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EQS-News: Shanghai Petrochemical Announces 2020 Annual Results Operation Further Optimized and Company Competitiveness Leapfrogged

03/24/2021 | 09:17pm EDT
EQS-News / 25/03/2021 / 10:16 UTC+8 
Press Release 
[For Immediate Distribution] 
Shanghai Petrochemical Announces 2020 Annual Results 
Operation Further Optimized and 
Company Competitiveness Leapfrogged 
(24 March 2021, Hong Kong) Sinopec Shanghai Petrochemical Company Limited ("Shanghai Petrochemical" or the "Company", 
together with its subsidiaries known as the "Group") (HKEX: 00338; SSE: 600688; NYSE: SHI) today announced the annual 
results for the twelve months ended 31 December 2020 (the "Period"). 
Given the global COVID-19 pandemic spread, a short-term historical plunge in international oil price and a sharp fall 
in market demand in 2020, The Group adhered closely to the grand principle of seeking progress while maintaining 
stability. The Group sought to ensure "Six-Sphere Stability" and "Six-Sphere Guarantees", and strove for the resumption 
of works and production at the same time with pandemic prevention. The Group focused its attention on main 
contradictions, system optimization, and pandemic prevention to transform potential crises into opportunities, to 
achieve a level of operation results as expectations with the joint efforts of all staff. Under IFRS, net sales of the 
Group in 2020 amounted to RMB61,561 million, a decrease of 30.1% from the previous year's RMB88,056 million. Net profit 
attributable to owners of the Company amounted to RMB645 million, a decrease of 70.9% from the previous year's RMB2,216 
million. Basic earnings per share amounted to RMB0.060, and the Board proposed to distribute a dividend of RMB0.10 per 
share (including tax), accounting for 167.79% of the net profit attributable to the shareholders of the Company. 
Reinforcement of safety and environmental management with an overall stable production 
In 2020, the Group focused on building up and implementing stable production as its top priority in production 
management, and implemented and consolidated its foundation in production operation while cementing safety management. 
The Company seeks to implement the HSSE management system and put into practice process safety management, and further 
enhance its ensure equipment integrity assurance regime. In addition, the Company vows to strictly enforce the "10 
Major Measures to Step Up Management of Segments In Direct Work Process". Focusing on contractors and direct work 
process management, a safety marking system is to be implemented on all staff, while more emphasis will be imposed on 
change management, limitation management and advance warning management, etc. Moreover, the Company also expands its 
scope of work on areas such as safety management and job ticket management. Both safety and environment is well 
regulated overall. The Group also strictly controlled the "Three Smalls" (i.e. small fluctuations, small anomalies and 
small deviations) and put an end to the "Three Nons"(i.e. non-planned shutdown of divisions, non-planned shutdown of 
machine and non-planned shutdown of furnace). The Company has implemented a three-year plan for the prevention and 
control of work safety and carried out safety hazard management. The Company has carried out the development of green 
grass-roots level and environmental traceability management. Through the re-examination of Sinopec's green enterprise, 
the site environment was continued to improve and the concentration of VOCs at the boundary of the plant decreased. In 
2020, there were 17 full-scale unplanned shutdowns in 2020, representing a decrease of 32%, the smoothness rate of 
equipment for the whole year is 98%, representing an increase of 0.36 percentage point. Among the 58 main technical and 
economic indicators included in the Company's 2020 assessment plan, 44 indicators reflected better performance then 
last year, with a year-on-year improvement rate of 75.86%. 
Oil and petrochemical market was deeply affected by the epidemic with product prices adjusted downwards 
In 2020, the country's petrochemical industry faced major challenges. The production and sales of petrochemical 
products dropped sharply in the first quarter and gradually return to normal after the second quarter with the prices 
of major petrochemical products were lower than last year. Demand for refined oil was slowing down, especially in the 
first half of the year while the competition was fierce among products. As of 31 December 2020, the weighted average 
prices (excluding tax) of the Group's synthetic fibers, resins and plastics, intermediate petrochemical products, and 
petroleum products had decreased by 19.84%, 10.65%, 19.49% and 30.48%, respectively as compared with the previous year. 
As of 31 December 2020, the Group had processed a total of 14.6715 million tons of crude oil (of which 402,400 tons 
were processed on order), indicating a year-on-year decrease of 3.47%. The cost of crude oil processing for the whole 
year of 2020 was RMB 2,380.02/ton, representing a decrease of RMB 950.61/ton or 28.54% from the same period last year. 
The annual crude oil processing total cost decreased by RMB 13.117 billion from the same period last year or 27.86%, 
accounting for 54.86% of the total cost of sales. 
Further optimization of operation with precision to overcome difficulties and achieve effectiveness 
In 2020, the Group emphasized effectiveness and focused on business optimization, and actively promoted further 
