Private petrochemical enterprises that suffered a "Waterloo" in 2022 will usher in the dawn in 2023.
Huaxia Energy Network (public number hxny3060) learned that recently, the three major private petrochemical companies Hengli Petrochemical (SH: 600346), Hengyi Petrochemical (SZ: 000703) and Rongsheng Petrochemical (SZ: 002493) have announced their 2023 performance forecasts.
Overall, the total net profit of the three major private petrochemical enterprises was about 8.515 billion yuan (the highest number predicted), an increase of 86% compared with 4.578 billion yuan last year.
According to the performance forecast released by the three companies, Huaxia Energy Network summed up two highlights:
First, there is a differentiation in performance. In 2022, the performance of the three companies will decline, but in 2023, except for Rongsheng Petrochemical, the other two will achieve performance growth, and the time node of growth will be in the second half of the year.
Second, Hengli Petrochemical surpassed Rongsheng Petrochemical and became the most profitable enterprise among the three enterprises.
Hengli Petrochemical is the most profitable
On January 29, Hengli Petrochemical issued an announcement on the expected increase in performance, and the net profit attributable to shareholders of listed companies in 2023 is expected to be about 6.9 billion yuan, an increase of about 197.63% year-on-year. In the same period, it is expected to achieve a net profit of 5.64 billion yuan, an increase of about 439.57% year-on-year.
Interestingly, in the first half of the year, Hengli Petrochemical's revenue and profit are still in a state of double decline, and in the second half of the year, it ushered in a reversal, in this regard, Hengli Petrochemical said, on the one hand, with the stabilization of crude oil price fluctuations and the improvement of the fundamentals of refining and chemical capacity supply and demand under the background of global "carbon neutrality" and the strengthening of downstream demand, aromatic products, oil products and other leading refining and chemical products The price spread has expanded and the profitability has improved significantly and continued to maintain a good industry prosperity, and the overall cost environment faced by the company has stabilized and downstream demand has gradually improved.
On the other hand, benefiting from the downward trend of coal prices, the unique competitive advantage of deep coupling of oil and coal and the competitive advantage of perfect public supporting facilities in the refining and chemical industry have been further highlighted.
In addition, Hengli Petrochemical also said that with the weakening of the impact of geopolitical events on crude oil prices and the stability of coal prices, the company's competitive advantage on the cost side will continue to be strengthened, and the downstream new material project will reach production as scheduled, and will complete the "last mile" of Hengli Refinery's strong chain supplement, and profitability will also be accelerated to a reasonable level in 2024.
In 2023, Hengli Petrochemical will also promote the restructuring of its wholly-owned subsidiary, Kanghui New Materials, and Dalian Thermal Power (SH:600719), a listed company, to achieve the purpose of Kanghui New Materials landing in the capital market. At present, the restructuring application has been accepted by the Shanghai Stock Exchange. Hengli Petrochemical said that the restructuring will not lead to the loss of the company's control over Kanghui New Materials, and if the subsequent restructuring transaction goes smoothly, it may further help Hengli Petrochemical's financing process in the new materials business.
Rongsheng Petrochemical continued to decline
On January 31, Rongsheng Petrochemical released a performance forecast, which is expected to be a net profit attributable to shareholders of listed companies of 1 billion yuan to 1.2 billion yuan in 2023, a year-on-year decrease of 64.07%-70.06%, continuing the trend of declining performance in 2022.
However, compared with the first half of the year, the downward trend of Rongsheng Petrochemical's net profit in the second half of the year has slowed down. It is reported that in the first half of 2023, the net profit loss attributable to shareholders of listed companies of Rongsheng Petrochemical was 1.127 billion yuan, a year-on-year decrease of 120.99%.
As for the reasons for the decline in annual performance, Rongsheng Petrochemical said that in 2023, the dual factors of sluggish market demand and geopolitical spillover after the epidemic will lead to a slow recovery of the petrochemical industry's efficiency.
However, Rongsheng Petrochemical also said that relying on the super-large refining and chemical integration unit, optimizing energy utilization, continuing to tap potential and increase efficiency, with the world's largest aromatic hydrocarbon production capacity and unique domestic and foreign refined oil sales channels, the company's performance has obvious signs of improvement.
