On the evening of October 25, Hengyi Petrochemical announced its third quarter report for 2020. From the first to the third quarter, it achieved revenue of 61.321 billion yuan, net profit attributable to the parent company of 3.057 billion yuan, a year-on-year increase of 38.09%, and earnings per share of 0.83 yuan.
Faced with industry fluctuations, Hengyi continues to maintain good performance. In the first half of the year, Hengyi, as a supplier of raw materials related to epidemic prevention products, the company’s chemical fiber products (including filament, staple fiber, and chips) maintained a strong production and sales situation, with production and sales of 2.97 million tons and 2.47 million tons respectively, a year-on-year increase of 31.42% and 2.47 million tons. 7.86%. Benefiting from a diversified product structure in the first half of the year, and achieving phased results in epidemic prevention work in the second half of the year, Hengyi Petrochemical, as the largest domestic polynylon composite manufacturer, has seized the dividends of industry recovery. With the arrival of the traditional Golden Nine and Silver Ten sales season in the domestic textile industry. At this stage, the daily operating load of China’s looms has climbed to 93.2%, the highest in the past five years. CICC’s research report stated that overseas orders will continue to shift to China in the short term. Orders for shopping festivals such as “Double Eleven” will explode in a concentrated manner. The demand for cold-proof fabrics for autumn and winter clothing and the demand for home textiles will continue to increase. It is expected that rigid demand and stockpiling in the downstream of chemical fiber will Continue the positive trend.
Looking at foreign countries, the recovery of overseas demand in the post-epidemic era has provided sustainability for the prosperity of the textile and apparel industry chain. Affected by the epidemic in overseas countries in the first three quarters, there was a strong willingness to replenish inventories in the fourth quarter, driving exports to further increase. The National Bureau of Statistics released the performance of the national economy in the first three quarters, which showed that in the first three quarters, the total import and export of goods was 23,115.1 billion yuan, a year-on-year increase of 0.7%, and the growth rate turned from negative to positive for the first time this year. In response to the recent situation of “hard to find” containers, Huachuang Securities pointed out that under the background of the domestic epidemic being controlled, my country’s exports have shown strong resilience. The expansion of market demand has led to a continued tightening of supply and demand for shipping capacity in the short term. The ensuing continued demand boost from Black Friday in late November to Christmas in December will further boost the sustainability of overseas demand.
As a leading company in the chemical fiber industry, Hengyi Petrochemical’s chemical fiber sector production capacity reached 6.5 million tons as of the end of June 2020. Driving factors such as the recovery of terminal demand and further improvement in operating rates are expected to increase raw material prices, thereby further Boost the overall profitability of chemical fiber companies.
The recovery of downstream demand has also been confirmed by the inventory data of chemical fiber-related products. Data from Chemical Fiber Network shows that the main chemical fibers polyester filament and polyester staple fiber have been rapidly depleted in the past few weeks. The current polyester filament OY The inventory has dropped to 10 days, and the polyester staple fiber inventory has dropped to an oversold state. In contrast, affected by the epidemic, the prices of polyester staple fiber and filament are at a historical position, and there is greater room for growth.
In addition, with the first phase of the Brunei refining and chemical project put into operation in November 2019, the Brunei refining and chemical project has continued to contribute to the company’s performance as a new project in the past year. The company’s net profit in the first three quarters has reached 96% of last year’s full-year performance. The continued strength of positive terminal feedback will continue to bring certainty to fourth-quarter earnings. </p
