Shanghai Petrochemical (600688): Increasing crude oil processing costs, overlapping petrochemical product prices, the company’s 19H1 profit shifted significantly

Shanghai Petrochemical (600688): Increasing crude oil processing costs, overlapping petrochemical product prices, the company’s 19H1 profit shifted significantly

Key points of investment: The company’s net profit attributable to its parent in 19H1 is extended every six months.

7%, lower than our expectations.

19H1 company operating income fell 0.

4%, operating costs increased by 7.

26%, resulting in a substantial increase in net profit attributable to mothers11.

3.7 billion, 67 in the previous decade.

7%, of which 19Q1 is the net profit of the mother 6.

11 billion, down 65 previously.

5%, 19Q2 returns to net profit of the mother 5.

2.7 billion, 70 from the previous decade.


The company’s 19H1 net operating cash flow2.

46 billion, 94 from the previous decade.

18%, mainly because the profit before tax can be repeated 69.


Profits of petroleum products and intermediate petrochemical products declined significantly.

In terms of different sections, the operating income of 19H1 synthetic fiber, resins and plastics, intermediate petrochemical products, petroleum products and petrochemical products increased by 6 respectively.

29%, down 1.

79%, a decrease of 15.

80%, up 0.

5% and up 5.

twenty four%.

19H1 company gross profit margin 16.

0%, more than ten years.

98 single, the gross profit margin of intermediate petrochemical products decreased by 10.

85 totals to 16.

34%, mainly due to the decline in the price of chemical products downstream of ethylene; the gross profit margin of petroleum products fell 8.

31 total to 24.

53%, 19H1 company steam, diesel and coal prices were -1 respectively.

42%, -1.

26% and +1.

37%, the growth rate of gross profit margin is mainly due to the increase in crude oil processing costs.

Affected by the exchange rate, the cost of crude oil and freight, the cost of processing crude oil rises every year.

19H1 company operating costs 436.

6.5 billion, an annual increase of 7.

26%, mainly because the company’s average unit cost of processing crude oil (self-operated portion) was RMB 3,309.

34 yuan / ton, an increase of 7 in ten years.

88%.Firstly, it is affected by the exchange rate and the extent to which crude oil is traded and freight is exceeded. Secondly, the company produced 168 gasoline in 19H1.

82 Initially, it is increased by 3 every year.

51%; diesel 185.

12 at least, 4 per year.

94%; aviation kerosene 92.

51 Initially, the annual increase is 25.

10%, in order to increase the production of gasoline and jet coal, reduce the output of asphalt, appropriately increase the proportion of light oil processing, unit processing costs increased and crude oil processing costs increased by 16.

8.3 billion.

The decrease in Shanghai Secco’s performance resulted in a reduction in investment income.

Company 19H1 realized investment income4.

9.2 billion, 18 years ago.

24%, of which 3.

8 billion comes from Shanghai Secco, an associate company, accounting for 33% of net profit attributable to the parent.


Shanghai Secco has 8 main production units, with a single-line capacity of 109 ethylene resin units, and 7 units including 60 copolymer polyethylene and 25 polypropylene.

19H1 Shanghai Secco 武汉夜生活网 achieved operating income of 145.

73 billion, the previous decade 7.

67%, net profit 18.

$ 9.9 billion, at least 28 per year.

82%, the performance gradually due to the decline in market demand for downstream products.

Investment suggestion: In the face of downward economic pressure, including private refining and petrochemical projects to put into production or intensify competition, we cut down on 2019
EPS forecasts for 2021 are zero.

23 yuan, 0.

24 yuan and 0.

30 yuan (0 before adjustment.

51 yuan and 0.

47 yuan and 0.

52 yuan), corresponding PE is 19X, 18X and 15X.

Termination of 19H1 company monetary funds 129.

700 million, an increase of 26 over the beginning of the year.

59%, asset-liability ratio 34.

24%, the overall account is rich in cash, maintaining low leverage, the company has begun to adjust the product structure to respond to industry competition, while relying on the advantages of Sinopec’s sales channels, the business is more stable than the private enterprises under the replacement situation, maintaining the “overweight” rating.

Risk Warning: Crude oil will fall sharply; competition in the refined oil market will increase; chemical product prices will fall sharply