Gulf Resources (GURE 2.69%), a China-based producer of bromine and crude salt, posted its second quarter fiscal 2025 results on August 13, 2025. The release highlighted a significant operational rebound: quarterly GAAP revenue surged to $8.3 million from $2.4 million in the prior-year quarter, a period impacted by regulatory shutdowns, while the net loss (GAAP) contracted sharply to $0.8 million from $33.1 million. There were no available analyst estimates for the quarter, but performance improved across core revenue and profit metrics. Despite these gains, the company remains in loss-making territory on a GAAP basis and cash flow remains negative, signaling that while recovery is underway, lasting profitability is yet to be achieved.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS (GAAP) | ($0.06) | ($3.09) | 98.1 % |
| Revenue (GAAP) | $8.3 million | $2.4 million | 250.1 % |
| Gross Profit | $1.0 million | ($2,869,825) | NM |
| Net Loss | N/A | ($33.1 million) | N/A |
| Cash (end of period) | $7.7 million | $10.4 million | (25.96 %) |
Business Overview and Recent Strategic Focus
Gulf Resources is a mining and chemical company headquartered in China. Its primary operations center around the extraction and sale of bromine, a chemical used in flame retardants, water treatment, and pharmaceuticals, as well as crude salt, a basic raw material for various industries. The company also owns assets in natural gas and specialty chemical segments, but these are not currently active contributors to revenue.
Recently, the company’s focus has shifted toward operational efficiency in its core bromine and crude salt businesses. Regulatory compliance remains a high-priority area due to heavy oversight from Chinese authorities. Gulf Resources is also engaged in strategic expansion, having acquired new crude salt fields to boost production, but further diversification into chemicals and natural gas is on hold until market and regulatory conditions improve.
Quarterly Highlights: Financial Performance and Operations
The most striking development was a sharp increase in GAAP revenue, which grew to $8.3 million, compared to a much lower figure in the same period last year when regulatory shutdowns weighed heavily on sales. Nearly all of this growth came from the bromine segment, where sales rose by 313% and volumes climbed 152%. Gross profit (GAAP) swung from a substantial loss in the prior year to a positive result, as cost discipline and the scaling up of production offset persistent overhead from incomplete facility reopenings.
The net loss (GAAP) was $0.8 million, down significantly from the prior-year’s figure. The reduction in loss was partly due to the absence of the prior year’s $29.2 million asset disposal in Q2 2024 (GAAP). However, the company continued to record operating losses (GAAP), signaling that full profitability has not yet been restored. Cash outflows from operations (GAAP) also decreased, with total net cash used in the first half of 2025 falling to $2.34 million from $61.86 million in the first half of 2024.
The bromine segment remains the primary driver of company performance. Bromine, an essential industrial chemical, experienced pricing volatility during the quarter, with market prices moving from RMB 29,000 per tonne at the start of the period, peaking at RMB 37,500, then dropping to RMB 23,100, and ending at RMB 24,686. Since the end of the quarter, prices increased to RMB 29,200 by August 12. Management cited both increased demand and the closure of competitor factories as factors aiding recovery. Despite improved revenue and margin, the segment still reported a small net loss (GAAP), weighed down by idle facility costs and ongoing overhead from partially closed plants.
In the crude salt business, GAAP revenue was up 27%, supported by slightly higher volumes and much stronger gross profit margins. However, after factoring in increased operating and administrative expenses, the segment posted a net loss compared to a profit in Q2 2024. Both the chemicals and natural gas segments continued to post small losses, as no sales activity occurred and facility development remains paused. Management stated that further capital allocation to these non-core units would depend on better market conditions and regulatory clarity.
No new regulatory penalties or shutdowns were reported for the period. However, the company still has two manufacturing facilities closed and is working to fully reopen and upgrade its operational base. Progress in this area, alongside the benefits from the new crude salt field acquisition, could provide additional production capacity and support future growth. Gulf Resources also continues to monitor emerging opportunities, such as sodium-ion batteries, for possible entry once business conditions stabilize.
Looking Ahead: Outlook and Investor Watch Points
No formal guidance was offered by management for the next quarter or for fiscal 2025. Instead, the company’s leadership expressed confidence in continued stabilization and stated, “We are becoming more optimistic about our business. We see signs of stabilization in the Chinese economy. Many of our competitors in bromine and crude salt have closed their factories. Demand is increasing as are prices. These conditions auger well for the third quarter and coming quarters.”
Investors will need to watch several important themes in upcoming periods. The most critical are the full reopening of closed manufacturing facilities, the company’s ability to further control costs and improve gross margins as production utilization rises, and whether ongoing volatility in bromine pricing and market demand can be managed. In addition, rising accounts receivable and remaining facility closures pose risks to capital management and achieving consistent cash flows. GURE does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
