The representative private refining enterprises Hengyi Petrochemical Co.Ltd(000703) ( Hengyi Petrochemical Co.Ltd(000703) . SZ), Hengli Petrochemical Co.Ltd(600346) ( Hengli Petrochemical Co.Ltd(600346) . SH), Rongsheng Petro Chemical Co.Ltd(002493) ( Rongsheng Petro Chemical Co.Ltd(002493) . SZ) and Jiangsu Eastern Shenghong Co.Ltd(000301) ( Jiangsu Eastern Shenghong Co.Ltd(000301) . SZ) successively handed over their 2021 transcripts.
From the overall data, the four enterprises achieved double growth in revenue and performance in 2021, with a total net profit attributable to the parent company of more than 36 billion yuan.
Wang Yanting, senior analyst of jinlianchuang refined oil, told shell finance that the rise in crude oil prices in 2021 has played a driving role in the overall profits of refining and chemical projects. In addition, China imposed import consumption tax on light circulating oil (LCO) in June last year, shifting the demand for some refined oil from imports to China.
The price of crude oil is highly related to the price of chemical products, and the recent high oil price has also raised concerns about the sustainability of the prosperity of the refining and chemical industry.
The reporter of shell finance and economics noted that in order to avoid the sharp fluctuation of crude oil price, several private refining and petrochemical enterprises continued to carry out futures hedging business Hengli Petrochemical Co.Ltd(600346) said that the price of crude oil does not directly determine the price difference and profitability of products. The profitability of related products mainly depends on the supply and demand of various products and market conditions.
Zhang Feng, a researcher at Zhuo Chuang information, told reporters that the future capacity expansion of the refining and chemical industry is limited, and the development focus of the industry is no longer a simple capacity expansion, but a gradual transformation to production differentiation, functionalization, high-end and refinement.
four private refining enterprises have a total net profit of over 36 billion in 2021
The total profit of refining and privatization exceeds 360 in terms of annual performance and total profit of refining and 360 parent enterprises and total profit of RMB RMB 600 and 35.
Hengli Petrochemical Co.Ltd(600346) takes the lead with the revenue of 197970 billion yuan and the net profit attributable to the parent company of 15.531 billion yuan. Refining and chemical products are the pillar of Hengli Petrochemical Co.Ltd(600346) revenue. In 2021, the revenue of this sector was 104932 billion yuan, accounting for more than half, and the gross profit margin was 22.89%, a decrease of 1.46 percentage points over the previous year.
At present, Hengli Petrochemical Co.Ltd(600346) is increasing investment in downstream new material industry. In late January this year, the company announced that it plans to build a high-performance polyester project with an annual output of 2.6 million tons and a high-performance resin and new material project with an annual output of 1.6 million tons.
Jiangsu Eastern Shenghong Co.Ltd(000301) 2021 achieved an operating revenue of 51.722 billion yuan, a year-on-year increase of 53.48%; The net profit attributable to the parent company was 4.544 billion yuan, a year-on-year increase of 492.66% Jiangsu Eastern Shenghong Co.Ltd(000301) ‘s performance increased significantly. In addition to the improvement of production and operation, it also benefited from the listed company’s completion of the merger and acquisition of Jiangsu silbang Petrochemical Co., Ltd. (“silbang”) at the end of 2021. Through this investment, Jiangsu Eastern Shenghong Co.Ltd(000301) main business expands to high value-added olefin derivatives and cuts into the field of new energy and new materials.
Wang Yanting, senior analyst of jinlianchuang refined oil, told the reporter of shell finance that the rise in crude oil prices in 2021 has played a driving role in the overall profits of refining and chemical projects. In addition, in the first half of last year, the Ministry of finance, the General Administration of customs and the state Administration of Taxation issued an announcement that since June 12, 2021, some refined oil will be regarded as naphtha or fuel oil for import consumption tax, mainly involving light cycle oil (LCO), mixed aromatics Dilute asphalt three kinds of product oil. Affected by the consumption tax, the import volume of LCO and other products decreased sharply, and the demand turned to the Chinese market.
In 2014, China proposed to focus on the construction of seven petrochemical industry bases during the 13th Five Year Plan period, and encouraged powerful private enterprises, especially private enterprises in downstream industries, to participate in the reorganization and transformation of petrochemical industry and base construction in accordance with industry access requirements. Under the background of industry liberalization, refining and chemical projects of private enterprises have entered an explosive period. Hengli, Rongsheng and Shenghong have launched large-scale refining and chemical projects with an investment scale of 10 billion.
