Hengyi Petrochemical: Brunei's Phase II project has received a preliminary approval letter from the Brunei government

On June 17, Hengyi Petrochemical stated in the investigation that the Brunei Phase II project has obtained a preliminary approval letter from the Brunei government
.
According to reports, the first phase of Brunei’s project load can be increased to 110% or more according to market conditions
.
In the context of short supply, the refined oil market in Southeast Asia will maintain a super-prosperous pattern, and the company's Brunei refinery is expected to continue to benefit
.
Hengyi Petrochemical pointed out that the subsidiary plans to invest in the construction of "caprolactam-polyamide industry integration and supporting projects with an annual output of 1.
2 million tons"
.
The project is constructed in two phases, and the first phase of the project is progressing in an orderly manner
.
At present, Hengyi Petrochemical has a polymerization production capacity of 10.
465 million tons, of which the total production capacity of polyester fibers (filament and staple fibers) has reached 7.
765 million tons, and polyester bottle flakes have reached 2.
7 million tons
.
Overall, the polyester sector is showing obvious signs of improvement month by month
.

In the first quarter, the net profit attributable to the parent company increased by 125.
11% month-on-month

The survey pointed out that the company's main products include gasoline, diesel, aviation kerosene and other refined oil; chemical light oil, liquefied petroleum gas (LPG), paraxylene (PX), benzene, purified terephthalic acid (PTA), caprolactam (CPL) and other petrochemical products; packaging products such as polyester bottle flakes and polyester products such as polyester pre-oriented yarn (POY), polyester drawn yarn (FDY), polyester textured yarn (DTY), polyester staple fiber, polyester (PET) chips, etc.

.

According to reports, as of the disclosure date of the report, the company's crude oil processing design capacity is 8 million tons/year; PTA's production capacity is 19 million tons/year; PIA capacity is 300,000 tons/year; 7.
765 million tons/year, polyester bottle flakes (including RPET) production capacity of 2.
7 million tons; caprolactam (CPL) production capacity of 400,000 tons/year
.

In 2021, the company will achieve revenue of 128.
98 billion yuan, a year-on-year increase of 49.
23%, and a net profit attributable to shareholders of the listed company of 3.
408 billion yuan, a year-on-year increase of 10.
94%.
The company's total assets are 105.
549 billion yuan, an increase of 13.
88% from the beginning of the year; The owner's equity of the company's shareholders was 25.
897 billion yuan, an increase of 7.
87% compared with the beginning of the year; the net assets per share attributable to shareholders of the listed company was 7.
06 yuan; the asset-liability ratio was 68.
79%, which was at a reasonably low level compared with the same industry
.
In the first quarter of 2022, the company achieved revenue of 33.
253 billion yuan, an increase of 2.
99% month-on-month; net profit attributable to the parent was 732 million yuan, a month-on-month increase of 125.
11%
.

The refined oil market in Southeast Asia may maintain a super-prosperous pattern

When introducing the refined oil market in Southeast Asia, Hengyi Petrochemical mentioned that in terms of demand, since 2022, as Indonesia, Malaysia, Singapore and other Southeast Asian countries have successively released epidemic control measures and actively resumed work and production, market demand has grown rapidly
.
In addition, after the recovery of the Southeast Asian supply chain, some overseas orders have returned, and the demand for refined oil products in Southeast Asia has recovered strongly under the resonance of domestic and foreign demand
.

On the supply side, there are dual constraints in the market, resulting in a tight supply situation in the Southeast Asian refined oil market in the medium and long term
.

1) Due to the early construction of some refineries in Southeast Asia, outdated technology, poor management, heavy government subsidy burden and the impact of the new crown epidemic, according to Platts data, Southeast Asian refineries have withdrawn production capacity of 15.
5 million tons in the past three years.
The supply of new capacity in Southeast Asia is insufficient
.
From a global perspective, according to IEA data, the number of refineries announced to be shut down in 2020-2026 reached 3.
6 million barrels, and refinery capacity in Southeast Asia and around the world was shrinking
.

2) Under the influence of geopolitics, the export of refined oil products from Russia has been hindered, and the European and American markets have turned to the Middle East to purchase refined oil products, which has squeezed the refined oil resources originally supplied to the Asia-Pacific market.
The supply of refined oil in Southeast Asia is tight
.
In addition, the operating rates of refineries in Russia, the United States, the European Union and other regions are currently low, and it is expected that the global refined oil gap caused by geopolitics will be difficult to alleviate in the medium and long term
.
In the context of short supply, the refined oil market in Southeast Asia will maintain a super-prosperous pattern, and the company's Brunei refinery is expected to continue to benefit
.

