Sinopec Shanghai Petrochemical Company (338) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 was RMB43.53 billion, down 3.12% year-over-year, with net profit attributable to shareholders at RMB27.91 million, reversing a net loss of RMB988.28 million in the prior year period.

• EPS improved from a loss of RMB0.092 to a profit of RMB0.003.

• Operations remained stable amid a challenging macroeconomic and industry environment, with a focus on cost control, efficiency, and transformation.

• Gross margin improved for refined oil products, but declined for chemical products; overall cost of sales decreased by 5.51% year-over-year.

• Production volumes for key products such as ethylene and plastics declined, while gasoline and jet fuel output increased year-over-year.

Financial highlights

• Total profit for the period was RMB37.50 million, compared to a loss of RMB1.21 billion in 1H 2023.

• Net cash from operating activities was RMB341.97 million, compared to a net outflow of RMB226.88 million last year.

• Gearing ratio increased to 41.96% from 38.97% a year ago.

• Total assets rose 8.28% to RMB42.94 billion, while net assets attributable to shareholders slightly decreased by 0.17%.

• Net asset value per share rose 0.99% to RMB2.320.

Outlook and guidance

• The company expects continued macroeconomic pressure and industry headwinds in 2H 2024, with a focus on safety, efficiency, technological transformation, and digitalization.

• Plans include optimizing product mix, increasing production of profitable products, and accelerating carbon fiber and composite material development.

• Emphasis on management reform and talent development to support future growth.