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Performance of listed polyester enterprises remains divided in Q1-Q3
Listed companies successively announced their report for Q3. The operating conditions of leading companies of PFY market including Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, Tongkun, Xinfengming, and Oriental Shenghong were analyzed below:

Company name Operating income (yuan) Year-on-year growth Net profit (yuan) Year-on-year growth Net assets per share (yuan) ROE Operating cash flow per share (yuan) Gross profit margin Earnings per share Announcement date
Hengli Petrochemical (600346) 103.334 billion 35.38% 9.896 billion 45.16% 6.19 24.50% 2.61 21.13% 1.41 2020-10-29
Hengyi Petrochemical (000703) 61.321 billion -1.42% 3.057 billion 38.09% 6.81 12.72% 0.76 9.81% 0.83 2020-10-26
Rongsheng Petrochemical (002493) 77.615 billion 30.10% 5.652 billion 206.17% 5.24 22.58% 0.55 22.89% 0.9 2020-10-29
Tongkun shares (601233) 32.819 billion -11.87% 1.802 billion -26.46% 10.66 8.97% 0.41 6.13% 0.98 2020-10-31
New Fengming (603225) 23.058 billion -6.16% 260 million -76.51% 8.08 2.22% 1.04 4.46% 0.19 2020-10-29
Oriental Shenghong (000301) 15.645 billion -16.50% 236 million -80.16% 3.61 1.53% 0.31 6.18% 0.05 2020-10-31

In the first three quarters, Hengli Petrochemical and Rongsheng Petrochemical's performance maintained rapid growth; Hengyi Petrochemical's revenue was lower than last year, but its net profit increased significantly; Tongkun, Xinfengming, and Oriental Shenghong's performance declined significantly under the influence of the pandemic. However, in the third quarter, as the impact of the COVID-19 gradually weakened, revenue and net profit improved compared to the previous quarter.

Hengli Petrochemical: Relying on the world's leading integrated refining and chemical capacity and the complete upstream, midstream and downstream petrochemical industry chain layout, especially the world's largest 1.5 million tons/year ethylene plant built by the company was officially put into commercial operation in the third quarter of 2020, which further promoted the growth of business scale and the improvement of profitability, profit in the third quarter exceeded 4 billion yuan for the first time and hit a record high. All ethylene raw materials used by Hengli Petrochemical’s 1.5 million tons/year ethylene plant are basically produced by its upstream refineries and supplied through integrated pipelines. The ethylene design yield is 48% and the diene yield is 60%, which is the highest in the world and makes a full use of scale integration of refining and chemical integration.

Hengyi Petrochemical: In the past year, the Brunei refining project has continued to contribute to the performance of listed companies as a new project. Because the Brunei refining project is located in Southeast Asia, the demand for refined oil is strong, and the chemical products meet the needs of its own downstream factories, and the project policy guarantees and process Technology and other advantages are obvious. The profit in the third quarter continued to improve quarter-on-quarter, and a good net profit attributable to the parent was added.

Rongsheng Petrochemical: A record profit of 5.6 billion in the first three quarters. The ultra-high-speed growth of net profit stems from the company’s 40 million tons of integrated refining project. Units of this project operate smoothly since operated started, enjoying stably rising run rate and apparent release of profit. Affected by the pandemic, the benefits are still considerable.

Tongkun: In the third quarter, the net profit attributable to the parent was 790 million yuan, a year-on-year decrease of 25.5% and a month-on-month increase of 35.5%, of which 670 million yuan was contributed by investment income. The company's performance in the first three quarters fell due to the impact of the pandemic and international oil prices, with falling sales volume of major business and selling price.
Xinfengming: In Q3, the company achieved operating income of 9.492 billion yuan (+11.66% from the previous quarter), and net profit attributable to the parent was 59.5018 million yuan (-58.04% from the previous quarter). In terms of products, PFY achieved revenue of 5.873 billion yuan (-7.39% from the previous month), which was mainly due to the decline in sales and average prices. Narrowing price spread of PFY weighed on the company's profitability. PTA achieved revenue of 1.77 billion yuan (+67.76% from the previous month), mainly due to the substantial increase of PTA external sales (up 66.17% on the quarter).

Oriental Shenghong: During the reporting period, the company's production and operation were stable, and the construction of the 16 million tons refining integration project of Shenghong Refining (Lianyungang) Co., Ltd. proceeded as scheduled. The main reason for the performance changes in the current period was the decline in product sales prices due to the impact of the COVID-19, and the fluctuation of raw material prices also resulted into periodical adverse effects. With effectively controlled pandemic in local China, price of feedstock gradually stabilized. The performance of Q3 improved compared with Q2.

From the angle of industry, sales of polyester products improved to a certain extent with weakening influence of the pandemic. Sales of PFY were hot in Oct with the placement of orders for the online shopping spree on Nov 11, the order transfer from India and the expectation of cold winter. Profit of PFY kept increasing, and market prosperity heightened. The performance is expected to keep improving in Q4.
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