[中报]恒力石化:恒力石化2021年半年度报告（英文删节版）
原标题:恒力石化:恒力石化2021年半年度报告（英文删节版） Discussion and Analysis from the Management Chapter I Chapter I Chapter III Chapter IV Chapter V Chapter VI Chapter VII Chapter VIII Chapter IX Chapter X Definition Main Financial Indicators Corporate Governance Environmental and Social Responsibility Important Items Share Changes and Shareholders Relevant Information of Preferred Shares Relevant Information of Bonds Financial Report Contents I. Definition In this report, the terms listed below are defined as follows, unless the context otherwise implies: Definition of Frequently-Used Terms Reporting Period Refers to From 1 January 2021 to 30 June 2021 Company, the Company, or Hengli Petrochemical Refers to Hengli Petrochemical Co., Ltd. CSRC Refers to China Securities Regulatory Commission SSE Refers to Shanghai Stock Exchange Hengli Group Refers to Hengli Group Co., Ltd., controlling shareholder of the listed company Hailaide Refers to Hailaide International Investment Ltd., person acting-in- concert with controlling shareholder of the listed companyacting-in- concert with controlling shareholder of the listed company Tak Shing Li Refers to Tak Shing Li International Holdings Ltd., person acting-in- concert with controlling shareholder of the listed company Hegao Investment Refers to Jiangsu Hegao Investment Co., Ltd., person acting-in-concert with controlling shareholder of the listed company Hengneng Investment Refers to Hengneng Investment (Dalian) Co., Ltd., person acting-in- concert with controlling shareholder of the listed company Hengfeng Investment Refers to Hengfeng Investment (Dalian) Co., Ltd., person acting-in- concert with controlling shareholder of the listed company Hengli Chemical Fiber Refers to Jiangsu Hengli Chemical Fiber Co., Ltd., subsidiary to the listed company Susheng Thermal Power Refers to JSuzhou Susheng Thermal Power Co., Ltd., subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company Hengke Advanced Materials Refers to Jiangsu Hengke Advanced Materials Co. Ltd, subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company Deli Chemical Fiber Refers to Jiangsu Hengke Advanced Materials Co. Ltd, subsidiary to the Hengli Chemical Fiber, sub-subsidiary to the listed company Kanghui New Material Refers to Formerly known as Yingkou Kanghui Petrochemical Co., Ltd., subsidiary to the listed company, now renamed as Kanghui New Material Technology Co., Ltd. Hengli Petrochemical Chemical Refers to Hengli Petrochemical (Dalian) Chemical Co., Ltd., subsidiary to the listed company 01 Hengli Investment Refers to Hengli Investment (Dalian) Co., Ltd., subsidiary to the listed company Hengli Petrochemical (Dalian) Refers to Hengli Petrochemical (Dalian) Co., Ltd., subsidiary to the Hengli Investment, sub-subsidiary to the listed company Hengli Petrochemical (Huizhou) Refers to Hengli Petrochemical (Huizhou) Co., Ltd., subsidiary to the Hengli Investment, sub-subsidiary to the listed company Hengli Petrochemical Refining Refers to Hengli Petrochemical (Dalian) Refining Co., Ltd., subsidiary to the listed company Crude Oil Refers to Crude oil is petroleum directly exploited from an oil well without being processed and is a dark-brown or dark-green viscous liquid or semisolid flammable substance that is composed of various hydrocarbons. Aromatic Hydrocarbon Refers to A hydrocarbon containing a benzene ring structure in its molecule. Aromatic hydrocarbons, mainly including benzene, methylbenzene, xylene, etc., are one of the most important basic raw materials for the production of petrochemicals. Ethylene Refers to A compound consisting of two carbon atoms and four hydrogen atoms. It is the basic chemical raw material of synthetic fiber, synthetic rubber, synthetic plastic (polyethylene and polyvinyl chloride), synthetic ethanol (alcohol), and also used in manufacturing chloroethylene, styrene, ethylene oxide, acetic acid, acetaldehyde, ethanol, and explosives, etc. Polyethylene Refers to A thermoplastic resin produced by polymerization of ethylene. Polyethylene is odorless and non-toxic and feels like wax, has excellent low-temperature resistance, good chemical stability, and resistance to erosion of most acid and alkali. Polypropylene (PP) Refers to A semi-crystalline synthetic resin material, with strong acid and alkali resistance, excellent electrical insulation capacity, harder character, and higher melting point than PE. Styrene Refers to An organic compound which is usually a colorless but aromatic liquid, mainly used in the production of plastic, resin, and rubber. Butadiene Refers to An organic compound which is a colorless gas with a distinctive odor is the main raw material in the production of synthetic rubber. Paraxylene (PX) Refers to A kind of aromatic hydrocarbon, which is a colorless and transparent liquid, and is a raw material in the production of purified terephthalic acid (PTA), used for manufacturing plastic, polyester fiber, and film. Purified Terephthalic Acid (PTA) Refers to A white crystal or powder at room temperature, non-toxic and flammable, which will burn as soon as catching fire if mixing with air to a certain degree. Ethylene Glycol (MEG or EG) Refers to A colorless, odorless, sweet, viscous liquid, mainly used in the production of polyester fiber, antifreeze, unsaturated polyester