none].

Estimates Context

  • S&P Global shows no active Street consensus for Q1 2025 EPS or revenue; as such, results cannot be benchmarked to analyst estimates this quarter. Actuals: revenue $1.60M and EPS ($0.40) . Values retrieved from S&P Global where starred.

Key Takeaways for Investors

  • Bromine pricing recovery is the primary earnings lever; ASP strength in March/April and management’s willingness to limit low-price sales support margin recovery potential as utilization normalizes .
  • Near-term earnings remain constrained by low utilization and shutdown-related overhead; improved seasonality and potential factory reopenings could unlock operating leverage in subsequent quarters .
  • Strategic posture is conservative: chemical plant completion deferred and NG projects paused pending clearer economics, preserving capital while retaining optionality .
  • Balance sheet still carries cash ($8.52M as of Mar 31, 2025) to bridge near-term volatility; working capital dynamics tightened as sales skewed to March .
  • Monitor regulatory approvals (Factories #2/#10) and environmental compliance progress as catalysts for volume recovery .
  • Given absent Street coverage, price action may be more sensitive to bromine spot moves and company-specific updates than to consensus beats/misses .
  • Risk skew: exposure to China macro, regulatory approvals, and bromine price volatility; upside from price stability and capacity restoration .

Values retrieved from S&P Global where starred.