Recently, listed companies have entered a period of intensive disclosure of interim reports.
Among them, the data disclosed in the semi-annual reports of leading polyester companies allow us to see the current situation of the polyester industry this year: different links in the industrial chain are facing completely different situations, and the differentiation is very obvious.
Affected by high crude oil prices and sluggish downstream demand, the performance of petroleum refining and chemical companies in 2022 fell sharply year-on-year. In the first half of this year, despite the fall in crude oil prices, the leading private refining and chemical company that has completed its transformation from a drop of oil to a silk thread has not yet emerged from performance difficulties. However, there has been improvement on a quarter-on-quarter basis in the second quarter.
Rongsheng Petrochemical (002493.SZ) disclosed a performance forecast on July 14. It is estimated that the net loss attributable to shareholders of the listed company in the first half of the year is 1.1 billion to 1.2 billion yuan, compared with a profit of 5.367 billion yuan in the same period last year, turning from profit to loss year-on-year; it is expected to deduct Net loss after non-recurring gains and losses was 1.36 billion to 1.46 billion yuan, turning from profit to loss year-on-year.
The company said that the main reason for the above-mentioned losses was the slow recovery of downstream demand during the reporting period, and the narrowing of the price spread of the company’s main products and the decrease in gross profit margin. The single-quarter profit in the second quarter is expected to be 268 million to 368 million yuan, which is significantly better than the first quarter.
Rongsheng Petrochemical is one of China’s leading private petrochemical companies and operates the world’s largest single refinery, the 40-million-ton refining and chemical integration project of Zhejiang Petrochemical Co., Ltd. In March this year, Saudi Aramco, the world’s largest oil producer, announced that it would acquire a 10% stake in Rongsheng Petrochemical at a high premium and reach strategic cooperation on crude oil procurement, raw material supply, chemical sales, etc.
In the first quarter of 2023, Rongsheng Petrochemical’s net loss reached 1.468 billion yuan, a year-on-year decrease of 147%. Looking at its main products, against the background of high oil prices, the gross profit margins of its refining, chemical, PTA and polyester chemical fiber film products all declined to varying degrees last year.
At the performance briefing in early May, Rongsheng Petrochemical explained that although oil prices have fallen since 2023, downstream demand has recovered slowly, resulting in a narrowing of the price spread of the company’s main products, resulting in a loss in the first quarter. With the steady recovery of the domestic economy and the gradual recovery of downstream demand, the company’s operating conditions are improving. In addition, the gradual commissioning of the company’s new material projects has also created new performance growth points for the company.
Hengyi Petrochemical (000703.SZ), another leading private refining and chemical company, released a performance forecast on the evening of July 14. It is expected to achieve a net profit attributable to shareholders of the listed company of 60 million to 80 million yuan in the first half of the year, a year-on-year decrease of 95.59%–96.69%.
The company explained that during the reporting period, due to the increased uncertainty in the international economic situation and the violent fluctuations in downstream demand, the prices and spreads of the company’s main products such as refined oil, polyester fiber and polyester bottle flakes all experienced year-on-year declines. Superimposed on the company’s The company’s subsidiaries followed industry practices and the characteristics of production equipment and actively implemented technological transformation and upgrading work, resulting in a year-on-year decline in the output of some of the company’s products, which was a drag on performance.
In the first quarter, Hengyi Petrochemical’s net profit attributable to the parent company was approximately 34.84 million yuan. Based on this, it is estimated that the net profit in the second quarter is expected to be 25.16 million to 45.16 million yuan, which may improve quarter-on-quarter.
Hengli Petrochemical said that driven and affected by the intertwining of domestic and foreign macro factors such as the deepening geopolitical influence and intensified trade frictions, market demand has been slowly restored, and the price difference and profitability of the company’s main chemical products have narrowed significantly. The company’s main products include chemicals and functional films. Traditional demands related to terminal consumption, infrastructure and real estate, etc. for yarn, civil yarn, industrial yarn, etc. are at a low level in the market, resulting in a year-on-year decline in the company’s profits. However, with the combined effect of the release of early backlog demand, economic policy support and the low base effect, the single-quarter profit in the second quarter is expected to be around 2.03 billion yuan, a significant improvement in profit from the previous quarter.
On the same day, Shanghai Petrochemical (600688.SH), a holding subsidiary of Sinopec and one of the largest integrated refining and chemical companies in China, issued a pre-loss announcement. The net loss attributable to shareholders of the parent company in the first half of the year is expected to be approximately 900 million to 1.1 billion yuan. In the same period last year, the net loss was 436 million yuan.
Shanghai Petrochemical stated that the reasons for its losses in the first half of this year include the fact that due to market demand, the average price drop of the company’s main chemical products was higher than the drop in crude oil costs, resulting in a reduction in product gross profit; and a drop in the company’s investment income. In the first quarter of this year, Shanghai Petrochemical had a net loss of 163 million yuan, and the loss expanded in the second quarter.
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