resin, lubricant, plasticizer, non-ionic surfactant, and explosive. Acetic Acid Refers to An organic compound which is a colorless liquid with a pungent odor and is the raw material for the production of rayon, filmstrip, aspirin, etc. Polyester, Polyester Chip or PET Refers to Polyethylene Terephthalate, or Polyester or PET, is a fiber-forming polymer made from PTA and MEG through interesterification or esterification and condensation polymerization. Fiber-grade polyester chips are used for producing polyester staple fibers and polyester filament yarn, while film-grade chips are used for producing all categories of film products. PBAT Refers to Poly (butylene adipate-co-terephthalate), or PBAT, is a petrochemical-based biodegradable plastic with sound biodegradability and is an active material in biodegradable plastic research with broad market application. 02 PBS Refers to Polybutanediol succinate, or PBS, is polymerized from succinate acid and Butane-1,4-diol (BDO), with sound thermal performance and mechanical processing performance. It is a typical fully biodegradable material easy to be decomposed and metabolized by a variety of natural microorganisms or enzymes in animals and plants and finally decomposed into carbon dioxide and water. Polyester Fiber Refers to A synthetic fiber made of polyester formed by polycondensation of organic diacid and dihydric alcohol by spinning. The industrialized massively produced polyester fiber is made from PET and is known as dacron in China. It is the top major variety of synthetic fiber at present. Polybutylene Terephthalate (PBT) Refers to It is a condensation polymer of para toluic acid and Butane-1,4-diol, which can be prepared by the methods of transesterification or direct esterification through polycondensation. PBT and PET together are known as thermoplastic polyesters. Biaxially-Oriented Polyethylene Terephthalate (BOPET) Refers to BOPET has the characteristics of high strength, good rigidity, transparency, high gloss, etc., with excellent wear resistance, folding resistance, pinhole resistance and tear resistance, minimal thermal shrinkage, and sound antistatic property. Denier (D) Refers to 9,000-meter fiber weighs 1 gram and is called 1 denier (D). Polyester Filament Yarn (PFY) Refers to Balls wound by filament yarn of more than 1 km in length. PFY for Civil Use, Textile Yarn Refers to PFY used for clothing and household textile. PFY for Industrial Use, Industrial Yarn Refers to Polyester macrofiber in large denier with strong strength and high modulus for industrial use. Differential Fiber Refers to A new fiber variety that is differentiated from normal varieties with evident breakthroughs on techniques or performance, or with certain special properties, mainly used for improving wearability, through chemical modification or physical deformation. POY Refers to Pre-oriented yarn, or partially oriented yarn (POY), is partially drawn PFY obtained by high-speed spinning with orientation between the unoriented yarn and the full drawn yarn. DTY Refers to Draw textured yarn (DTY) is made of POY through drawing and false twist texturing, usually with certain elasticity and contractibility. FDY Refers to Full Drawn Yarn (FDY), is a synthetic fiber filament further prepared by the spinning and drawing process. The fiber has been fully drawn and can be directly used for textile processing. 03 II. Main Accounting Data and Financial Indicators of the Company Unit: 10,000 yuan Currency: CNY Main Accounting Data The Current Reporting Period (Jan.-Jun.) The Same Period of the Previous Year Increase/Decrease over the Same Period of the Previous Year (%) Operating Income 10,457,447.80 6,735,793.52 55.25 Net Profits Attributable to Shareholders of the Listed Company 864,220.71 551,686.00 56.65 Net Profits Attributable to Shareholders of the Listed Company after Deducting Non-recurring Gains and Losses 826,613.64 549,468.83 50.44 Net Cash Flow from Operating Activities 1,618,009.23 1,819,232.26 -11.06 The End of Current Reporting Period The End of Previous Year Increase/Decrease at the End of Current Reporting Period Compared to the End of Previous Year (%) Net Assets Attributable to Shareholders of the Listed Company 5,013,805.06 4,690,507.69 6.89 Total Assets 20,094,587.59 19,102,872.66 5.19 Main Financial Indicators The Current Reporting Period (Jan.-Jun.) The Same Period of the Previous Yea Increase/Decrease over the Same Period of the Previous Year (%) Basic EPS (Yuan/Share) 1.23 0.79 55.70 Diluted EPS (Yuan/Share) 1.23 0.79 55.70 Basic EPS after Deducting Non-Recurring Gains and Losses (Yuan/Share) 1.18 0.78 51.28 ROEWA (%) 17.17 14.26 Up 2.91 Percentage Points ROEWA after Deducting Non-Recurring Gains and Losses (%) 16.43 14.20 Up 2.23 Percentage Points Notes on Main Accounting Data and Financial Indicators of the Company The increase in operating income during the reporting period is mainly attributed to the fact that the 1.5 million-tonne ethylene project and the 2*2.5 million-tonne PTA project of the Hengli Petrochemical Chemical reached the target output in the middle and latter half of the year 2020. The increase in net profits and EPS during the reporting period is mainly attributed to the 1.5 million- tonne ethylene project and the upward trend of the industry cycle. 