Hengli Petrochemical Co Ltd Financial Update

Hengli Petrochemical Co Ltd, a prominent player in the chemical industry, has recently announced its financial performance for the first half of 2025. The company, headquartered in Dalian, China, specializes in the production of chemical fibers, including polyester filament and chips, catering to both consumer and industrial markets globally.

Financial Performance

For the first half of 2025, Hengli Petrochemical reported a net profit attributable to shareholders of approximately 30.5 billion CNY. This represents a decrease of 24.09% compared to the same period in the previous year. The decline in profitability is attributed to several factors:

  • Macroeconomic Demand: The overall demand for petrochemical products in China has continued to show a weak recovery trend, particularly in the phenol and oil product industry chains, which have seen a significant downturn compared to the same period last year. However, the ethylene, PTA, and downstream polyester new materials industry chains have maintained relatively stable business conditions and profitability.

  • Raw Material Costs: The company faced challenges due to volatile international oil prices in the second quarter, driven by global geopolitical events and tariff issues. This volatility impacted the stability of production and operations, as well as the management of raw material costs and inventory.

  • Operational Adjustments: Planned maintenance of ethylene facilities in the second quarter led to a reduction in the load rate of ethylene equipment, affecting the production volume and unit cost of ethylene products.

Despite these challenges, Hengli Petrochemical has continued to strengthen its operational optimization, flexible management, and risk control, maintaining its leading position in the industry.

Market Context

The broader chemical sector has seen positive developments, with the chemical ETF (159870) experiencing significant net purchases, exceeding 1.2 billion shares. This trend is part of a broader market shift, with the chemical sector benefiting from favorable conditions such as the rise of humanoid robots and the increasing demand for high-performance polymers like PEEK (Polyether Ether Ketone). These materials are gaining traction in high-end applications, potentially replacing metals in certain industries.

Stock Performance

As of August 18, 2025, Hengli Petrochemical’s stock closed at 15.01 CNY on the Shanghai Stock Exchange. The company’s market capitalization stands at approximately 105.3 billion CNY, with a price-to-earnings ratio of 14.99. The stock has experienced fluctuations within the year, with a 52-week high of 17.23 CNY and a low of 12.13 CNY.

Conclusion

Hengli Petrochemical’s financial performance reflects the challenges faced by the petrochemical industry amid fluctuating demand and raw material costs. However, the company’s strategic focus on operational efficiency and market adaptation positions it to navigate these challenges effectively. The broader chemical sector’s positive outlook, driven by technological advancements and market dynamics, may offer opportunities for growth and recovery in the coming periods.