Sinopec Shanghai Petrochemical Company Limited

In 1H 2025, turnover was CNY39.5 billion, down 9.17% YoY. Profit before tax was minus CNY583 million versus CNY12.43 million in the prior-year period, net profit attributable to the parent was minus CNY449 million versus CNY2,845,000, and EPS was minus CNY0.04. As of June 30, 2025, total assets were CNY41,896 million, total liabilities CNY17,502 million, equity attributable to parent shareholders CNY24,293 million, and gearing ratio 41.77%, up from 39.71% at year-end 2024. Operating cash inflow was CNY768 million, investing cash inflow was CNY734 million, and financing cash outflow was CNY1,281 million. Crude oil processed was 6,324,900 tons, down 4.93% YoY, and main product sales were 5,578,500 tons, down 3.68% YoY. Average selling prices fell 10.09% for oil refining products and 10.84% for chemical products. For forward guidance, management said 3Q is currently operating safely and smoothly, there is no annual maintenance plan in 3Q, and it is trying to achieve no loss in 3Q. For capex, the original full-year target of CNY2.8 billion may be revised down to around CNY2 billion or a little less; 1H capex was CNY408 million.

Chairman Xiaojun Guo framed the period as one of severe domestic and global uncertainty, but emphasized that the company kept production, safety, and project construction moving in an orderly way. He said Shanghai Petrochemical is using this cycle to push high-quality development, accelerate equipment renewal and technological upgrading, and build a longer-term transition toward high-end, intelligent, and green operations. His tone was constructive and policy-aware, especially on anti-involution, backward-capacity elimination, and the company’s large upgrade program.

CFO Jun Du said the weak first half reflected a difficult market: crude prices swung widely, product prices fell, and the industry remained highly competitive. He cited turnover of CNY39.5 billion, PBT of minus CNY583 million, net income attributable to the parent of minus CNY449 million, and EPS of minus CNY0.04. He also highlighted CNY407 million of inventory impairment in 1H, no crude inventory impairment, operating cash inflow of CNY768 million, investing cash inflow of CNY734 million, financing cash outflow of CNY1,281 million, and gearing of 41.77%. He said crude procurement remained mainly through China International United Petroleum & Chemicals and that the company generally uses only small hedges, relying more on low-inventory, fast-in/fast-out operations.

Analysts focused on possible government rules to eliminate backward petrochemical capacity, the cause of inventory losses, capex slippage, crude procurement costs, and asset ages that could trigger more upgrades or shutdowns. Management said the backward-capacity policy is not official yet, but said the overall direction favors orderly capacity adjustment and supports Shanghai Petrochemical’s ongoing large-scale renewal program. On inventory losses, management pointed to the decline in crude and product prices, maintenance-related lower processing volume, and higher procurement/transport costs in 2Q; it said no crude inventory impairment was booked. On capex, management said the full-year plan may be cut from CNY2.8 billion to about CNY2 billion or slightly less because much of 1H was approval work. It also said current 3Q operations are safe and it is striving for no loss in the quarter.