Gulf Resources, Inc. (GURE): Business Model Canvas [Dec-2025 Updated]

You're digging into the operational blueprint of Gulf Resources, Inc. right now, and honestly, after navigating those tough regulatory waters, the company is showing signs of life, making this a critical time to map out exactly how they make money. The core is simple: extracting and selling essential industrial bromine-which brought in $7,676,374 in Q2 2025-alongside crude salt, all while managing the high fixed costs and stringent compliance demanded by the Chinese government. As a former head analyst, I see this as a high-stakes balancing act between a unique resource position and operational uncertainty; you need to see the full nine blocks of their Business Model Canvas below to truly grasp the near-term risk versus the potential payoff from their specialized chemical licenses.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships Gulf Resources, Inc. (GURE) relies on to keep its core bromine and crude salt operations running and to plan for future segments. These partnerships are heavily influenced by the regulatory environment in China.

Chinese Local Governments for Operating Licenses and Environmental Approvals

Governmental bodies are a primary external partner, directly impacting operational continuity. The relationship is defined by compliance and approval cycles, which have caused significant downtime.

• A directive from the government of Shouguang City mandated a winter shutdown for bromine and crude salt facilities from December 15, 2024, to February 12, 2025.
• Natural gas and brine facilities in Daying County, Sichuan Province, are temporarily closed pending the province establishing its environmental rules.
• Chemical factories were closed due to environmental reasons, and the company is currently completing a new chemical factory, awaiting trial and full production approval.
• Gulf Resources, Inc. regained compliance with Nasdaq Listing Rule 5550(a)(2) on December 1, 2025, which cancelled a previously scheduled Hearings Panel session for December 9, 2025.

Sellers of New Crude Salt Fields, Paid with 2,059,694 Shares in Q1 2025

The acquisition of new assets is cemented through equity transactions with the sellers. This was a key event in early 2025 that expanded the asset base.

In connection with the acquisition of crude salt fields, Gulf Resources, Inc. issued 2,059,694 shares of common stock to individuals designated by the sellers on the closing date of February 28, 2025. The shares were issued at a price of $1.50 per share. The company is now initiating development activities on these new assets, expecting them to enhance both salt and bromine production capacity.

Potential Joint Venture Partners for Natural Gas and Chemical Factory Restart

While core operations are focused on bromine and crude salt, the company maintains relationships and monitors conditions for restarting its non-operational segments. These potential partners are contingent on market improvement.

• The chemicals segment operations remain suspended, with management deferring the completion of the remaining chemical factory construction until market conditions allow for sustainable profitability.
• Natural gas operations are also inactive.
• Gulf Resources, Inc. continues monitoring regulatory developments and evaluating potential joint venture opportunities specifically in the natural gas sector.

Key Industrial Suppliers for Raw Materials and Factory Maintenance

Suppliers are essential for the functioning of the core, active segments: bromine and crude salt. The performance of these segments indicates the scale of material and maintenance needs.

The company's reliance on its supply chain is evident in the output from its core segments during the second quarter of 2025. Bromine sales, which require raw material inputs and maintenance for production, skyrocketed.

Here's a look at the scale of the segments that rely on these suppliers:

The cost of net revenue for the bromine segment was $7,016,815 in Q2 2025, up 48% from the prior year, reflecting increased activity and material costs associated with higher production volumes. Finance: draft 13-week cash view by Friday.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Key Activities

Extraction and processing of bromine and crude salt

Gulf Resources, Inc. operates its core business through four wholly-owned subsidiaries, with four factories currently in operation and three awaiting government approval as of early 2025. The annual production capacity for bromine is stated at 31,506 tonnes.

Performance metrics for the second quarter ended June 30, 2025, show a significant operational increase:

For the first quarter ended March 31, 2025, the average selling price for bromine was $3,684 per tonne, up from $2,540 the prior year. Bromine sales volume for Q1 2025 was 402 tonnes.

Managing stringent Chinese environmental and operational compliance

The company incurred $3,225,808 in direct labor and factory overheads during plant shutdowns in the first quarter of 2025. A major compliance milestone was achieved when Gulf Resources, Inc. regained compliance with Nasdaq Listing Rule 5550(a)(2) on December 1, 2025. This resulted in the cancellation of a previously scheduled hearing before a Nasdaq Hearings Panel on December 9, 2025.