04 Items and Amount of Non-recurring Gains and Losses Items and Amount of Non-recurring Gains and Losses Unit: 1 yuan Currency: CNY Non-recurring Gains and Losses Items Amount Note (If Applicable) Profit and loss of disposal of non-current assets 4,523,942.28 Government subsidies included in the profit and loss of the current period, excluding those that are closely relevant to the normal business operation of the Company, and continuously enjoyed by the Company in accordance with national policies and regulations by a certain standard quota or quantity 255,116,975.93 Profit and loss of fair value changes incurred from trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities of the Company, and income on investment incurred from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, and derivative financial liabilities, and other debt investment, in addition to effective hedging business relevant to normal business operation of the Company 90,319,689.28 Other non-operating incomes and expense apart from the above-mentioned 8,775,715.26 Others that conform to the definition of non-recurring gains and losses items 2,671,926.82 Amount subject to minority stockholder’s interest 45,084,433.90 Amount subject to income tax -30,421,940.82 Total 376,070,742.65 05 III. Discussion and Analysis from the Management Notes on Industrial Background and Main Business of the Company during the Reporting Period 1. Industrial Background of the Company (1) Petrochemical The Company has a petrochemical and production capacity of 20 million tonnes per year, mainly producing 4.5 million-tonne PX, 1.8 million-tonne EG and 400,000-tonne acetic acid for downstream use of the Company. In addition, it produces 960,000-tonne purified petroleum benzine, 850,000-tonne PP, 720,000-tonne styrene, 400,000-tonne high-density PE, 140,000-tonne butadiene, and other high-end chemical products with a shortage in supply and high additional value in China. As small-scale refineries with higher production costs and outmoded equipment are phased out gradually, centralization of the refining industry and competitiveness of newly-built large-scale refineries will be dramatically enhanced. With prominent advantages in terms of policy support, process techniques, and industrial collaboration, etc., the Company, compared with other petrochemical businesses, has obvious characteristics of large petrochemical scale, a high proportion of chemical products, complete supporting facilities, and low energy consumption, thus gaining strong market competitiveness. (2) PTA PTA is the direct upstream raw material of PET. China is the largest producer and consumer of PTA in the world. Currently, the Company has a PTA production capacity of 11.6 million tonnes per year and has 2 PTA production lines with a total capacity of 5 million tonnes under construction. The Compa 2. Basic Information of Main Business of the Company The main business of the Company covers refining, petrochemical, and production, R&D and sales of PX, acetic acid, PTA, EG, Polyester Chip, PFY for civil use, PFY for industrial use, functional films, engineering plastics, PBS /PBAT bio-degradable advanced materials that relating to the whole industry chain of advanced polyester materials, including downstream, midstream and upstream business. It is the first listed company of advanced chemical materials in the industry with integration of the whole industry chain of “crude oil - aromatic hydrocarbon, alkene -PTA, EG -new polyester materials”. The Company has a production capacity of 4.5 million ny has become the PTA production supplier with the largest production capacity, the most advanced techniques, and the most evident cost advantage in the world, and the only company with a production capacity of more than 10 million tonnes calculated by the shareholding ratio in the industry. (3) Advanced Materials One of the main businesses of the Company is R&D, production, and sales of products related to advanced polyester materials. Its main products cover PFY for civil use, PFY for industrial use, functional films, engineering plastics, PBAT/PBS, and other polyester and advanced chemical material products. The production capacity of PFY for civil use ranks top five in China, while that of PFY for industrial use ranking second place across the country, making the Company one of the manufacturers of PFY for both civil and industrial use with the largest scale and the most advanced techniques in China. In addition, the Company has an annual output of 266,000 tonnes of functional films, 240,000 tonnes of engineering plastics and 33,000 tonnes of degradable plastics. Meanwhile, 3 production lines of functional films (120,000 tonnes/year) and 4 production lines for modified engineering plastics/PBS (30,000 tonnes/year) are under construction in Yingkou, which are expected to be put into operation successively in the second half of 2021. Projects of 450,000-tonne degradable plastics in Changxing Island of Dalian, and 470,000-tonne high-end functional polyester films, 100,000-tonne special functional films, 150,000-tonne modified PBT, and 80,000-tonne modified PBAT in Fen Lake of Suzhou are under construction. tonnes of PX and 400,000 tonnes of acetic acid annually in the upstream, and 11.6 million tonnes of PTA and 1.8 million tonnes of fiber-grade EG in the midstream. Its PTA and EG products are partially for private use, and the