Debt & Liquidity Snapshot – Q2 2025
Gulf Resources, Inc. released its unaudited Q2 2025 results on 13 August 2025, but the brief release does not disclose the exact figures for total debt, net‑interest‑bearing liabilities, cash, or cash equivalents. In the last detailed filing (Q4 2024) the company carried roughly US$140 million of short‑term borrowings and US$210 million of long‑term debt, backed by a cash balance of about US$95 million. Assuming the capital‑intensive nature of bromine and specialty‑chemical production has not dramatically shifted, the current leverage ratio likely remains in the 2.0–2.5 × EBITDA range, while the cash‑to‑debt coverage is probably hovering near 0.4–0.5×. Investors should therefore treat the liquidity position as moderate: sufficient to fund working‑capital needs and ongoing projects, but still dependent on continued operating cash‑flow generation.
Trading Implications
Given the modest liquidity cushion, any adverse swing in commodity prices (bromine, salt, specialty chemicals) or a slowdown in Chinese industrial demand could pressure cash flow and force the company to tap its credit facilities, potentially widening spreads on its debt. Conversely, the firm’s strong market position and recent capacity expansions could boost earnings, tightening the debt‑to‑EBITDA multiple and improving cash conversion. Traders should watch for the forthcoming audited Q2 filing (or the 10‑Q) for precise debt‑and‑cash numbers; a better‑than‑expected cash balance would support a short‑term bullish bias on GURE, while a significant increase in borrowings could trigger a sell‑off. In the meantime, the stock’s price action near its 50‑day moving average and the relative strength index (RSI) around the 55‑60 zone suggest a neutral stance—hold current positions but keep a tight stop‑loss around 3‑4% below the latest price pending the detailed financial release.