In 2023, Rongsheng Petrochemical also reached an important cooperation with Saudi Aramco, mainly as follows: Saudi Aramco acquired a 10% stake in Rongsheng Petrochemical for 24.6 billion yuan, and the two parties signed an agreement to start all-round cooperation in crude oil procurement, raw material supply, chemical sales, refined chemical product sales, crude oil storage and technology sharing.
Huaxia Energy Network once reported that "100 billion petrochemical giants and Saudi Aramco cooperation upgrade: mutual equity purchase, build a 67.5 billion project", this year, the cooperation between the two sides further upgraded. On January 2, Rongsheng Petrochemical issued two announcements on cooperation with Saudi Aramco.
First, Rongsheng Petrochemical intends to acquire 50% of the equity of Saudi Aramco Jubail Refining and Chemical Company, and intends to increase production capacity and improve product flexibility, complexity and quality through expansion, and Saudi Aramco will potentially acquire no more than 50% of the equity of Zhongjin Petrochemical, a subsidiary of Rongsheng Petrochemical, and jointly develop the upgrading and expansion of the existing equipment of Zhongjin Petrochemical and the development of a new downstream Rongsheng New Materials (Zhoushan) project.
Second, the two will jointly invest in the construction of Jintang new material project worth 67.5 billion yuan, and the new equipment to be built includes 3 million tons/year catalytic cracking unit, 1 million tons/year gas separation unit, 600,000 tons/year aromatic hydrocarbon extraction unit, 300,000 tons/year PEO unit, 1 million tons/year EVA combined unit and other projects and off-site projects.
Rongsheng Petrochemical said that after the completion of the project, it can achieve an average annual operating income of 86.878 billion yuan and an annual net profit of 15.463 billion yuan. The after-tax financial internal rate of return of the project is 24.81%, and the after-tax payback period is 6.11 years (including the construction period of 3 years).
Hengyi Petrochemical turned losses into profits
According to the announcement issued by Hengyi Petrochemical, it is expected that in 2023, the company will achieve a net profit of 395 million yuan ~ 415 million yuan, turning losses into profits.
Like Hengli Petrochemical, Hengyi Petrochemical's performance growth is also in the second half of the year. It is reported that in the first half of 2023, Hengyi Petrochemical achieved revenue of 64.316 billion yuan, a year-on-year decrease of 19.41%, and a net profit of 76 million yuan, a year-on-year decrease of 95.8%.
In this regard, Hengyi Petrochemical said that on the one hand, the downstream demand in Southeast Asia continued to pick up, the price spread of refined oil in the Singapore market rebounded and stabilized, the supply and demand pattern of aromatic hydrocarbon products such as PX and benzene improved, and the product price spread increased year-on-year;
On the other hand, with the steady growth of the domestic economy, the terminal demand at home and abroad has continued to stabilize and improve, and the price spread of polyester fiber products has been significantly repaired. At the same time, the cost of auxiliary materials, energy costs, logistics costs, etc. have decreased.
Hengyi Petrochemical is the only one of the large private refining and chemical enterprises in China with a refinery located overseas, with the largest single overseas project invested by a private enterprise, and is also the world's largest manufacturer of purified terephthalic acid (PTA), with PIA production capacity accounting for about 54.55% of the national production capacity (as of June 30, 2023).
At present, Hengyi Petrochemical is busy buying back shares.
On December 12, 2023, Qiu Yibo, chairman and president of Hengyi Petrochemical, proposed that it intends to use its own funds to repurchase part of the shares in a centralized bidding transaction for the implementation of employee stock ownership plans or equity incentives. Hengyi Petrochemical said that the move is mainly based on the confidence in the company's sustainable and stable development in the future and the recognition of the company's long-term value.
According to the announcement, as of January 31, a total of 64.57 million shares have been repurchased (Phase IV), accounting for 1.76% of the company's total share capital, and the total amount of the transaction is 430 million yuan.
(Please indicate the source for reprinting, article source: Huaxia Energy Network, WeChat ID: hxny3060)