rest are for market sales. In the downstream, it has extensive varieties of advanced chemical material products with complete specifications, targeting the middle and high-end market, including PFY for civil use, PFY for industrial use, BOPET, PBT, PBS/P- BAT, and other polyester and advanced chemical material products, applied in textile, pharmaceutical, automobile, environment and new energy, electronics, PV, optical instrument and other industries with large scale, differentiation and high additional value and civil areas concerning basic necessities of life with massive demands. As the world-class petrochemical and ethylene projects concerning key production capacity and all categories of scarce chemical raw materials in the upstream have been fully put under operation, and the competitive advantages of the PTA business in the midstream keep expanding and cementing, the Company is accelerating its pace to sustain, deepen and optimize the “major chemical” platform support and raw material support for high-end advanced material and fine chemical engineering business in the downstream, to continuously extend the value and industrial chain of advanced materials. Analysis of Core Competitiveness During Reporting Period 1. Leading Strategic Advantage in the Whole Industry Chain Development The Company is the earliest and fastest leading enterprise in the industry to engage in the whole industrial chain strategic development of polyester advanced materials in China. It is actively promoting collaborated and balanced development of all business segments, vigorously expands high-end production capacity in both upstream and downstream, commits itself to creating a world-class development pattern for a listed platform with collaboration and integration of the whole industrial chain covering “crude oil - aromatic hydrocarbon, alkene - PTA, EG - polyester - PFY for civil use, PFY for industrial use, films, plastics”. The Hengli 20 million tonnes/year petrochemical integration project and the 1.5 million tonnes/year ethylene project are under full production, which marks a strategic breakthrough of the Company on key links in the petrochemical and production chain of aromatic hydrocarbon and alkene, making the Company takes the lead in the industry to actualize integration of the whole industry chain of “crude oil - aromatic hydrocarbon, alkene - PTA, EG - new polyester materials”. In addition, with new projects of PTA, advanced chemical materials, PBS/P- BAT bio-degradable advanced materials, etc., successively being inaugurated and under operation, the Company is gradually upgrading and optimizing its industrial layout, consolidating and expanding its industrial strengths in all links, promoting the quantitative transition of its business scope and qualitative transition of its business structure, to foster strategic superiority of the Company in industrial collaboration and integration, production capacity structure and quality, equipment scale and costs, accumulation of process techniques, speed of project operation and development of the listed platform, in the environment of high-quality competition of the whole industrial chain. 2. Comprehensive Operation Superiority in Scale + Techniques + Support The Company keeps introducing world-class production equipment and mature technique packages for self-learning, absorption and application, and continuously engages in technology and technique innovation and upgrade. It has been equipped with the high-quality and efficient production capacity structure and public engineering supporting facilities featuring “equipment upsizing, capacity scaling-up, structural integration, technique advancement, greenness and environmental-friendliness, and complete support” in the whole industrial chain of advanced polyester material covering the upstream, midstream and downstream. Its processing scale and technical level which are second to none in the industry in terms of individual unit installation, total production capacity and process techniques, giving the Company scale advantages and operation efficiency in unit investment costs, material and energy consumption conservation, unit processing costs, product delivery circle, product quality and diversification, etc., and ensuring stable and preeminent quality performance. In addition, with the most complete supporting capacity in the industry, including power, energy, port, wharf, tank field, warehouse and logistics, the Company enjoys remarkable superiority in comprehensive operation covering comprehensive cost saving, service quality and performance, operation efficiency, etc. In the industrial park, oil refining, chemical engineering and coal-based chemical processing are complementary to, and mutually reliant on each other, with a balance of high efficiency and cost control. The petrochemical business of the Company is equipped with the largest-scale coal-hydrogen production facility across the country, generating low-cost pure hydrogen, methanol, acetic acid, syngas and other coal-based chemical products, which, together with the Company’s advantages in storage and logistics of raw materials and products, dramatically improves the operational flexibility and comprehensive cost advantage of the project. 