Sinopec Shanghai Petrochemical Company (338) H1 2026 earnings summary

Executive summary

• Achieved a turnaround from loss to profit in 1H2026, with net profit attributable to shareholders of RMB298 million, compared to a loss of RMB449 million in 1H2025, driven by cost control, efficiency measures, and higher product prices amid volatile oil markets.

• Revenue decreased 1.36% year-over-year to RMB38.96 billion, mainly due to lower sales volumes from major facility overhauls, but net sales of chemical products rose 22.25%.

• Gross profit reached RMB367 million, reversing a gross loss in the prior year, as cost of sales fell 2.68% and product prices increased.

• Major projects in technological transformation, capacity expansion, and digitalization advanced, including the commissioning of Phase I of the carbon fiber project.

Financial highlights

• Operating income: RMB38.99 billion, down 1.34% year-over-year.

• Net profit attributable to shareholders: RMB300 million (CAS), compared to a loss of RMB462 million in 1H2025.

• Basic and diluted EPS: RMB0.028, compared to a loss per share of RMB0.044 in 1H2025.

• Gross margin improved to 0.94% from -1.62% year-over-year.

• Net cash outflow from operating activities: RMB841 million, versus an inflow of RMB776 million in 1H2025.

Outlook and guidance

• Sector faces compressed profitability, persistent price volatility, and overcapacity risks; high 1H profits were mainly windfall gains from geopolitical-driven price spikes.

• Second half expected to see limited seasonal recovery, with continued pressure on cash flow due to major renovations and narrowing product spreads.

• Focus areas: safety, environmental compliance, quality and efficiency enhancement, product mix optimization, and accelerated transformation into high-end materials.