Sinopec Shanghai Petrochemical Company (338) H1 2026 earnings summary

Executive summary

• Achieved a turnaround from loss to profit in H1 2026, with net profit attributable to shareholders of RMB300 million (CAS), compared to a loss of RMB462 million in H1 2025, driven by cost control, efficiency measures, and higher product prices amid volatile oil markets.

• Revenue slightly decreased by 1.34% year-over-year to RMB38.99 billion, mainly due to lower sales volumes from major facility overhauls, but net sales of chemical products rose 22.25%.

• Gross profit margin improved, reversing a gross loss in the prior year, as cost control measures were effective despite volatile oil prices and industry headwinds.

• Major projects in technological transformation, carbon fiber, cogeneration, and digitalization advanced as planned, including 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 H1 2025.

• Basic and diluted EPS: RMB0.028 per share, versus a loss of RMB0.044 per share last year.

• Net cash outflow from operating activities: RMB841 million, compared to an inflow of RMB776 million in H1 2025.

• Gross profit margin for petroleum products increased by 3.03 percentage points year-over-year.

Outlook and guidance

• Sector profitability expected to remain compressed in H2 2026 due to oversupply, persistent price volatility, and narrowing product spreads; high H1 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.

• Company will focus on safety, efficiency, product mix optimization, environmental compliance, and advancing major projects and transformation into high-end materials.

• Continued emphasis on green, low-carbon transformation and digital-intelligent upgrades.