Petrochemical Monopoly Leading Losses Over 10 Billion, Private Chemical Fiber Giant "Stuffy Sound Big Fortune"!

Since the beginning of 2020, the crude oil has dropped to a historic low by the impact of the global epidemic. We even witnessed the appearance of the negative oil price, which was totally unthinkable a few months ago.

For the petrochemical industry, this is the worst and the best moment.

The so-called worst moment, the petrochemical industry monopoly two barrels of oil must have a deep understanding. A quarterly report in 2020 showed that the leading monopolies in the petrochemical industry - China Petroleum and Sinopec lost billions of dollars respectively.

The best moment is for the downstream refineries. The same is a quarterly report in 2020. The largest and most representative three A private listed companies of the refining and chemical industry turned out very bright performance data:

Hengli petrochemical, the first quarter growth of 323%, net profit of 2 billion 100 million

Rongsheng petrochemical, the first quarter growth of 102%, net profit of 1 billion 200 million

Heng Yi petrochemical, the first quarter growth of 82%, net profit of 810 million

Obviously, the three downstream petrochemical companies have ushered in the best time in the historic low price of oil, and they are making a fortune.

There are many reasons for the loss of two barrels of oil, which we have described before. It is very important that the two giants are too big to be able to avoid the black swans. In the past two days, we have also found that the Internet users have great feelings about the loss of two barrels of oil, but we still have to point out that the loss of two barrels of oil is not all bad. In turn, two barrels of oil will be pushed towards reform.

And what about the three chemical fiber companies that are making big profits? You know, from the perspective of profit growth, the growth rate of these three companies is even higher than that of the protective products companies that are very hot in the epidemic situation. We take the domestic ventilator faucet diving medical treatment to compare, the fish diving medical order is full, and the first quarter performance has increased by only 55%. Therefore, it is not too much to describe them with "boring voice and making money".

Why can these private Petrochemical Industries Co make big profits against the trend?

Some people will say, because they are private enterprises, natural management decisions are flexible; others will say that their cost control is better than that of state-owned enterprises. All of this is true, but neither is it.

You know, in the past few years, the three major private petrochemical companies have adopted the strategy of rapid expansion of liabilities. In the past two years, from kangtaxin to Kangmei pharmaceutical industry, there is no reverse case of the collapse of debt expansion.

The rapid expansion of liabilities is a double-edged sword. If used well, it will be 10 times the scale of enterprises in 35 years.

The three private petrochemical companies are still living well. It is very important to choose the right direction - specializing in the middle and lower reaches of Maori high.

Then, what kind of impact did historic low oil prices bring to private petrochemical industry?

It should be said that the cost reduction is a very important positive, and because of the middle and lower reaches, the private Petrochemical Industries Co are actually consumers of oil - the most direct embodiment of the profit margin.

Taking Hengyi petrochemical as an example, the overall economy was stagnant by the epidemic situation. The first quarter revenue fell by 14%, while net profit still increased by 82%, which relied on the promotion of gross profit. The sales gross profit rate of Hengyi Petrochemical reached 8.69% in the first quarter, a direct doubling of 4.39% over the same period last year.

In contrast, Hengyi Petrochemical's 8.69% gross profit is still a younger brother in the three largest private petrochemical enterprises. The other two are Hengli petrochemical 22% and Rongsheng petrochemical 17.78%. All over the same period last year.

To tell you the truth, the expansion of the three major private petrochemical companies is highly indebted, and the ratio of assets to liabilities to nearly 80% of the red line is indeed reassuring. However, the low oil price caused by this epidemic has brought high margin, which has helped the expansion of the three private petrochemical enterprises before, which is just like adding several times of leverage to buy a continuous trading board. As long as the low oil price lasts longer, the better days of private petrochemical industry will be longer.

Finally, we should get some enlightenment from the performance of private petrochemical enterprises.

Looking at oil prices hitting new lows, we all think that we need to copy crude oil. However, from the perspective of bank oil products penetration, Chinese investors, whether individuals or institutions, lack psychological quality or professional knowledge, and the risk of direct participation in oil game is not small.

The second is that the price of oil is so low, and which companies that consume oil do not smell good? In fact, in addition to two barrels of oil, quite a few companies are actually benefiting from low oil prices in the petrochemical industry chain. In investment, what we often say is that gold is hard to buy certainty; buying such companies that benefit from low oil prices also buy Precious high certainty.