Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", "we," or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced unaudited financial results for the second quarter 2021.

Second Quarter 2021 Financial Results

Balance Sheet

Our balance sheet remains extremely strong. Despite continuing to invest in our new chemical factory, we have over $97 million in cash. Our current book value per share is $26.56. Based on our current stock price, Gulf continues to sell at a discount to its cash, net net cash, and working capital.

Balance Sheet Highlights
Cash  $97,058,027
Net Net Cash $78,735,522
Current Assets $104,955,195
Working Capital $95,745,220
Book Value $278,102,555

Income Statement

  • Net Revenues for Q2 2021 increased 108% to $11,148,008 compared to previous year.
  • Gross margins increased for Q2 2021 by 1157% from $336,587 to $4,232,234 compared to the same period of previous year.
  • As a percentage of revenues, gross margin for Q2 2021 was 38.0% compared to 6.3% in the previous year.
  • Direct labor and factory overheads for Q2 2021 incurred during plant shutdown decreased 19.7%. As a percentage of sales, they were 12.5% versus 32.4%.
  • G&A expenses for Q2 2021 increased $3,662,999 compared to the previous year. However, $3,133,140 of the increase was attributable to the one-time stock awards.
  • Net loss before taxes for Q2 2021 declined 19.6% to $2,346,740 compared to previous year.
  • Taxes were $(356,408) for Q2 2021 versus a benefit of $672,633 for Q2 2020.
  • The Net Loss after Taxes was $2,703,200 for Q2 2021 versus $2,244,619 for Q2 2020.
  • The company had a comprehensive net gain for Q2 2021 of $2,631,016 versus a net loss of $2,022,750 for Q2 2020.

Cash Flow For the six months, we had cash flow from operations of $7,025,775. We spent $5,806,435 on property plant and equipment for our chemical factory. Even with these expenditures and the interruption in our production for Chinese New Year in the first quarter, we were still able to generate positive free cash flow for the six months and the quarter, enabling us to increase our cash by almost $3 million compared to year-end levels.

Segment Reporting Bromine

  • Bromine revenues for Q2 2021 increased by 123% to $10,025,438 from 4,487,017 in Q2 2020.
  • Gross profits in bromine for Q2 2021 increased by 1953% to $4,471,945 from $217,778 for Q2 2020.
  • As a percentage of sales, gross profits in bromine were 45% for Q2 2021 compared to 5% for Q2 2020.
  • Bromine made a profit of $2,682,233 in Q2 2021 compared to a loss of $1,479,084 in Q2 2020.
  • Production of bromine in tonnes increased by 48% to 1,805 in Q2 2021.
  • The average selling price increased 51.3% to $5,554 for Q2 2021.
  • Bromine prices have continued at a high level. At the end of Q1, bromine was RMB 35,044. At the end of Q2, it had risen to record highs of RMB 45,950. Since the end of the quarter, it has declined slightly to RMB 43,063, still very close to its record highs. The company expects bromine pricing to remain near its current levels for the foreseeable future.

Crude Salt

  • Net revenue for the crude salt for Q2 2021 increased 29% to $1,122,570.
  • Gross margins for Q2 2021 were loss 21% compared to profit 14% in previous year.
  • The loss from operations for Q2 2021 was $578,435 compared to loss from operations of $611,472 in the same period in 2020.

Chemicals The chemical segment incurred a loss from operations of $741,312 for the three-month period ended June 30, 2021, compared to loss from operations of $654,652 in the same period in 2020.

Natural Gas Loss from operations from our natural gas segment was $62,850 for the three-month period ended June 30, 2021, compared to a loss of $53,270 in the same period in 2020.        


Factories #2, #8, and #10 The company expects to receive approvals to reopen factories #2, #8, and #10. To its knowledge, the government is currently completing its planning process for all mining areas including that for prevention of flood. As a result, the Company may be required to make some modifications to our current wells and aqueducts prior to commencement of operations of these factories to satisfy the local government's requirements.

Chemical SegmentThe Company began the construction on its new chemical facilities located at Bohai Marine Fine Chemical Industrial Park in June 2020 and basically completed the civil works by end of June 2021. Equipment installation and testing is expected to take 6 months or somewhat longer if issues occur. Trial production should take another six months. The Company will continue to post photographs on the company website showing the progress of the construction and installation of equipment.

Natural GasThe Company is continuing to work with the governments of Tianbao Town, Daying County, and Sichuan Province on getting approval for our natural gas and brine projects. We continue to maintain a staff in Sichuan Province and senior management continues to meet with government officials. While timing is still uncertain, the Company remains optimistic that it will be able to proceed with these projects.