3. Superiority in Market Competition Driven by Advanced R&D The Company follows the development path laying equal stress on market differentiation, technology advancement, large-scale equipment, and business integration, upholds the innovation mechanism based on market-technology interconnectivity, creates internationalized R&D teams, sets up high-level platforms for scientific and technological R&D and that for innovation of new products, has the ability 07 to make quick response to the latest change of market demand, and has stable mid-to-high-level client resources. Four business entities under the Company, i.e., Hengli Chemical Fiber, Deli Chemical Fiber, Hengke Advanced Materials, and Kanghui New Material, are all national high and new tech businesses. Thanks to fine management and upgrading techniques in the production, the Company has independently developed a series of differentiated and functional products based on research, held patents of a large number of products, and won widespread market recognition. It enjoys superiority over peers in quality and stability of products, as the only company in China with the capacity for mass production of 7D FDY products, the company covering more than 65% of the total output of MLCC release liners in China, and the first company in China, as well as the second in the world, with the capacity for on-site production of 12-nanometer silicon-coated release laminated protective films for lithium batteries. The absolute technological superiority and technical experience in the fields of functional films and PFY for civil use have put the Company in an invincible position in an industrial competition that is difficult to replicate in the short run. 4. The Advantages of Smart, Lean and Efficient Management We are committed to promoting the idea of “deep integration of the Internet, big data, Artificial Intelligence (AI) and the real economy”, by developing advanced manufacturing capacity and regenerating internal driving force. In achieving this goal, we take the “intelligent interconnection” as a key starting point for industrial upgrading and transformation, through “replacing humans with machines”, “replacing machines with automatic machines”, “replacing one machine with a complete set of machines” and “replacing digitalization with intelligentization”, thus facilitating the gradual transition from “strength in human resources” to “strength in technology” in our development pattern. By means of the integrated application of intelligent manufacturing, the Internet, the Internet of things, and other technologies, we are constantly promoting the level of intelligent manufacturing throughout the entire process. Product traceability and full-process control are realized through a self-developed product detection system, automatic bar code system, intelligent warehouse management system, and sales system, together with the seamless integration with the ERP system, thus promoting the integration of key links such as corporate control, R&D, manufacturing, business management, and financial connection, facilitating the transition from “manufacturing” to “smart manufacturing”, and transforming from single business management to highly-coordinated operation of the industrial chain. 5. Continuously-accumulated Talent Management Advantages We have formed a multi-disciplinary and multi-profession scientific and technological team, including refining, petrochemical, polymer materials, chemical fiber engineering, textile engineering, electrical engineering, etc. Besides, our scientific research and development capabilities are ahead of our domestic counterparts. While introducing external talents, we also attach great importance to the cultivation of our internal talents at the same time, by providing our employees with a smooth career development channel. In addition, we have also established a complete internal training system and trained a large number of key personnel, covering various aspects, including R&D, production, sales, management, etc. Discussion and Analysis of Our Business Performance In the first half of 2021, “The global epidemic still continues to evolve and the external environment becomes more complex and severe.” Under the context of globally normalized epidemic prevention and control, the world economy is slowly bottoming out and recovering amid the repeated twists and turns of the epidemic, the intensification of conflicts among major powers, and the restructuring of international supply and demand. With the continuation of various stimulus policies, the world economy has witnessed a shortage economy in which a certain degree of demand grows faster than the supply recovery. However, the ongoing evolution of the current overseas epidemic situation has undoubtedly increased the uncertainty of the global economic growth, which may also make it difficult for countries to withdraw from targeted policies such as mone tary easing and economic stimulus in the short term. At the same time, the global gap in vaccine supply is intensifying the divergence between regulatory effectiveness and economic development. Globally, major developed economies and some emerging countries and regions are working hard to accelerate the pace of COVID-19 vaccine R&D and vaccination coverage, in an aim to win the tough fight against virus mutations. Looking forward to the second half of the year, from the perspective of