Interface News Reporter | Hou Ruining
The 2023 performance reports of the four major private refining and chemical enterprises have all been released. Rongsheng Petrochemical (002493.SZ) is the only company with a decline in net profit, and Hengli Petrochemical (600346.SH) has become the profit king this year.
On April 25, Rongsheng Petrochemical released a report saying that the company's net profit attributable to the parent company last year was 1.158 billion yuan, a year-on-year decrease of 65.33%.
In the same period, Dongfang Shenghong (000301.SZ) net profit attributable to the parent company was 717 million yuan, a year-on-year increase of 17.35%, Hengyi Petrochemical (000703.SZ) net profit attributable to the parent company was 435 million yuan last year, a year-on-year increase of 140.34%, and Hengli Petrochemical's net profit attributable to the parent company was 6.9 billion yuan, a year-on-year increase of 197.83%.
Based on this calculation, the four major private refining and chemical enterprises made a net profit of 9.21 billion yuan last year, and Hengli Petrochemical accounted for 75%.
Last year, due to the large decline in the prices of crude oil, natural gas and most chemical products, the petrochemical industry was under great operating pressure.
According to the statistics of the China Petroleum and Chemical Industry Federation, the petrochemical industry achieved operating income of 15.95 trillion yuan last year, down 1.1 percent year-on-year, and total profit of 0.87 trillion yuan, down 20.7 percent year-on-year.
In terms of industries, the refining industry has increased its operating income and profit due to its low base in 2022. Last year, the refining industry achieved a profit of 65.6 billion yuan, a year-on-year increase of 192.3%.
In the chemical industry, the prices of most chemical products have fallen significantly, and both operating income and profits have declined. Last year, the chemical sector achieved a profit of 486.26 billion yuan, a year-on-year decrease of 31.2%.
Against this background, refining and chemical enterprises, which account for a large proportion of oil refining business, made relatively good profits last year, while those that accounted for a large proportion of chemical products did not make good profits.
As of the end of last year, Rongsheng Petrochemical's refined oil, paraxylene (PX) and purified terephthalic acid (PTA) had an annual design capacity of 13.66 million tons, 10.6 million tons and 21.5 million tons, respectively.
In terms of the proportion of product revenue, oil refining products accounted for 37.49% of Rongsheng Petrochemical's total revenue, chemical products accounted for 37.46%, PTA accounted for 16.36%, and polyester chemical fiber film accounted for 4.53%.
In terms of gross profit margin, the gross profit margin of Rongsheng Petrochemical refining products was 20.26%, the gross profit margin of chemical products was 10.16%, the gross profit margin of polyester chemical fiber film was 3.21%, and the gross profit margin of PTA was -0.64%.
From the perspective of product revenue growth, Rongsheng Petrochemical Trade and other sectors had the largest revenue growth of 117.83%, but its gross profit margin was only 1%, down 7.8 percentage points year-on-year, the largest decline.
Judging from the above data, there are two main reasons for the decline in net profit of Rongsheng Petrochemical last year. First, PTA production capacity is large, but the gross profit of products is too low, and second, the gross profit margin of trade has fallen significantly.
The annual report shows that among the companies affiliated to Rongsheng Petrochemical last year, Zhejiang Petrochemical had the highest net profit of 1.366 billion yuan. There are two subsidiaries with losses, namely Yisheng Dahua's net loss of about 130 million yuan and Yisheng New Materials' net loss of 570 million yuan. These two companies are mainly engaged in the production and sales of PTA and polyester bottle flakes, import and export of goods and domestic trade.
Rongsheng Petrochemical is the largest private refining and chemical enterprise in China, and its subordinate holding company, Zhejiang Petrochemical, has formed a refining capacity of 40 million tons/year.
Last year, Hengli Petrochemical's net profit nearly tripled. The company believes that its core advantages mainly lie in the cost leadership of the refinery's super-large units and the product operation of "oil is oil, enene is good, and fang is fang".
In addition, Hengli Petrochemical has also implemented "continuous cost improvement and endogenous growth based on internal cost reduction and efficiency improvement", which has also become one of the key drivers for its performance recovery last year.