Shell finance reporter learned that the refining and chemical integration projects of Hengli Petrochemical Co.Ltd(600346) and Rongsheng Petro Chemical Co.Ltd(002493) / Zhejiang Petrochemical in China have been put into operation successively. It is reported that the Jiangsu Eastern Shenghong Co.Ltd(000301) 16 million ton refining and chemical integration project originally planned to be put into operation by the end of 2021 has been basically completed Jiangsu Eastern Shenghong Co.Ltd(000301) 4 said on April 22 that the project was preparing for commissioning.
Hengyi Petrochemical Co.Ltd(000703) is one of the few enterprises whose refining and chemical projects are located overseas. In 2012, Hengyi Petrochemical Co.Ltd(000703) established Hengyi Brunei through equity acquisition. The proposed refining and chemical integration project is located on grand Mora Island, Brunei Darussalam. In November 2019, Hengyi Petrochemical Co.Ltd(000703) announced that its Brunei project phase I had been fully put into operation. In the second half of 2020, Hengyi announced that it plans to start Brunei phase II project, with a construction period of three years and an estimated investment of US $13.654 billion.
how should the refining and chemical industry cope with the impact of high oil prices
Since 2021, crude oil prices have shown an overall upward trend, especially after January 2022, the tension in Eastern Europe has exacerbated the concern that the supply of the already tight crude oil market may be further disturbed. In February and March, the fear of supply interruption caused by tensions in Eastern Europe stimulated the continuous rise of international oil prices. Brent crude oil once reached US $139.13/barrel on March 8.
In order to avoid the sharp fluctuation of crude oil and product prices, several private refining and petrochemical enterprises continue to carry out futures hedging business, and the guaranteed amount invested in this business is disclosed to range from 1.6 billion yuan to 5 billion yuan.
The price of crude oil is highly related to the price of chemical products. The recent high oil price has also raised concerns about the sustainability of the prosperity of the refining and chemical industry.
“In the early stage, in order to cope with the rise of oil price, the company expanded its crude oil reserve capacity and stored a certain amount of crude oil before this round of oil price rise.” Hengli Petrochemical Co.Ltd(600346) 4 said to investors in April that the price of crude oil does not directly determine the price difference and profitability of products. The profitability of related products mainly depends on the supply and demand of various products and market conditions. As one of the main raw materials of the company, the price rise of crude oil will lead to an increase in costs, but the price of downstream products will also rise.
Zhang Feng, a researcher of Zhuo Chuang information, told the reporter of shell finance and economics that since January this year, the price of crude oil has increased significantly. However, due to the relatively low demand side after the year, the downstream has limited acceptance of the price of chemicals and poor cost transmission, resulting in the price rise of chemicals being less than the cost rise. Under the condition of high cost and low demand, the profits of petrochemical enterprises have been squeezed.
“The transmission of product price difference and industrial chain price is affected by many factors such as product supply and demand, raw material supply and seasonal demand. High oil price is one of the influencing factors.” Some practitioners in the refining and chemical industry told the reporter of shell finance and economics that the rise of crude oil price is conducive to the increase of the inventory value of goods in stock, and will also lead to the rise of raw material prices, but the final profit of refining and chemical enterprises still depends on the price difference of various products.
Under the impact of high oil prices and the direction of energy transformation under the superimposed double carbon target, how can private refining “catch up with the test”?
According to the statistics of Zhuo Chuang information, the one-time processing capacity of China’s crude oil will reach 941 million tons in 2021, and the action plan for carbon peak before 2030 issued by the State Council proposes that the one-time processing capacity of China’s crude oil will be controlled within 1 billion tons by 2025, which means that there is only 6.3% growth space in production capacity in the next five years.
Zhang Feng told shell finance reporters that the future capacity expansion of the refining and chemical industry is limited. The development focus of the industry is no longer a simple capacity expansion, but gradually changes to production differentiation, functionalization, high-end and refinement, and is committed to realizing the high-quality development of the refining and chemical industry. In this context, the internal structure of the refining and chemical industry is expected to change, and the internal competition will also intensify.
