Who Says The Economic Situation Is Bad? Hengli Petrochemical Company Has Made A Huge Profit In 2019.

Hengli Formosa Petrochemical Co (hereinafter referred to as "Hengli stock") released the 2019 performance forecast in January 17th evening. It expects the company's net profit in 2019 to be 10 billion 900 million yuan, up from 3 billion 323 million yuan in the same period last year, up 228.06% over the same period last year.


Hengli shares said that the company's performance change during the reporting period was based on the following reasons:


1. During the reporting period, the Hengli 20 million ton / year refining and chemical integration project, which was built solely by the company, took the lead in the whole industry in 2019 and completed the formal commercial operation in May. This project has become the main source of the company's current profit structure and the main driving force for its growth.


2, during the reporting period, on the one hand, it benefited from the better supply and demand pattern and the average price difference level of the PTA industry in the whole year of 2019. The company's PTA business profit level increased last year. On the other hand, the polyester chemical fiber business of the company maintained a relatively stable profit margin throughout the year. The company's original PTA and polyester business are in good condition, and further thickened the company's profits.


It is understood that Hengli shares "Hengli refinery 20 million tons / year refining and chemical integration project" is the first private refining and chemical integration project approved by the state. The project has been completed efficiently for 19 months and has become the world's first petrochemical project in the world's seven largest petrochemical industrial bases. In May 2019, the whole process was fully loaded and successfully launched, and the PX and refining links of the upstream polyester plant were successfully achieved. Compared with the traditional oil refining oriented enterprises, the non replicability and competitiveness of the company's large refining and chemical projects are mainly reflected in the following aspects: advanced project design, advanced layout of oil refining and ethylene production, fast construction time and low investment cost; modular integration of various advanced technologies, and technology package first.


In addition, Hengli shares is the largest listed company with PTA rights and interests. At present, the 6 million 600 thousand ton PTA production base is the largest PTA monomer factory in the world. In addition, the construction of 2 2 million 500 thousand ton / year PTA projects is expected to be delivered in December 2019 and 2020Q2 respectively, when the total capacity of PTA will reach 11 million 600 thousand tons. The project will not only adopt the most advanced technology construction, but also share the original utility projects, thereby effectively reducing costs and enhancing overall competitiveness. The company is also building 1 million 350 thousand tons of high quality textile new material projects to further consolidate the status of the downstream polyester industry.


The industry believes that in several major private refinery projects, Hengli shares have the fastest progress. In May 2019, the whole industry took the lead in putting into operation, and then divided into two steps. The commissioning of refinery and petrochemical projects has contributed new growth points to the company. In the first three quarters, the PTA profit was stable but the filament was under pressure. The 1 million 500 thousand ton ethylene project under construction will soon be put into operation, and it will also become a new growth point of the company's performance.


Guo Jin securities analyst Xu Junyi also said that at the bottom of the long cycle of the industry boom cycle and the loss of the whole industry, Hengli Petrochemical's total capacity, including olefin, is fully realized. According to the theoretical calculation, the approximate rate can reach an annual profit of ten billion. This is a structural change with the simultaneous interpreting of the traditional market recognition cycle to the bottom, leading to a downward spiral or even a loss. Judging from this, Hengli Petrochemical has the capability of significant profit growth and sustained high profit growth in 2020 when the industry boom continues.


Xu Junyi introduced polyester industry in the fourth quarter of 2019, a relatively significant profit narrowed. The PX link has been narrowed by the impact of the operation of zhe petrochemical and Hengyi Brunei project, but the profit margin has been narrowed. However, the PX- crude oil price difference has been supported near the average cost of the industry by 2400 yuan. PTA is affected by the new Dushan's energy commissioning and the Hengli 4# line's expected operation.


According to the results, the first three quarters of 2019, Hengli Petrochemical achieved a profit of 76 billion 329 million yuan, an increase of 74.14% over the same period last year, and realized a net profit of 6 billion 817 million yuan, an increase of 86.64% over the same period last year. Among them, the third quarter net profit of 2 billion 796 million yuan in the single quarter, an increase of 57.96% over the same period last year.


During the reporting period, Hengli petrochemical business developed well. In the first three quarters, the company achieved 986 thousand and 700 tons of civilian polyester filament sales, 552 thousand and 700 tons of polyester chip sales, and 4 million 113 thousand and 600 tons of PTA sales, which is basically the same as last year. The three major businesses of engineering plastics, chemical products and finished products grew rapidly. In the first three quarters, the sales volume of engineering plastics was 323 thousand and 700 tons, 4 million 784 thousand and 100 tons of chemical products and 1 million 707 thousand and 900 tons of refined oil sales, all of which were doubled over the same period last year, and their production and sales rates were all above 99%, providing strong impetus for the rapid growth of the company's performance.


Gradually put into operation, the domestic polyester industry will form a vertically integrated leading enterprise (Hengli, Tong Kun, Rong Sheng Heng Yi, etc.) and the competition pattern of non integrated enterprises. The vertically integrated enterprises will become obvious competitive advantages. The enterprises with only part of the industrial chain will inevitably bear the problems of relative Diseconomy of raw material cost and instability of raw material price fluctuation. The long process enterprises with the industrial chain from top to bottom will have obvious competitive advantages in the short process enterprises, and the future capacity of the industry will gradually be concentrated on several leading enterprises. The small capacity will gradually exit under the influence of the above disadvantages, and the industry pattern will be clear gradually. The future industry discourse right will be controlled by several leading companies, and the overall profitability of the industry will steadily increase. Shang Aihua, a researcher at Zhongtai securities, judged that with the development of private refinery in the future