optimization of raw materials and product structures. Taking advantage of the plant's low-load operation during the 
pandemic, the Group completed the overhaul of 12 sets of oil refining plants. An adjustment was introduced into crude 
oil procurement strategy to combine with the change of crude oil market price. The Group increased the purchase volume 
of Kuwait crude oil, carried out crude oil financial derivatives and purchased Oman crude oil in the pricing mode of 
Dubai commercial exchange. Downstream equipment for externally procured resources such as ethylene, carbon four, carbon 
five, etc., was fully deployed.  The Group also optimized the structure of ethylene feedstock, the operation of the 
residue hydrotreating unit and the control of catalytic feedstock, and at the same time processed low-sulfur crude oil 
and realized the full-load operation of the catalytic unit during the replenishing of single-series residue 
hydrotreating. Furthermore, 614,000 tons of jet fuel were produced, and there was an increased in output of asphalt by 
219,600 tons year-on-year. The diesel-gasoline ratio reached 1.22; The Group also seen an increase in production of 
high-yield products such as butadiene and ethylene oxide, among which 312,900 tons of ethylene oxide were produced, 
represented a growth of 13.69% and an appreciation of RMB61.58 million in value in terms of efficiency. There was also 
a rise in production of high-grade gasoline with the annual sales volume reaching 1.144 million tons, with high-grade 
gasoline accounted for 34.8% which was a record high; annual product sales rate reached 100.11%. The Group made full 
force in costs and expenses reduction under strict control and developed the 100-Day Breakthroughs campaign and the 
ongoing campaign. The Group also continued to explore cost-reduction potential in large-scale procurement and at the 
same time proactively promoted competitive procurement, open procurement, and the amendment and utilization of backlog 
materials. Through the issuance of extremely short-term commercial paper and other approaches, the comprehensive 
financial costs have been decreased. 
A further deepening of energy saving and emission reduction 
In 2020, the Group continued implementing various energy conservation and emission reduction measures as per the 
national energy conservation and emission reduction requirements. The Group continued to optimize carbon emission 
accounting methods, and managed to reduce carbon emission compliance costs by RMB5.28 million. In the past year, 49 
water resources management optimization measures were devised, and the total volume of retrieved industrial water 
decreased by 10.54%. In 2020, the Company's total comprehensive energy consumption was 6.920 million tons of standard 
coal. The comprehensive output value consumption was 0.743 tons of standard coal/RMB10,000, representing a decrease of 
0.27% over 0.745 tons of standard coal/RMB10,000 of last year. The annual COD emissions decreased by 14.97%, sulfur 
dioxide emissions decreased by 4.74% and nitrogen oxide emissions decreased by 3.37% (Data from the Ministry of Safety 
and the Ministry of Environment had shown discrepancies), as compared with the same period last year. The volume of 
annual average cumulative average VOCs concentration at the plant boundary is 99.1 micrograms/m3, a decrease of 26.92% 
compared with last year. The comprehensive compliance rate of effluent wastewater was 100%, the compliance rate of 
controlled waste gas was 100%, and the rate of proper treatment and disposal of hazardous waste was 100%. The heating 
furnace's average thermal efficiency was 92.46%, which was equivalent to the level last year. 
Innovation in stable steps forward 
In 2020, the Group moved firmly along the direction of "basic + high-end" development and put innovation as the top 
consideration in advancing the development of the Company. The Group also sought to strengthen scientific and 
technological innovations. The Advanced Materials Innovation Research Institute was established to carry out joint 
researches. A substantial breakthrough was made in the "business unit + company" operation model for carbon fibre. 
Constructions of projects were accelerated with the Jinshan Area Comprehensive Environment Improvement Oil Product 
Cleaning Project was put into operation. The oxidation and carbonization part of the second phase project with an 
annual output of 1,500 tons of PAN-based carbon fiber was suitable for intermediate delivery and the large tow carbon 
fiber project started on schedule. We will actively promote joint ventures and cooperation. Acquisition of Zhejiang 

(MORE TO FOLLOW) Dow Jones Newswires

March 24, 2021 22:16 ET (02:16 GMT)

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ChangeLast1st jan.
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WTI -1.63% 69.296 Delayed Quote.48.11%
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Sales 2021 89 042 M 13 780 M 13 780 M
Net income 2021 3 494 M 541 M 541 M
Net cash 2021 4 284 M 663 M 663 M
P/E ratio 2021 4,95x
Yield 2021 10,3%
Capitalization 28 298 M 4 373 M 4 379 M
EV / Sales 2021 0,27x
EV / Sales 2022 0,21x
Nbr of Employees 8 466
Free-Float 46,3%
Duration : Period :
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Number of Analysts 9
Last Close Price 1,36 CNY
Average target price 2,00 CNY
Spread / Average Target 46,9%
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Managers and Directors
Ze Min Guan General Manager & Director
Guan Zemin President
Jun Du CFO, Executive Director & Deputy General Manager
Hai Jun Wu Chairman
Yan Hui Ma Chairman-Supervisory Board