BASF Walks a Tightrope: Betting Big on China and Batteries While Cutting Legacy Costs

BASF targets 2027 for Zhanjiang profit as it launches solid-state battery material, closes South Korea plant, and slashes costs. Share price lags.

BASF is executing a high-stakes balancing act. At its new €8.7 billion Verbund site in Zhanjiang, China, the chemicals giant is targeting 2027 as the inflection point when the massive investment begins to pay off. At the same time, it is rolling out a next-generation material for solid-state batteries, shuttering an aging plant in South Korea, and squeezing fixed costs across its core businesses. The share price, however, has yet to catch fire.

Zhanjiang: Running, but Not Yet Earning

The Zhanjiang site in Guangdong province — BASF's first new Verbund facility since Nanjing in 2005 and the single largest investment ever by a German company in China — is already operational. Eighteen plants are running, 32 production lines are active, and more than 70 products are in the portfolio. The steam cracker, the world's first to run entirely on renewable energy, churns out one million tonnes of ethylene per year.

Chief Technology Officer Stephan Kothrade told investors during a deep-dive that the site should generate sales of €4 billion to €5 billion by 2030, with EBITDA between €1 billion and €1.2 billion. But the near-term picture is less rosy: for 2026, Kothrade expects a "slightly negative" EBITDA as ramp-up costs and infrastructure optimisation weigh on results. Management sees the turning point arriving in 2027.

CEO Markus Kamieth underscored that Zhanjiang is the group's "largest single investment worldwide," yet the stock has barely budged. The shares traded at €48.98, roughly 6% below their 50-day moving average of €52.07 and about 11% off the 52-week high of €55.05. Over the past 30 days, BASF lost nearly 8% of its market value.

A New Battery Bet and a Korean Goodbye

While Zhanjiang is the headline growth story, BASF is also placing smaller, targeted bets on future technologies — and ruthlessly pruning the old. The company has launched Oppanol N PLUS, a polyisobutene-based binder designed for solid-state batteries. The elastic, chemically inert material compensates for mechanical stress in cathodes or anodes and could extend battery life. With solid-state cells promising greater range, faster charging, and improved safety, BASF is positioning itself as a key materials supplier for the next generation of energy storage.

On the flip side, BASF is closing its expandable polystyrene plant in Ulsan, South Korea, in mid-June 2026. The facility has an annual capacity of 85,000 tonnes but sits in a mature, low-growth market. The message is consistent: exit commoditised segments, double down on innovation.

CoreShift: A Cost-Cutting Counterweight

Under the "CoreShift" programme, BASF plans to slash cash-effective fixed costs in its core business — four segments generating roughly €40 billion in global sales — by up to 20% compared to 2024 levels. The target date is 2029. The first quarter of 2026 provided a taste of the headwinds: EBITDA before special items fell 6% year-on-year to €2.4 billion, with sales at €16 billion. Earnings per share, however, rose to €1.06 from €0.91, helped by share buybacks. The German chemical industry shrank 6% in the same period, hit by high energy costs, weak industrial demand, and US tariffs. BASF maintains its full-year guidance of €6.2 to €7.0 billion in EBITDA before special items.

Buyback Support Runs Out of Steam

The stock's near-term cushion is evaporating. The current €1.5 billion buyback programme, launched in November 2025, expires at the end of June 2026. Between 8 and 12 June, BASF repurchased 235,000 own shares via Xetra, bringing the cumulative total since the start to nearly 30.8 million shares. The buyback is part of a larger €4 billion commitment through to the end of 2028, but the next tranche has not yet been activated. With the share price at €49.02 — up about 10% year-to-date but roughly 11% below its April high — the relative strength index sits at 40, suggesting a slightly oversold condition. Yet until Zhanjiang begins contributing meaningful earnings in 2027, the share lacks the structural demand support that the buyback had provided.