Strategic capital expenditure for flood prevention and capacity expansion

Gulf Resources, Inc. completed a flood prevention project for approximately $50 million in December 2023. This investment followed approximately $47 million spent over the preceding six years on repairs after two separate typhoons. During the first quarter of 2025, the company reported making large capital expenditures for flood prevention and purchasing additional crude salt fields. The acquisition of new crude salt fields involved the issuance of 2,059,694 shares of common stock valued at $1.50 per share.

Exploration and development of natural gas and brine resources (currently paused)

The natural gas and brine facilities in Daying County, Sichuan Province, are temporarily closed while the province finalizes environmental plans. For the three months ended March 31, 2025, the Natural Gas segment reported an operating loss of ($44,844) and had no revenues. For the second quarter ended June 30, 2025, the combined Chemicals & Natural gas segment loss was $388,202.

• The company continues to explore potential opportunities with local governments in Sichuan Province.
• Exploration in Tianbao town showed high levels of natural gas and brine resources.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Key Resources

You're looking at the core assets Gulf Resources, Inc. (GURE) relies on to operate its business of manufacturing bromine, crude salt, and specialty chemical products in China. These aren't just line items; they are the physical and financial foundations of their production capability.

The most immediate financial resource is the company's liquidity position as of the first quarter of 2025. As of March 31, 2025, Gulf Resources, Inc. reported a $8,523,045 cash balance. This figure is critical, especially following a period where net cash used in operations was ($1,580,128) for the three months ended March 31, 2025.

The physical infrastructure is centered in Shandong province, the heart of their primary operations. The company's ability to produce its main products hinges on these facilities and the underlying raw materials.

The operational manufacturing facilities are a key component of the Key Resources block. Gulf Resources, Inc. has:

• Four factories currently running for bromine and crude salt production in Shandong province.
• Three other facilities awaiting government approval to reopen.
• A newly constructed chemical factory in the Bohai Marine Industrial park, which is complete, with equipment being installed.

The resource base for bromine extraction is tied directly to their land holdings. Gulf Resources, Inc. expanded this base by completing the acquisition of crude salt fields in Shandong province on February 28, 2025. Furthermore, the company holds brine and natural gas facilities in Daying County, Sichuan Province, though these were temporarily closed pending local environmental plan completion.

Intangible resources include the necessary regulatory approvals to operate in this specialized sector. Gulf Resources, Inc. possesses specialized chemical production licenses, including the one noted for bromine production in China, which the company believes positions it as one of the largest producers in the country.

Here's a quick look at the scale of some of these key physical and financial resources as reported around the first half of 2025:

To be fair, the operational status of the Sichuan brine/natural gas facilities represents a contingent resource, dependent on local government directives. Still, the core asset remains the established infrastructure in Shandong, supported by the recent salt field expansion. Finance: draft 13-week cash view by Friday.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Value Propositions

The core value proposition for Gulf Resources, Inc. centers on providing essential industrial chemicals, primarily bromine and crude salt, sourced and manufactured locally within China, thereby addressing domestic supply needs.

Reliable supply of essential industrial bromine in a supply-constrained market

Gulf Resources, Inc. positions itself as a key supplier of bromine, an essential industrial chemical. The market dynamics in 2025 supported this value proposition, as evidenced by the recovery in sales and pricing following a challenging 2024. The company noted that many competitors in the bromine and crude salt sectors have closed their factories, suggesting a tighter supply environment. The bromine segment was the primary growth driver in the first half of 2025.

• Bromine sales in the second quarter of 2025 reached $7,676,374, a surge of 313% year-over-year.
• Bromine sales volume in the second quarter of 2025 increased by 152% to 1,972 tonnes, up from 782 tonnes in the previous year.
• Bromine prices showed significant recovery, fluctuating between RMB 23,100 and RMB 37,500 per tonne during the second quarter of 2025, before stabilizing at RMB 29,200.
• In the first quarter of 2025, the average selling price for bromine increased 45% to $3,684 per tonne from $2,540 in the previous year.

High-volume crude salt for alkali and chlorine alkali production

Crude salt serves as a fundamental raw material for various industrial processes, including alkali and chlorine alkali production. Gulf Resources, Inc. has expanded its asset base to support this line of business, having completed the acquisition of new crude salt fields in Shandong province in early 2025.