the international environment, it is expected that the production and consumption demand in major global markets will still remain in the status of gradual recovery and improvement under the accelerated popularization of vaccines and the stalemate situation of the epidemic control. Coupled with the impetus of the acceleration of global material consumption demand stimulation and 08 the repeated reflux of overseas trade orders, enterprises in the industry are facing interference factors, including the repeated external epidemic and complex trade environment. However, based on the expectation and foundation for the overall improvement of global consumer demand and efficient and stable domestic production capacity supply, the enterprises in the industry are expected to maintain a sound momentum of business development in the second half of the year. Domestically, in 2020 and the first half of 2021, the targeted and efficient approach in epidemic prevention and control adopted by China has minimized the negative impact of the epidemic on the macroeconomy both at home and abroad, thus the quality and level of domestic economic growth have always maintained at the forefront among the world’s major economies. The steady growth of household consumption and the policy of “filling in the gaps in foreign demands” continue to play a prominent role as the “ballast” and “lubricant” of the economic growth. After realizing dynamic and effective epidemic control in China, domestic consumption has stabilized rapidly and turned for the better, and the policy of “tapping the potential of the domestic market” continues to be implemented, all of which has become the leading factor and driving force in boosting the domestic cycle and offsetting the external fluctuations. Based on and promoted by the huge growth of domestic consumption and the upgrading of consumption structure, and with the accelerated upgrading of China’s economic structure toward a new economy, new driving forces, new manufacturing, and green, low-carbon, energy-efficient, and environment- friendly production and consumption, the high-end manufacturing and high-tech integration of the industrial chain composed of the scientific and technological innovative industrial entities including the new energy, 5G, photoelectric chips, integrated circuits, biotechnology, industrial Internet and artificial intelligence will usher in strong growth in terms of consumption resilience and innovation vitality. “New consumption” and “cutting-edge technology” are interacting with each other and moving towards further development with great momentum in obvious trends, which will also outline the strategic direction for the future of the industry in terms of advanced production capacity layout and application scenario extension based on advanced materials. Looking back at the industry, against the backdrop of globally normalized epidemic prevention, businesses are not only faced with unexpected risks and challenges, but are also taking initiatives to turn risks into opportunities, and has achieved stable operation and smooth production and marketing based on a stable and efficient supply of industrial chain products and market stability and flexibility. In the first half of this year, from the perspective of the overall internal and external environment, the industry has benefited from the increase of the international crude oil price and terminal consumption recovery driven by steady domestic economic growth. With the recovery of external demands and repeated reflux of international orders due to vulnerable supply capacity resulted from the epidemic, the prices and price differentials of main chemical products produced by upstream refining, coal-gasification, and ethylene plants, such as PX, pure benzene, acetic acid, polypropylene, ethylene glycol, styrene, polyethylene, butadiene, etc., have generally maintained and kept fluctuating within a strong range, thus leading to stable profitability. Similar to upstream enterprises, downstream new chemical material products also benefited from the increase of raw material costs and terminal demands recovery, the profitability of polyester yarn for civil use and polyester yarn for industrial use is rapidly returning to normal, and functional thin films, engineering plastics, biodegradable materials, and other under-supply materials have maintained higher prices and greater profitability. In the face of the turbulent external environment, the integrated operation of industrial chain with high value-added and diverse products and combined supply of products will be better prepared against an oil price decline and will show stronger profitability resilience when oil prices rise and demands restore, which will stabilize and boost business profitability to the maximum extent. In addition to the impacts brought by the above-mentioned factors, including crude oil and raw materials costs and evolving traditional stock demands, it should be highly noticed that the demand and structure of advanced material chemical products, serving as an important pole of advanced materials, will benefit from and be boosted by new consumption and cutting-edge technology at an exponential speed after entering the “14th Five-Year Plan” period. And it is expected to develop and create more high value-added advanced-material