As of June 16, the gasoline cracking spread in the Singapore market was about 35.
33 US dollars per barrel, and the diesel cracking spread was about 69 US dollars per barrel.
Since 2021, the gasoline and diesel cracking spreads have recovered and improved.
With the continuous expansion of the refined oil cracking spread, the article The benefits of Lai Phase I are expected to continue to improve
.
The company's Brunei Phase I project load can be increased to 110% or more according to market conditions.
In 2022, the company will do a good job in the production and operation of the refinery to the greatest extent, so as to fully benefit from the continued strong market conditions in Southeast Asia
.

The Brunei Phase II project has received the preliminary approval letter from the Brunei government

Hengyi Petrochemical stated that part of the crude oil required for the company's Brunei project comes from Brunei, and the rest is purchased from crude oil countries such as the Middle East and North Africa
.

The meeting introduced the competitive advantages of Brunei's Phase I project, including: (1) The demand for refined oil products in Southeast Asia is strong.
With the recovery of downstream demand, the price difference of the company's related products continues to expand, and Brunei's business environment has been greatly improved
.
(2) China and China are highly supported and enjoy long-term tax incentives and other policy advantages
.
(3) The installation is stable, the high-load operation is carried out, and the advantages of operation facilitation are prominent
.
(4) Significant technical advantages and continuous improvement of unit cost
.

In addition, the Brunei Phase II project has obtained a preliminary approval letter from the Brunei government
.
According to the project plan, the construction of the embankment filling and other work is being carried out in an orderly manner
.
After the Brunei Phase II project is completed and put into operation, an "olefin-polyolefin" industrial chain will be added, which is conducive to improving the intensification, scale and integration level of Brunei's refining and chemical integration projects; it is beneficial to the company's products, equipment and public works The integrated, globalized and balanced collaborative operation of the company enhances the company's sustainable profitability and anti-risk capabilities
.

The subsidiary plans to invest in the construction of "an annual output of 1.
2 million tons of caprolactam-polyamide industry integration and supporting projects"

Hengyi Petrochemical said that the company's current polymerization production capacity is 10.
465 million tons, of which the total production capacity of polyester fibers (filament and staple fibers) reaches 7.
765 million tons, and polyester bottle flakes are 2.
7 million tons
.
The scale is at the forefront of the industry, and polyester fibers include filaments, staple fibers, and chips, with diversified varieties
.
The company holds a long-term optimistic attitude towards the polyester industry for the following reasons:

(1) From the perspective of supply, the new polyester production capacity in 2021 and in the future will continue to be characterized by the expansion of leading enterprises.
The backward polyester factories with old installations lack the ability to innovate in technology, and will gradually withdraw from industry competition and have backward production capacity.
Clearance will be accelerated, the company's industrial chain access threshold will be further increased, the market concentration of the polyester industry will be further optimized, the industry competition order will continue to improve, and the development environment will become more benign
.

(2) From the perspective of demand, as the domestic epidemic prevention and control situation continues to improve, the downstream demand for textiles and clothing continues to pick up, and with the continuous pull of domestic real estate, automobile, tourism and other domestic demand and export demand, the demand for polyester industry will continue to rise.
Continue to maintain healthy and stable growth
.

Overall, the polyester sector is showing obvious signs of improvement month by month
.
As one of the leading enterprises, the company will accelerate the expansion of downstream chemical fiber business through various methods, and will take the lead in enjoying the profit improvement brought by the good prosperity of the industry
.

At the bottle flake business level, under the background of product upgrades, the demand for PET bottle flakes continues to increase
.
In 2021, the apparent consumption of global bottle-grade PET is expected to be around 32.
08 million/ton, with a year-on-year growth rate of over 12%
.
Among them, domestic demand has grown rapidly, and the apparent consumption of bottle-grade PET in the whole year reached 7.
05 million tons, an increase of about 24% year-on-year
.
On the downstream demand side, the traditional soft drink market has performed well.
At the same time, the epidemic has also promoted the rapid development of bottle flakes in the field of fresh food e-commerce, household disinfection and other daily chemical fields, as well as new application fields such as environmentally friendly flooring and optical films, and the demand for bottle flakes continues.
growth
.

Hengyi Petrochemical pointed out that Guangxi Hengyi New Materials Co.
, Ltd.
, a subsidiary of the company, plans to invest in the construction of "an annual output of 1.
2 million tons of caprolactam-polyamide industry integration and supporting projects"
.
The project is constructed in two phases.
The products involve high-end nylon fibers, engineering plastics and films, covering a variety of application fields.
Currently, the first phase of the project is progressing in an orderly manner
.