Will The Hengyi Petrochemical Company Build A Downstream Polyester Plant In Brunei After The Refinery Project Is Put Into Operation?

In the northeastern corner of Bandar Seri Begawan, Brunei, a project that has attracted much attention from both Chinese and foreign governments is the first phase of the Hengyi Brunei PMB petrochemical project.

Learned from Hengyi Petrochemical Company, through comprehensive debugging, intermodal transportation and smooth operation, Brunei project realized the whole process of the whole plant in November 3rd, and successfully produced gasoline, diesel, aviation kerosene, PX, benzene and other products, marking the Brunei refining and chemical project commissioning commissioning once. At present, Brunei refining and chemical project is stable in production, and all products are qualified. It has officially entered the commercial operation stage, and is expected to continue to increase its load in a relatively short time.

Hengyi Petrochemical stakeholders told reporters: in the afternoon of November 3rd, the liquefied petroleum gas produced by Brunei project has been shipped, and the first liquefied petroleum gas will be used for export. This marks the successful launch of Brunei's first batch of products. The person also revealed that before December this year, the Brunei project's refined oil sales arrangements have been identified, and the subsequent sales channels for finished oil products have been opened.

It is expected that the load will continue to increase to full production in a relatively short time.

　　 In November 4th, the company's stock price opened 1.66% higher. As of the end of the day, the stock rose by 1.59% at the end of the day, closing at 14.73 yuan / share. It traded 202 million yuan a day, with a total market value of 41 billion 859 million yuan.

　　 Statistics show that Hengyi Petrochemical's core business includes petrochemical and chemical fiber industry, and also engaged in petrochemical business and petrochemical logistics, and other emerging businesses such as digital technology applications, intelligent manufacturing and technology fiber products. The main products include refined benzene, two methacrylic acid (PTA), caprolactam (CPL), polyester (PET) chips, and polyester preoriented yarn (POY).

As of September 30, 2019, the controlling shareholder of the company is Zhejiang Hengyi Group Limited, which is actually controlled by Qiu Chien Ling.

It is reported that the Brunei refinery project, which was fully put into operation, started construction in March 2017, completed the public works in March this year, completed the comprehensive operation of the main equipment in July, and transferred all the devices to the comprehensive linkage test stage in September. In September, 6 of the daily decompression devices produced qualified products.

At present, the project is stable and stable, and all the products are qualified. It has entered the stage of commercial operation. It is expected to increase the load continuously in a short time.

If Hengyi Petrochemical is building a polyester plant downstream of Brunei, it will have a significant industrial chain advantage.

According to the global economic outlook released by the world bank, the next ten years will be the slowest growth of the global economy since 1990s, the ten year. As central banks gradually withdraw from monetary stimulus, GDP growth in developed economies will further slow down to 1.7% in 2020.

In the year when global economic growth slowed down, European leaders lost speed and emerging economies collapsed, Brunei projects in Southeast Asia generally achieved more than 6% growth. In the view of many professional organizations, the economic development of Southeast Asia is facing historic opportunities, and Hengyi Brunei project is expected to benefit substantially.

The industrial upgrading of developed economies has given Southeast Asia the opportunity to undertake industrial transfer. The smooth political situation also gave them the opportunity to seize the opportunity. Under the background of Global trade frictions and tariff levels, the Southeast Asian market has been created, and multinational enterprises have opened more Division factories in Southeast Asia.

It is worth mentioning that according to market analysts, Brunei refining and petrochemical projects have some notable advantages compared with domestic refineries.

According to the reporter's survey, from the global apparel consumption market performance, Southeast Asian manufacturing has gradually become the mainstream. At present, Hengyi Petrochemical has polyester production capacity of 5 million 100 thousand tons / year, polyester short fiber production capacity of 800 thousand tons / year, polyester bottle production capacity of 1 million 500 thousand tons / year, the agency agreed that if Hengyi petrochemical in Brunei construction downstream polyester factory, will have a significant industrial chain advantage.

Tax revenue: the project is located in the ASEAN Free Trade Area. It is exempt from import and export duties and VAT. It will exempt enterprise income tax for 11 years and extend to 24 years.

Business: no need for crude oil import quotas, with natural geographical advantages, close to crude oil producing areas, reducing logistics costs; there is no sales channel for domestic refined oil export quota control; 30% of refined oil is sold directly in Brunei and the rest is sold in Southeast Asia;

Utilities cost: Brunei electricity price and steam price are 0.05 US dollars / degree and 17.5 US dollars / ton respectively, domestic 0.12 US dollars / degree and 29.4 US dollars / ton respectively.

In addition, the listed company can stabilize the profit of refining by locking the reasonable refinery price through the new exchange, while Brunei project belongs to us dollar assets, and hedging with RMB assets is conducive to asset balance.

After Brunei refinery project is put into operation, its performance is expected to be "overturned".

It is worth noting that Hengyi Petrochemical has declined in the first three quarters of this year, and that the Brunei refinery project will be able to further improve the performance of the listed company when it is fully put into operation at this time.

Statistics show that from 2016 to September 30, 2019, the company achieved revenues of 32 billion 419 million yuan, 64 billion 284 million yuan, 84 billion 948 million yuan, and 62 billion 205 million yuan respectively, up 6.93%, 98.29%, 28.79% and -6.37% respectively. The net profit of the same period was 830 million yuan, 1 billion 622 million yuan, 1 billion 962 million yuan and 2 billion 214 million yuan respectively, and the growth rate was 2 billion 214 million, 2 billion 214 million, and -9.28% respectively.

It is not hard to find that the revenue and net profit of the listed company has been increasing continuously in recent years, and its performance is good. However, its net profit growth rate is declining, even in the first three quarters of this year.

This may be improved after Brunei refinery projects are put into operation.

　　 In addition, according to the data disclosed in the semi annual report of 2019, as of the disclosure date of this report, Hengyi Petrochemical Holdings Limited has PTA production capacity of 13 million 500 thousand tons / year, polyester filament production capacity of 5 million 100 thousand tons / year, polyester staple production capacity of 800 thousand tons / year, polyester bottle production capacity of 1 million 500 thousand tons / year, ginseng polyester production capacity accounted for about 18% of the total national polyester production capacity, caprolactam production capacity 400 thousand tons / year, and the market share of 10%.

　　 In terms of capacity, the full-scale production project has 8 million tons / year crude processing capacity, and 1 million 500 thousand tons / year PX, 500 thousand tons / year benzene, nearly 6 million tons / year of diesel and coal oil production capacity, for the listing of product line types and capacity enhancement.

In the future, the company also plans to build Brunei two phase 14 million ton / year refining and chemical project, supporting 2 million tons / year PX and 1 million 500 thousand tons / year ethylene production capacity.

In addition to Brunei refining and chemical projects, the company's Haining new materials and ypeng two phase second projects are still under construction. In addition, Hengyi Petrochemical Company intends to invest 6 billion 730 million yuan to build a new 6 million ton / year PTA project. The group also plans to invest about 22 billion yuan to build 1 million 200 thousand tons of caprolactam polyamide industrial integration project in Qinzhou, Guangxi.

From the current situation, although the net profit growth rate of Hengyi petrochemical company has declined, the overall performance is good. With the Brunei refinery project and other construction projects coming into operation, the performance of the listed company may have room for further improvement.