Profit differentiation of petrochemical thermal petrochemical engineering company.

Sinopec refining engineering (02386.hk, hereinafter referred to as "sinopec refining") and huisheng engineering (02236.HK) have reported first-half results. In contrast to the decline in earnings of many chemical producers, the company has seen a corresponding increase in revenue and profit. In the case of the oil refining business, the activity of the coal chemical market has increased the performance of the engineering company's report card.

Coal chemical industry is outstanding.

Sinopec's first-half revenue of about 196.45 billion yuan, up 16.3% year on year; Profit was about 2.214 billion yuan, up 10.8% year on year. Due to the low base of the same period of last year, huisheng project not only increased its revenue by 131.3 per cent to 1.993 billion yuan, but the net profit after tax increased by 1424 per cent to rmb34.19 million.

Behind the rise in net profit is a sharp rise in the coal and chemical businesses of the two companies. Sinopec's refining of coal from coal has jumped 65 per cent to 3.7 billion yuan, surpassing the growth in refining and other petrochemical businesses. Huisheng's coal chemical revenue reached 811.7 billion yuan, a 56% increase from a year earlier, accounting for 41% of first-half revenue.

In the first half of the year, the EPC general contracting of the project, such as the extension of jingbian coal chemical project and shaanxi yulin methanol acetic acid series, has entered the peak period of implementation this year, sinopec said. And wison engineering Cui Yingze senior vice President, said xu mining baoji methanol project, ordos guotai chemical coal to methanol, etc are a few years ago, but just the first half of the billing cycle, the overall income of wison project brought in to help.

Future orders or outbreaks.

"Companies need to complete the coal chemical projects as soon as possible to meet larger and more orders." A fund company's chemical industry researcher told China business news yesterday.

In march, the national development and reform commission (NDRC) handed out 10 coal chemical project "roadstrips" in a lump sum, which is more than the total number of road strips issued in the past, which ignited the market enthusiasm.

Zhongyu Liu Mingjia information analyst told reporters that 10 new project of CLP vote HuoCheng respectively, xinwen mining, guodian hinggan league such as coal gas project, 4 coal olefin project (sinopec, China coal group, gansu tot (shenzhen huijin two each 1) such as coal, 1 LuAn group projects.

The fund's researchers said the presence of 10 roadways meant the NDRC was opening up the sector to a limited extent, with new projects expected to be approved in the future. At the same time, the investment in large-scale coal chemical projects is extremely high, and there are no more than 10 companies in China that can truly undertake such projects. At present, domestic well-known chemical builders include China chemical, petrochina global, sinopec refining, huisheng engineering, etc.

A total of six coal-to-gas projects have been obtained, with a maximum investment of 70 billion yuan and a minimum of 24.1 billion yuan, according to bank of China international statistics. The equipment investment of the coal olefin project is about 25 billion yuan. The total investment in the three coal oil projects that have already existed is nearly 100 billion yuan.

Excess oil refining

By contrast, chemical engineering companies' refining operations are not ideal.

In the first half of the year, sinopec's refining revenue was 5.13 billion yuan, unchanged from a year earlier. This is because a large number of large-scale projects in China are at the end of the stage, while new projects such as deep-processing petroleum processing in kazakhstan's atore refinery are still in the early stages of construction.

Huisheng's revenue from the refining business was down 89.2% to rmb36m from a year earlier. Cui said the drop in revenue was due to the fact that some large refining projects had not yet been built.

From the point of order, wison engineering refining new orders fell 99.6% year-on-year to 23.6 million yuan, and sinopec refinery sign project, published a series of typical new is incredibly don't have a refinery project.

Cui Ying to our reporter, although every ten million ton oil refining project has tens of billions of dollars of investment, but the second half of last year to now, a large new project is not much, only in jieyang, cnooc huizhou oil phase ii, sinopec zhanjiang, etc. This is in contrast to the fact that the coal chemical industry has been brought to the country 10 times in a row.

On the other hand, the current glut in China's refineries may be the reason for the decline in refinery engineering. According to zhongyu information statistics, China's total oil refining capacity reached 654 million tons in 2012, and the total production of 600 million tons was calculated, which eventually translated into more than 300 million tons of refined petroleum products. But in 2012, China's consumption of refined petroleum products was 277 million tons.

"Domestic refinery construction rates have not been very high in the near term. Thus the pattern, if add new refining exacerbate overcapacity, development and reform commission (NDRC), therefore, may on the examination and approval of large oil refining project also hold a cautious attitude, this makes the domestic engineering company has dropped markedly order quantity." The fund company chemical researcher said.