The company sold 4,733 tonnes of crude salt in the first quarter of 2025.

Specialty chemical products for oil/gas, papermaking, and antibiotics (future)

While the business model includes specialty chemical products, current operations reflect a deferral of this value stream due to market conditions. The company is focused on profitability from its core segments for the near term.

• The Chemicals segment generated no revenues in the first quarter of 2025.
• The chemicals segment remained non-operational as of the second quarter of 2025, pending improved market conditions.

Localized production within China, reducing import reliance

Gulf Resources, Inc. operates as a manufacturer based in China, which inherently provides a localized source for these materials, reducing reliance on international supply chains. The company's operations are concentrated in Shouguang, China. The acquisition of new salt fields is expected to enhance both salt and bromine production capacity, supporting this localized supply strategy.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Customer Relationships

Direct, dedicated B2B relationships for industrial chemical sales are central to Gulf Resources, Inc. (GURE)'s core business, primarily through its bromine segment. Bromine is an essential industrial chemical used in flame retardants, water purification compounds, dyes, and medicines. Gulf Resources, Inc. is recognized as one of the largest producers of bromine in China. For the three months ended June 30, 2025, the Bromine segment generated sales of $7,676,374, marking a 313% increase year-over-year, driven by a 152% increase in volume to 1,972 tonnes. Looking at Q1 2025 data, the average selling price for bromine was $3,684 per tonne, which was a 45% jump from the previous year. You sell a substantial portion of these industrial chemical products to industry customers located in Shandong province. The chemical products subsidiary traditionally supplied products for pharmaceuticals, oil and gas exploration, and papermaking industries throughout China, though its operations remain suspended pending improved market conditions.

Transactional sales characterize the approach for commodity crude salt. For the three months ended June 30, 2025, Crude Salt revenues increased by 27% to $667,411, with volume rising 4% to 25,934 tonnes. This segment is supported by strategic asset expansion, as the company finalized the acquisition of crude salt fields on February 28, 2025. For the first quarter of 2025, Crude Salt revenues were $122,578, with 4,733 tonnes sold.

Maintaining long-term supply stability for industrial clients is a constant operational focus, though subject to regulatory and seasonal factors. As of the last update, Gulf Resources, Inc. had four factories currently in operation, with another three awaiting government approval. The company experienced a mandated temporary shutdown of its bromine and crude salt facilities from December 15, 2024, to February 12, 2025. The rebound in Q2 2025 performance, with GAAP revenue jumping 250% year-over-year to $8.3 million, was partly attributed to competitor factory closures and increasing demand.

Investor relations are heavily focused on transparency regarding operational status and regaining/maintaining exchange listing requirements. Gulf Resources, Inc. received notification on December 1, 2025, that it had regained compliance with Nasdaq's Listing Rule 5550(a)(2). This positive development resulted in the cancellation of a scheduled hearing before a Nasdaq Hearings Panel on December 9, 2025. This compliance was achieved after a 1-for-10 reverse stock split, effective October 27, 2025, helped the stock price consistently close at or above $1.00 per share for over ten consecutive days as of November 10, 2025. The company's trailing twelve-month sales were reported at $13.92 million.

Here's a quick look at the core revenue drivers for the three months ended June 30, 2025:

The relationship with the capital markets is defined by these recent regulatory milestones, which should help stabilize investor confidence. You need to watch the operational updates closely, as the company remains unprofitable on a GAAP basis, with a net loss of $0.8 million for Q2 2025, though this loss significantly narrowed from $33.1 million in the prior-year quarter.

• Bromine segment gross profit for Q2 2025 was $659,559, swinging from a loss of $2,869,825 in the previous period.
• Crude Salt segment gross profit for Q2 2025 was $327,096, an increase of 132% from $140,936.
• The company's cash position at the end of Q2 2025 was $7.7 million, down 25.96% from the end of Q2 2024.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Channels

The current channel strategy for Gulf Resources, Inc. centers almost entirely on the direct sale of its core products, bromine and crude salt, given the suspension of its chemical segment.

Direct sales force to industrial customers in Shandong province

Gulf Resources, Inc. sells a substantial portion of its bromine and crude salt products directly to industry customers located within the Shandong province. This direct engagement model is the primary mechanism for moving product from the operational bromine and crude salt facilities to the market.

