Summary of Gulf Resources Inc.

Business Operations

• Type of Business:
  • Manufacturer and trader of bromine, crude salt, chemical products, and natural gas in China.
• Main Products & Segments:
  • Bromine: Used in flame retardants, fumigants, water purification, dyes, medicines, disinfectants.
  • Crude Salt: Used in alkali, chlorine, chemical industries, and as edible salt.
  • Chemical Products: Used in oil and gas exploration, papermaking, inorganic chemicals, and antibiotics for humans and animals.
  • Natural Gas: Exploited from brine water and natural gas wells in Sichuan Province.

Corporate Structure & Subsidiaries

• Holding Company: Gulf Resources, Inc., a Nevada corporation.
• Main Subsidiaries:
  • SCHC: Produces and trades bromine; located in Shandong Province, China.
  • SHSI: Produces and trades crude salt.
  • SYCI: Produces and sells chemical products (currently closed since November 2017 for relocation).
  • DCHC: Explores and develops natural gas and brine resources in Sichuan; trial operations started in 2019.

Production Sites

• Located in Shandong Province, China with multiple properties and land use rights.
• Bromine factories are under rectification and some are temporarily shut down due to government safety/environmental regulations.
• The company owns land use rights but not land; land is owned by the state.
• Key sites include factories with capacities ranging and age-dependent utilization, with some facilities destroyed or under renovation.

Key Financial Data (2024)

• Total Revenue: ~$7.66 million (down 75% from 2023 due to lower sales prices and volumes).
• Net Loss: ~$58.94 million (slightly less than 2023 loss of ~$61.80 million).
• Employees: Approximately 367 full-time employees.
• Cash and Equivalents: ~$10 million (significantly decreased from ~$72.22 million in 2023).
• Net Operating Loss: Around $21.28 million.
• Major Expenses:
  • Loss on disposal of property, plant, equipment (~$29 million).
  • Impairment of property, plant, equipment (~$6.77 million).
  • Significant flood prevention project costs (~$46.51 million in 2018).

Customers & Suppliers

• Customers:
  • Limited number of customers, with the top three bromine customers accounting for about 35% of bromine revenue in 2024.
  • Main customers include Shandong Morui Chemical, Shandong Brother Technology, and Shouguang Weidong Chemical.
• Suppliers:
  • Principal raw material suppliers include Laizhou Shengfu Chemical, Weifang Wanhong Chemical, Shandong Xinlong International Trade, and Shouguang Runfeng Trading.
  • All raw materials for bromine and crude salt are purchased from these suppliers.

Revenue Details (2024)

• Bromine Sales: ~$5.55 million, 72.4% of total revenue.
• Crude Salt Sales: ~$2.05 million, 26.8% of total revenue.
• Chemical Products: No revenue (factory closure since 2017).
• Natural Gas: ~$61,207, accounts for 0.8%.

Production & Capacity

• Bromine capacity is approximately 31,506 tonnes annually with utilization ratios between 7% and 25% depending on facility.
• Significant drop in bromine and crude salt sales compared to 2023.
• Bromine unit prices decreased by 27%; sales volume for bromine down by 72%.
• Crude salt unit prices decreased by 13%; sales volume down 20%.

Regulatory & Environmental

• The company complies with Chinese safety and environmental laws.
• Multiple factories temporarily shut down and under rectification.
• New factory construction ongoing at Bohai Marine Fine Chemical Industry Park, costs around $69 million.
• Company is involved in extensive government approvals, safety protocols, and environmental protection measures.

Market & Competition

• The company’s stock is traded on NASDAQ under the symbol GURE.
• The company has about 39 registered shareholders as of April 10, 2025.
• Faces competition from domestic Chinese bromine, salt, and chemical producers, including Shandong Yuyuan Group, Shandong Haihua Group, among others.
• Regulatory risks include potential delisting from NASDAQ due to non-compliance with listing rules and Chinese government policies.

Summary

Gulf Resources Inc. is a China-based producer and trader of bromine, crude salt, chemicals, and natural gas, primarily serving the Chinese domestic market. It has experienced significant revenue declines in 2024 due to lower sales prices and volumes and ongoing government environmental and safety regulations impacting its operations. The company is actively involved in factory rectifications, land and resource rights management, and new project developments, including a new chemical factory costing approximately $69 million.