On the evening of July 5, Eastern Shenghong released its interim results forecast for 2026, expecting net profit attributable to shareholders of 4.2 billion to 5.0 billion yuan for the first half of the year, a year-on-year surge of 987% to 1,194%.
In the same period last year, the company’s net profit was only 386 million yuan. This means that within just one year, its profit scale has expanded nearly twelvefold.
Breaking it down: in the first quarter, the company posted a net profit of 1.432 billion yuan; the second quarter is expected to generate between 2.768 billion and 3.568 billion yuan in profit, representing a quarter-on-quarter increase of 93% to 149% and a year-on-year jump of more than 60 times.
Excluding non-recurring items, the company expects recurring net profit of 4.016 billion to 4.816 billion yuan for the first half, up 1,377% to 1,672% year on year, indicating a substantial improvement in core operating profitability.
Other companies that released first-half forecasts on the same day include China Merchants Shipping, Tianshan Aluminum, and Olaide, with projected net profit increases of 214%–248%, 101.52%, and 492%–604%, respectively.
By comparison, Eastern Shenghong stands out in both the scale and pace of its earnings growth.
The rapid profit expansion is closely tied to the surge in international oil prices during the first half of this year. Brent crude rose from below $60 per barrel at the start of the year to briefly breaking through $110 per barrel. Driven by cost push and tight supply, petrochemical product prices generally increased, and processing margins for most products widened in tandem. Taking Zhengzhou Commodity Exchange propylene futures as an example, the price ranged from a low of 5,821 yuan/ton to a high of 9,859 yuan/ton, with an average of about 7,594 yuan/ton – significantly higher than in the same period last year.
For Eastern Shenghong, the key factor widening its earnings gap is its 16-million-tonne-per-year integrated refining and petrochemical project.
The company operates a 16-million-tpy integrated refining unit, making it one of China’s three major private petrochemical refiners. With integrated operations across refining, aromatics, olefins and other upstream-downstream chains, raw materials and intermediate products are recycled internally. When industry conditions improve, this scale advantage further amplifies profit elasticity.
Beyond its traditional refining and petrochemical business, the company's newer new-energy materials segment has also begun to enter a payoff phase.
Currently, Eastern Shenghong has 900,000 tpy of photovoltaic-grade EVA capacity, and its 100,000-tpy POE plant has already commenced production, making it one of the few domestic producers capable of manufacturing both EVA and POE photovoltaic encapsulant materials. At the same time, its acrylonitrile capacity stands at 1.04 million tpy, ranking first in China.
Driven by the upbeat forecast, oil & gas, refining, and chemical fibre sectors rallied on July 6. Beiken Energy hit the daily limit, Eastern Shenghong rose more than 8% intraday, while Hengli Petrochemical, Hengyi Petrochemical, Tongkun Group, and Rongsheng Petrochemical all gained over 6%. The Chemical ETF (Huabao) rose as much as 2.7% during the session. By the close, Eastern Shenghong traded at 13.24 yuan.
In fact, the improvement in the chemical industry's profitability has been gradually emerging this year. In the first quarter, the combined net profit of China’s four major private petrochemical refiners reached 12.05 billion yuan, up 2.3 times year on year. The basic chemical industry saw operating revenue grow 9.26% year on year, while net profit attributable to shareholders rose 13.41%. Both gross and net profit margins registered year-on-year and quarter-on-quarter improvements for the first time since 2022.
A 5-billion-yuan half-year profit has put Eastern Shenghong back in the market spotlight. But what investors care about more is not just one company’s performance, but whether this high growth is spreading across the broader industry.
So far, profitability is improving across cyclical sectors including refining leaders, some aluminium producers, and shipping. The chemical industry is also experiencing its most significant profit recovery in nearly two years. That said, this rebound remains concentrated among leading enterprises with stronger cost-control capabilities and more complete industrial chains; smaller and medium-sized chemical producers have yet to see their operating pressures fully ease.