Recent DevelopmentsAs disclosed in the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission (the “SEC”) on July 7, 2021, the Company’s former auditors Morrison Cogen LLP (MC) resigned effective June 30, 2021. On July 1, 2021, the Company engaged WWC, P.C. Certified Public Accountants (“WWC”) to serve as its independent auditor.

Business Outlook“The company is optimistic about the second half of year 2021. Production lost in the second quarter is likely to be recouped in the third quarter. Bromine price remains high. At current levels of production, our bromine business should be profitable. We have expensed our all of our annual stock grants, so overhead will be reduced. We believe we could receive approvals for one or more of our closed factories in near future. In 2022, we may begin to generate revenues from our chemical factory. We expect that our chemical business could be profitable in 2023. We continue to believe that we may be able to produce both natural gas and bromine products in Sichuan if we are able to obtain requisite governmental approvals,” said Mr. Xiaobin Liu, CEO of the Company.

Conference Call

Gulf Resources management will host a conference call on Monday, August 16, 2021 at 08:00 AM Eastern Time to discuss its Second Quarter 2021 results ended June 30, 2021.

Mr. Xiaobin Liu, CEO of Gulf Resources, will be hosting the call. The Company's management team will be available for investor questions following the prepared remarks.

To participate in this live conference call, please dial +1 (888) 506-0062 five to ten minutes prior to the scheduled conference call time. International callers should dial +1 (973) 528-0011.The Entry Code is 592817.

The webcasting is also available then, just simply click on the link below: 

A replay of the conference call will be available two hours after the call's completion during 08/16/2021 11:00 AM ET - 09/15 /2021 11:00 AM ET. To access the replay, call +1 (877) 481-4010. International callers should call +1 (919) 882-2331. The Replay Passcode is 42535.

About Gulf Resources, Inc.Gulf Resources, Inc. operates through three wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited ("SCHC"), ShouguangYuxin Chemical Industry Co., Limited ("SYCI"), and Daying County Haoyuan Chemical Company Limited (“DCHC”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil and gas field explorations and papermaking chemical agents, and materials for human and animal antibiotics. DCHC was established to further explore and develop natural gas and brine resources (including bromine and crude salt) in China. For more information, visit

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, the risks associated with the ongoing impact of COVID-19 pandemic, uncertainties associated with obtaining governmental approvals, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

CONTACT: Gulf Resources, Inc.

  Director of Investor Relations
  Helen Xu (Haiyan Xu) 


    June 30, 2021Unaudited   December 31, 2020 Audited
Current Assets                
Cash   $ 97,058,027     $ 94,222,538  
Accounts receivable     4,741,259       6,521,798  
Inventories, net     677,418       419,609  
Prepayments and deposits     2,476,867       6,146,461  
Other receivable     1,624       559  
Total Current Assets     104,955,195       107,310,965  
Non-Current Assets                
Property, plant and equipment, net     153,288,493       148,947,689  
Finance lease right-of use assets     185,276       186,272  
Operating lease right-of –use assets     8,507,190       8,868,661  
Prepaid land leases, net of current portion     10,234,582       10,134,004  
Deferred tax assets     19,254,324       18,590,227  
Total non-current assets     191,469,865       186,726,853  
Total Assets   $ 296,425,060     $ 294,037,818  
Liabilities and Stockholders’ Equity                
Current Liabilities                
Accounts, other payable and accrued expenses   $ 7,071,707     $ 5,081,701  
Taxes payable-current     1,506,771       1,326,179  
Finance lease liability, current portion     160,498       217,070  
Operating lease liabilities, current portion     470,999       477,350  
Total Current Liabilities     9,209,975       7,102,300  
Non-Current Liabilities                
Finance lease liability, net of current portion     1,747,385       1,888,903  
Operating lease liabilities, net of current portion     7,365,145       8,022,342  
Total Non-Current Liabilities     9,112,530       9,911,245  
Total Liabilities   $ 18,322,505     $ 17,013,545  
Commitment and Loss Contingencies                
Stockholders’ Equity                
PREFERRED STOCK; $0.001 par value; 1,000,000 shares authorized; none outstanding   $     $  
COMMON STOCK; $0.0005 par value; 80,000,000 shares authorized; 10,515,307 and 10,043,307 shares issued; 10,469,477 and 9,997,477 shares outstanding as of June 30, 2021 and December 31, 2020, respectively     24,375       24,139  
Treasury stock; 45,830 and 45,830  shares as of June 30, 2021 and December 31, 2020 at cost     (510,329 )     (510,329 )
Additional paid-in capital     100,569,160       97,435,316  
Retained earnings unappropriated     146,183,012       151,388,356  
Retained earnings appropriated     24,233,544       24,233,544  
Accumulated other comprehensive loss     7,602,793       4,453,247  
Total Stockholders’ Equity     278,102,555       277,024,273  
Total Liabilities and Stockholders’ Equity   $ 296,425,060     $ 294,037,818  