Hengli Petrochemical has a crude oil processing capacity of 20 million tons, ranking second among the four major private refining and chemical enterprises. The company also has a coal processing capacity of 5 million tons/year, an ethylene plant of 1.5 million tons/year, an annual PX production capacity of 5.2 million tons, and a PTA production capacity of 16.6 million tons.
Last year, Hengli Petrochemical's refining and chemical products accounted for 51% of the total revenue, PTA accounted for 31%, and polyester products accounted for 15%. In terms of gross profit margin, the gross profit margin of refining and chemical products was 18.53%, the gross profit margin of polyester products was 10.4%, and the gross profit margin of PTA was -1.36%.
In terms of sales volume, the sales volume of its refined and chemical products was the largest, with 21.64 million tons, the sales volume of PTA was 14.22 million tons, and the sales volume of new material products was 4.09 million tons.
Dongfang Shenghong is the third largest private refining and chemical enterprise in China. Last year, its revenue from refining products accounted for 20.67%, other petrochemical and new chemical materials accounted for 60.95%, and polyester yarn revenue accounted for 16.34%.
In terms of gross profit margin, the gross profit margin of its refined products was the highest, at 27.04%, a year-on-year increase of 11.89 percentage points, while the gross profit margin of other petrochemical and chemical new materials was 7.44%, and the gross profit margin of polyester yarn was 5.68%, down 0.47 percentage points and 0.92 percentage points respectively.
Last year, the sales volume of refining products with the highest gross profit margin of Dongfang Shenghong was only 4.25 million tons, the sales volume of other petrochemical and new chemical materials was 14.92 million tons, and the sales volume of polyester yarn was 2.58 million tons.
Dongfang Shenghong has a refining capacity of 16 million tons/year, which is mainly responsible for Shenghong Refining & Chemical, and a 2.4 million tons/year methanol-to-olefins and 700,000 tons/year propane dehydrogenation units, which are mainly operated by Serbang Petrochemical, which is also a leading enterprise in the EVA industry, with an EVA production capacity of 300,000 tons/year, mainly used to produce photovoltaic-grade EVA.
Hengyi Petrochemical's net profit attributable to the parent company increased by 1.4 times last year, second only to Hengli Petrochemical. During the period, the revenue of polyester yarn, oil refining and supply chain service products accounted for 34%, 23% and 20% of its total revenue, respectively.
The three products with higher gross profit margins are chemical products, isophthalic acid (PIA) and polyester yarn, which are 11.67%, 6.39% and 4.48% respectively.
According to the annual report, among Hengyi petrochemical products during the period, PIA's gross profit margin increased the most, at 25.77%, its sales volume increased by 465.40%, and its revenue increased by more than 4 times.
In addition to products, Hengyi Petrochemical's long-term equity investment income has also increased the company's profits. According to the annual report, the company indirectly holds a 3.54% stake in Zheshang Bank. Last year, Zheshang Bank's net profit was 15.493 billion yuan.
As of the end of last year, Hengyi Petrochemical had an annual design capacity of 8 million tons of crude oil processing capacity, PTA participated in the holding capacity of 21.5 million tons, and participated in the holding of 11.115 million tons of polymerization capacity. The Company's main products are refined oil, PTA, PLA, polyester yarn, polyester fiber and others.
Hengyi Petrochemical is the only large private refining and chemical enterprise to operate refineries overseas, and the company has built the largest overseas project in Brunei with the largest single investment among private enterprises. Currently, the Brunei's refinery's 8 million tonnes Phase 1 design capacity accounts for about 3% of Southeast Asia's total refining capacity.
Southeast Asia has abundant oil and gas resources, but due to insufficient infrastructure investment, it is currently the world's largest net import market for refined oil products, which brings opportunities to the development of Hengyi Petrochemical.
Hengyi Petrochemical said that since 2024, the cracking spread of refined oil in Singapore will remain high and stable, and the profitability of Brunei refineries is expected to continue to improve steadily.