consumption and technology products with large capacity within a foreseeable time based on local chemical advanced-material supply system, such as new biodegradable materials in the field of green consumption, semiconductor and optical film, and functional membrane in the field of consumer electronics, lithium separator, battery-grade DMC and PVDF materials in the field of new energy power battery, EVA and POE film in the field of photovoltaic module, PBT, ABS, PC engineering plastics in the field of new energy vehicle lightweight and charging pile. The new market and new demands in the advanced material industry can achieve rapid growth with the explosively growing demand of “new consumption” and “new manufacturing” in the downstream. The potentially visible blue ocean market will also become the strategic commanding heights for leading enterprises in the industry in future development, especially the high-end advanced material chemical import substitution market which has been hampered by many bottlenecks. At the same time, the “carbon peak and carbon neutrality” goal has also become important guidance and priority direction for enterprise business development. This goal includes not only accelerating the structural changes adapted to the residents’ consumer demand for low-carbon and environmental protection, but also involves meeting the material needs of the national industrial green transformation and upgrading, as well as the optimization and adjustment of the operation of the industry itself under the “double-carbon” mode. These will promote the industry enterprises to actively transform from “energy + chemical industry” to “platform-based + advanced materials”, and from “scale economy-led” to a “green cycle-driven” business operation model. It can be said that advanced materials, as the “foundation” of the manufacturing industry development, are of major strategic significance for promoting technological innovation, breaking through the “bottleneck” technology and supply chain blockade, maintaining the independent controllability of the industrial chain, and supporting high-quality development. Looking forward to the “14th Five-Year Plan”, the global advanced chemical material consumption industry, especially this industry in China has enjoyed a extremely broad market and development potential. On the one hand, unlike other material industries, the core demand and ultimate driving force of advanced chemical material links are seeking a more rigid and engaging residential terminal consumption field. During the “13th Five-Year Plan” period, the supply-side reform of the petrochemical industry in China has achieved significant results, the systematic optimization of the supply structure and the significant downward shift of the cost curve have greatly promoted the improvement of the quality and its category as well as the efficiency and cost of the range economy. Facing the “new consumption” area, the continuous upgrading of the supply structure and the continuous improvement of the additional consumption is implemented to drive the expansion of the social demand value and the total capacity. In this way, it has become the theme of new supply and demand trends adapting to high technology, high added value, low carbon environmental protection, and individualized customization, and promote the market research and development of modification and application in advanced chemical materials for new consumption scenes in the future. On the other hand, as the global industrial sectors in new energy, semiconductors, 5G, intelligentization, and other new technologies and new manufacturing production scenarios accelerate their transfer to China or take China as the core market for further development, the development momentum and scale capacity of the high-end fine chemicals and advanced chemical materials market for industrial manufacturing are also expected to continue to increase and expand along with the acceleration of the implementation of “carbon peak and carbon neutrality”, industrial upgrading, infrastructure transformation and changes in the consumption structure. In this sense, driven by scientific and technological innovation and technological R&D, the industrial application market of differentiated, functional, and high-end advanced chemical materials will make a great difference. Back to the enterprise level, during the 13th Five-Year Plan period, the main logic and driving force of our development were to base on the expansion and strengthening of downstream polyester advanced materials for a vertical and integrated breakthrough “from the bottom to the up” to break the monopoly and “bottleneck” of overseas production capacity on upstream raw materials like aromatics and olefins, and upgrade to a platform of “major chemical” with refining, chemical and coal as industrial carriers and to the upstream fields of strategic scarcity. Eventually, we have realized the comprehensive improvement in key production capacity of the industry, process equipment, equipment intelligence, and the integrated cooperation of industry. Entering the new period of the “14th Five-Year Plan”, with the upstream breakthrough, the leading enterprises have greater operating content, development space and growth possibility under the operation mode which allows in-depth coordination