Internal transfer of bromine to the chemical subsidiary (SYCI) for processing

Historically, a certain percentage of the bromine produced by the bromine segment was used as an input for chemical products through its subsidiary, SYCI. However, as of late 2025, the chemical segment operations remain suspended pending improved market conditions. Therefore, this internal transfer channel is currently non-operational.

Direct distribution from factory gates to end-users

The company's distribution model leans heavily on direct sales, meaning product moves from the factory gates to the end-users with minimal reliance on third-party distributors for its primary products. The sales offices supporting this distribution are located at the headquarters in Shouguang, Shandong Province.

The financial scale of the active channels for the three months ended June 30, 2025, reflects the current focus on bromine and crude salt:

The chemical products subsidiary, when operational, traditionally supplied products to specific end-user industries throughout China. These target markets define the potential reach of that dormant channel:

• Pharmaceuticals industries
• Oil and gas exploration industries
• Papermaking industries

For the chemical products, distribution was mainly direct to customers, with only a minor share of sales historically going through distributors.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Customer Segments

Gulf Resources, Inc. primarily serves customers through its operational Bromine and Crude Salt segments as of the second quarter of 2025, with other segments currently inactive.

The Industrial manufacturers using bromine segment is the dominant revenue driver, as evidenced by the Q2 2025 financial performance. Bromine sales for the three months ended June 30, 2025, reached $7,676,374, a year-over-year increase of 313%. The volume sold in this segment increased by 152% to 1,972 tonnes.

The applications for this bromine customer base include:

• Manufacturing of various bromine compounds for industrial use.
• Flame retardants.
• Water purification compounds.
• Fumigants.

The Chemical and food processing industries requiring crude salt represent the secondary operational customer base. Crude Salt revenues for Q2 2025 were $667,411, marking a 27% increase over the prior year. The volume for this segment saw a 4% increase, totaling 25,934 tonnes for the quarter.

For the bromine segment specifically, Gulf Resources, Inc. sells a substantial portion of its output to a limited number of customers within the People's Republic of China (PRC). The customer concentration for bromine in fiscal year 2024 was:

The Pharmaceutical and agricultural chemical producers are served by the bromine products, which include intermediates in organic synthesis, medicines, and disinfectants.

Regarding the Oil and gas exploration companies (future/non-operational chemical segment), the Chemicals & Natural gas segments were reported as:

• Non-operational as of the three months ended June 30, 2025.
• Combined loss for these non-operational segments in Q2 2025 was $388,202.
• The company noted that further capital allocation to these non-core units depends on better market conditions.

To put the current revenue contribution in perspective, here is a comparison of the operational segment revenues for Q2 2025:

Gulf Resources, Inc. (GURE) - Canvas Business Model: Cost Structure

You're looking at the cost side of Gulf Resources, Inc. (GURE) operations as of late 2025, and it's clear that fixed costs and necessary, non-revenue-generating expenditures are a major factor in their financial picture. The company's cost structure is heavily influenced by the cyclical nature of its production, particularly the mandatory winter shutdowns.

High fixed costs from direct labor and factory overheads during shutdowns are a significant drain. For the first quarter of 2025, when considering the full allocation for factory overhead incurred during plant shutdowns alongside G&A expenses, the crude salt business alone recorded an operating loss of ($554,062). This compares to an operating loss of only ($75,092) in the previous year's first quarter, showing how fixed costs hit harder when production is low. All of Gulf Resources' facilities were closed for the winter shutdown from December 15, 2024, to February 12, 2025, meaning a substantial portion of fixed costs were absorbed during this period. The prompt suggests a figure of $3,225,808 related to these overheads during shutdowns in Q1 2025, which you should track against the actual reported figures.

The Cost of Revenue (Cost of Goods Sold) for bromine and crude salt production showed improvement in Q1 2025, despite low utilization. Total Cost of Revenue for the three months ended March 31, 2025, was $1,594,270, which was a 25% decrease from the $2,119,845 reported in Q1 2024. This reduction helped turn the overall gross profit positive at $10,177 for the quarter, compared to a gross loss of ($812,783) the year prior. However, the bromine segment's extremely low utilization rate of 11% meant that overhead had to be allocated over a lower number of tonnes, pressuring margins.