See accompanying notes to the condensed consolidated financial statements


    Three-Month Period Ended June 30,   Six-Month Period Ended June 30,
    2021   2020   2021   2020
NET REVENUE                                
Net revenue   $ 11,148,008     $ 5,359,483     $ 16,407,251     $ 5,917,153  
OPERATING INCOME (EXPENSE)                                
Cost of net revenue     (6,915,774 )     (5,022,896 )     (11,097,163 )     (5,944,216 )
Sales, marketing and other operating expenses     (15,625 )     (10,838 )     (25,170 )     (13,081 )
Direct labor and factory overheads incurred during plant shutdown     (1,394,717 )     (1,737,599 )     (4,008,200 )     (5,348,022 )
General and administrative expenses     (5,204,701 )     (1,541,702 )     (6,940,951 )     (2,385,039 )
Other operating income (loss)                       (15,776
      (13,530,817 )     (8,313,035 )     (22,071,484 )     (13,706,134 )
LOSS FROM OPERATIONS     (2,382,809 )     (2,953,552 )     (5,664,233 )     (7,788,981 )
OTHER INCOME (EXPENSE)                                
Interest expense     (39,368 )     (34,888 )     (76,230 )     (70,316 )
Interest income     75,437       71,188       147,890       145,844  
LOSS BEFORE TAXES     (2,346,740 )     (2,917,252 )     (5,592,573 )     (7,713,453 )
INCOME TAX BENEFIT     (356,480 )     672,633       387,229       1,929,076  
NET LOSS   $ (2,703,220 )   $ (2,244,619 )   $ (5,205,344 )   $ (5,784,377 )
COMPREHENSIVE LOSS:                                
NET LOSS   $ (2,703,220 )   $ (2,244,619 )   $ (5,205,344 )   $ (5,784,377 )
OTHER COMPREHENSIVE LOSS                                
- Foreign currency translation adjustments     5,334,236       221,869       3,149,546       (4,293,490 )
COMPREHENSIVE LOSS   $ 2,631,016     $ (2,022,750 )   $ (2,055,798 )   $ (10,077,867 )
LOSS PER SHARE:                                
BASIC AND DILUTED   $ (0.26 )   $ (0.24 )   $ (0.50 )   $ (0.61 )
WEIGHTED AVERAGE NUMBER OF SHARES:                                
BASIC AND DILUTED     10,469,477       9,517,427       10,469,477       9,517,427  

See accompanying notes to the condensed consolidated financial statements.


    Six-Month Period Ended June 30,
    2021   2020
Net loss   $ (5,205,344 )   $ (5,784,377 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
Interest on finance lease obligation     71,197       70,009  
Depreciation and amortization     8,224,864       7,559,224  
Unrealized exchange gain on translation of inter-company balances     594,150       (382,331 )
Deferred tax asset     (387,230 )     (1,929,553 )
Common stock issued for services     3,134,080        
Issuance of stock options to employee            
Changes in assets and liabilities:                
Accounts receivable     1,839,939       1,807,547  
Inventories     (252,995 )     152,369  
Prepayments and deposits     (98,992 )     32,807  
Other receivables            
Accounts and Other payable and accrued expenses     (785,889 )     (9,284 )
Retention payable            
Taxes payable     190,892       298,599  
Prepaid land leases           (369,066 )
Operating lease     (298,897 )     (268,192 )
Net cash provided by (used in) by operating activities     7,025,775       1,177,752  
Purchase of property, plant and equipment     (5,806,435 )     (9,860,142 )
Net cash used in investing activities     (5,806,435 )     (9,860,142 )
Repayment of finance lease obligation     (296,597 )     (264,976 )
Net cash used in financing activities     (296,597 )     (264,976 )
NET DECREASE IN CASH AND CASH EQUIVALENTS     2,835,489       (10,329,395 )
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD     94,222,538       100,301,986  
CASH AND CASH EQUIVALENTS - END OF PERIOD   $ 97,058,027     $ 89,972,591  
Cash paid during the periods for:                
Income taxes   $     $  
Operating right-of-use assets obtained in exchange for lease obligations   $     $  

See accompanying notes to the condensed consolidated financial statements.


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