Drink With &Nbsp; Rongsheng Petrochemical Hengyi Petrochemical Hit The Market.

The good play finally opened the curtain.

The relationship between Rongsheng petrochemical and Hengyi Petrochemical has been cut and confused. It is the biggest competitor. But the two companies' main profits come from the two subsidiary companies established by the joint venture, namely Zhejiang Yisheng and Dalian Yisheng investment.

In 2009, the two subsidiaries provided 87.89% net profit for two listed companies, including 600 million yuan net profit for Rongsheng Petrochemical Company, accounting for 76.62% of its current net profit, and a net profit of 627 million yuan net profit for Hengyi Petrochemical Company, accounting for 102.28% of its current net profit.

Prospectus shows that Rongsheng Petrochemical was established by Rongsheng chemical fiber group, located in Xiaoshan, Hangzhou. The company is mainly engaged in the production and sale of PTA and polyester fiber related products.

The controlling shareholder is Rongsheng holdings, and the actual controller is Li Yongrong.

Qiu Jianlin, another Petrochemical bigwigs from Xiaoshan, Zhejiang, is the actual controller of Zhejiang Hengyi Formosa Petrochemical Co, the company's biggest competitor and long-term partner.

In February this year, Hengyi Petrochemical intends to shell *ST Guanghua (000703), *ST Guanghua's assets, liabilities and personnel will be divestied and injected into all assets of Hengyi petrochemical company. At present, the restructuring plan is still under the examination of the SFC.

However, the net profits of the two listed companies are mainly derived from their joint venture subsidiaries, Zhejiang Yisheng and Dalian Yisheng investment. Rongsheng petrochemical and Hengyi Petrochemical have both controlled and restricted each other.

Prospectus shows that Zhejiang Yisheng was founded in March 2003, Hengyi Petrochemical directly holds 37.07% of its shares, and indirectly holds 13.93% of its shares through wholly-owned subsidiary Jia Jia international, holding 51% of its total shares. Rongsheng Petrochemical directly owns 35.07% of its shares and indirectly holds 13.93% of its shares through wholly owned subsidiary Hongkong Shenghui.

Dalian Yisheng investment was founded in December 14, 2005, Hengyi Petrochemical has a 49% stake, and Rongsheng Petrochemical owns 51% of its shares.

Yisheng investment, as a shareholding enterprise, owns 80% of yishanda, and the company does not engage in business.

And Yanda was founded in April 29, 2006, with shareholders holding 80% of Dalian's Yisheng investment and 20% of Refco Group Ltd.

In June 2010, in order to solve the mutual contention between them, Rongsheng Petrochemical reduced its total shareholding to Zhejiang Yisheng to 30%, and the total shareholding ratio of Yisheng investment rose to 70%.

Correspondingly, Hengyi Petrochemical owns 70% of Zhejiang Yisheng and 30% of Yisheng investment.

Nearly half of profits are investment income.

Prospectus shows that in the first half of 2009 and the first half of 2010, nearly half of Rongsheng Petrochemical's profit came from investment income. In 2008, the proportion of investment income in the company's net profit was as high as 82%.

In fact, in addition to the impact of the financial crisis in 2008, the profitability of Rongsheng Petrochemical is still commended.

From 2007 to the first half of this year, the net profit of Rongsheng Petrochemical was 271 million 273 thousand and 300 yuan, 91 million 156 thousand yuan, 782 million 601 thousand yuan and 575 million 239 thousand and 500 yuan respectively.

However, the profit of the company comes from the gross profit generated by the sales of PTA, PET chips and polyester filament, and the other part is the investment income of the company to Yisheng, Zhejiang. Zhejiang Yisheng has a significant impact on the profitability of the company.

In addition to 2007, investment income accounted for a relatively low percentage of net profit in the current period, which was only 12.73%.

In the first half of 2009 and the first half of this year, the investment income outside the scope of the company's consolidated statements was 362 million 668 thousand and 700 yuan and 257 million 397 thousand and 400 yuan respectively, accounting for 46.34% and 44.75% respectively.

In 2008, more than 82.05% of Rongsheng Petrochemical's net profit came from investment income, and the current investment income was 74 million 797 thousand and 200 yuan.

Among them, in the first half of 2009 and the first half of this year, the proportion of investment income from Zhejiang Yisheng accounted for 46.12% of the company's net profit (under the assumption that the income tax rate was unified by 15%, and the tax preferences of domestic equipment exemption) were deducted. The investment income of the company to Yisheng of Zhejiang accounted for 43.30% of the net profit of the parent company and 44.39%.

According to the company, Zhejiang Yisheng is actually the raw material PTA production base of Rongsheng petrochemical and Hengyi Petrochemical Company (it can be regarded as a complete and continuous industrial chain for the production of polyester and polyester filament used in polyester production in Zhejiang Yisheng PTA).

However, because PTA raw material production is invested by shares and operated separately in the form of company system, the profit of the whole industry chain is divided into two parts, one of which is retained in Yisheng, Zhejiang, which is embodied in the form of investment income, and the other part is retained inside the company, which is embodied in the form of gross profit in main business.

In addition, the combination of Yisheng investment and Yanda's impact on the company's assets and liabilities has increased year by year, and its position in the company has increased significantly.

The owner's equity of Yisheng investment increased from 313 million 999 thousand and 500 yuan to 2 billion 20 million 434 thousand and 400 yuan, which accounted for 24.04% of the company's owner's equity and 66.57%.

After its operation in April 2009, Yanda Shanda PTA project achieved a net profit of 564 million 976 thousand and 500 yuan and 589 million 27 thousand and 700 yuan in 1~6 and 2009 in 2010. It has become an important source of profits for the company and has a significant impact on the company's operating results.

Similarly, Zhejiang Yisheng and Yisheng investment is the main source of profits for Hengyi petrochemical company.

According to the restructuring plan announced by *ST Guanghua, from 2007 to 2009, Hengyi Petrochemical realized net profit of 207 million yuan, -8811.71 million yuan, and 613 million yuan respectively, including investment income of 47 million 220 thousand yuan, 19 million 890 thousand yuan and 217 million yuan, accounting for about 30%.

In 2009, Zhejiang Yisheng realized a net profit of 757 million yuan, and Yisheng investment achieved a net profit of 470 million yuan. The two PAT enterprises realized a total profit of 1 billion 227 million yuan. In the 2009 year, Rongsheng Petrochemical realized a net profit of 783 million yuan, and Hengyi petrochemical company achieved a net profit of 613 million yuan. The two companies realized a net profit of 1 billion 396 million yuan, that is, two PAT enterprises provided 87.89% net profit for two listed companies, of which 600 million yuan net profit for Rongsheng Petrochemical Company, accounting for its current net profit 76.62%, and a net profit of net profit for Hengyi Petrochemical Company, accounting for the net profit of the current period.

Zhejiang Yisheng and Yisheng investment is the main source of profits for Rongsheng petrochemical company. It is also the main source of profit for Hengyi petrochemical company. Today, the other side has launched a IPO sprint, and the result is August 20th.