Significant General and Administrative (G&A) expenses also played a role in the cost base. In Q1 2025, G&A expenses reportedly surged by 94% year-over-year. The specific amount provided for Q1 2025 G&A is $1,389,523. This increase, when combined with factory overheads, heavily impacted the operating results of the crude salt segment.

You must also account for Capital expenditures for new land and environmental compliance infrastructure. Gulf Resources, Inc. explicitly stated they made large capital expenditures for flood prevention and purchasing additional crude salt fields to prepare for future demand increases. While specific CapEx for environmental compliance infrastructure isn't itemized, recent investment cash flow has been negative, reflecting intensive capital expenditure efforts totaling $8.67M in a recent period ending late 2025. Furthermore, cash flow insights hint at ongoing capital expenditure commitments, revealing a negative free cash flow of approximately $1.96M in Q2 2025.

Here's a quick look at the key cost components we have data for from Q1 2025:

The cost structure shows a clear tension between managing high fixed overheads during mandated downtime and the variable costs associated with production when capacity utilization is low, such as the 11% bromine utilization ratio seen in Q1 2025. The company is spending capital now-like the purchase of new crude salt fields-hoping to lower the per-unit cost when operations normalize.

• Direct labor and overhead are fixed costs during winter closures.
• Cost of Revenue decreased by 25% in Q1 2025.
• G&A expenses saw a significant 94% increase in Q1 2025.
• Capital spending is focused on new land and infrastructure.
• Chemicals and Natural Gas segments are currently non-operational, meaning their fixed costs are a pure drag on profitability.

Finance: draft 13-week cash view by Friday.

Gulf Resources, Inc. (GURE) - Canvas Business Model: Revenue Streams

You're looking at the core of Gulf Resources, Inc.'s (GURE) current financial engine, which, as of late 2025, is heavily concentrated in two industrial commodities. Honestly, the model is straightforward right now, focusing on maximizing output from existing, operational assets.

Bromine sales are the undeniable primary driver of Gulf Resources, Inc.'s revenue. For the three months ended June 30, 2025, this segment brought in $7,676,374. That single segment accounted for the vast majority of the total net revenue of $8,343,785 for the quarter. To give you a sense of the operational rebound, the volume of bromine sold in Q2 2025 was 1,972 tonnes, a significant increase of 152% from the 782 tonnes sold in the prior-year period. This is where the company is putting its focus; they are defintely prioritizing this core business.

The second key component of current revenue is Crude Salt sales. In Q2 2025, Crude Salt revenues were $667,411, up 27% year-over-year. The volume for crude salt was 25,934 tonnes, showing a modest 4% increase from the 24,852 tonnes shipped in the same quarter last year. These two products form the entire operational revenue base for Gulf Resources, Inc. right now.

The nature of Gulf Resources, Inc.'s business means that revenue is generated from the sale of industrial commodities, which inherently links financial performance to the formula of volume multiplied by a volatile market price. The bromine market, for instance, showed this volatility clearly in Q2 2025; prices fluctuated between RMB 23,100 per tonne and a peak of RMB 37,500 per tonne during the quarter, before settling near RMB 24,686. This price movement directly impacts the top line, even when volume is increasing, as seen with the 152% volume jump in bromine.

Here's a quick look at the segment revenue breakdown for the second quarter of 2025:

Regarding expansion, there is potential future revenue from specialty chemicals and natural gas extraction. However, as of the Q2 2025 reporting, both the chemicals segment operations and the natural gas segment remained non-operational. Management has elected to defer the completion of remaining chemical factory construction and is waiting for more favorable market conditions to bring these assets online. The company is currently focused on generating profits and free cash flow from the core bromine and crude salt segments first.

The current state of these non-core segments is reflected in their financial impact:

• Chemicals & Natural gas combined lost $388,202 in Q2 2025.
• Facility development on newly acquired crude salt fields is underway, which is expected to enhance future salt and bromine capacity.
• Reopening of manufacturing facilities #2 and #10 may be facilitated by these new salt assets.
• Management has explicitly stated they will continue to defer capital allocation to non-core units until market conditions allow for sustainable profitability.

Finance: draft a sensitivity analysis on bromine revenue based on a 10% swing in average selling price for Q3 2025 by Friday.