and complementary operation between the platform of “major chemical” and the extension of advanced materials throughout the whole industry chain. Meanwhile, faced with the exponential growth and huge gap in the demand for advanced chemical materials caused by the rapid development of “new consumption” and “Key&Core Technology” in the future, we should make full use of the continuous empowerment of the “major chemical” platform upstream and the accumulated development of advanced materials downstream for the “top - bottom” development of the new markets of downstream chemical materials, which will become the historical mission and core driving force for the development of industrial enterprises in the next five or even ten years, and is expected to promote leading enterprises’ chemical-materials-based building of industrial chain and the improvement of scarce production capacity, so as to serve the country in upgrading advanced manufacturing and consumption, to achieve an explosive breakthrough and a “secondary growth curve” of long-term development under the effect of core technology, manufacturing technology and large-scale overwhelmingness. “The advanced materials industry is not only a strategic and basic industry but also a key area of high-tech competition. We must work hard to catch up.” Undergoing profound changes unseen in a century, “scientific and technological self-reliance and self-improvement” has become the subject of the times, calling for great breakthroughs and great development of sci-tech innovative enterprises. Hengli Petrochemical is a private advanced materials enterprise that has fought and honed all the way from downstream despite the fierce market competition. Beginning with the downstream polyester advanced materials industry, Hengli climbed vertically along the petrochemical industry chain and broke through the upstream development bottleneck one after another to acquire a systematic industrial pattern of both “major chemical” platform and “advanced materials extension”. When dealing with the reform and upgrading of consumption structure and industrial system, Hengli also has a more unique and comprehensive advantage of platform integration and industry-driven ability. After strategically completing the key production capacity in the last round of “major chemical” platform, the listed company took advantage of the further optimization and consolidation of the production capacity in the midstream and downstream. Now, entering the new development period of the “14th Five-Year Plan”, with questions like how to rely on the advantages of the upstream platform to deeply tap the potential of advanced materials, how to further expand the leading advantage of the competitiveness in the whole industry chain, how to further enhance the benefits of large-scale integration and the added value of product technology, as well as how to further deepen and broaden the strong moat built by technology, cost, management, efficiency and innovation, the strategic choice of “improving the upstream while strengthening the downstream” has become inevitable. On the one hand, by expanding and improving the industrial layout in the midstream and upstream, we will further use the industrial support and basic role played by the high-end chemical raw materials to actively “complement and strengthen the chain” with “R&D innovation”, while constantly guarantee the platform function and operation efficiency of the “major chemical” industry upstream to reserve space and pave a path for the continuous expansion of various advanced materials business downstream in the future. On the other hand, through refinement and strengthening the downstream, we focus on specific technological R&D lines with more unique skills, leading products, and professional fields, so as to achieve efficient penetration and deep connection from raw materials to processes, and to the market. Aiming at the new application direction and new market of polyester and polyester-like products downstream of aromatics, as well as fine chemicals and special advanced materials downstream of olefins, so as to consolidate the advantages of the traditional market. At the same time, we should focus on the key advanced materials and fields that have breakthroughs due to the development and upgrading of “new consumption” and “Key&Core Technology”, and “look for opportunities and driving forces for development from green development”. We will actively embrace and help our country in its goal of peaking carbon dioxide emissions and achieving carbon neutrality and adhere to the path of “participating in the industries we understand, developing the industries we are familiar with, and keeping growing strong, bigger, and better in the professional field.” Through active measures including external introduction, joint R&D, joint venture and cooperation, and internal innovation, we will continue to develop advanced materials business growth points with advantages of scale and leading levels, so as to ensure that every project and industry developed by Hengli should become a global benchmark and the best of the industry, and ensure that we will not lag behind in the next decade or more. with our continuous pace towards an enterprise with the world-class platform of advanced chemical materials R&D and manufacturing. （未完）  |