Coal chemical industry notches up its best first half year in 5 yrs
2018 first half-year financial statements of listed companies uncovered the situation of industries - as the rising of global oil price, except the direct beneficiary, petrochemical industry is in recovery, coal chemical industry also performs pretty positively.
- (1888PressRelease) December 27, 2018 - 2018 first half-year financial statements of listed companies uncovered the situation of industries - as the rising of global oil price, except the direct beneficiary, petrochemical industry is in recovery, coal chemical industry also performs pretty positively.
Since the beginning of this year, the stocks of coal chemical industry are rebounding. According to iFinD data statistics, from Hithink RoyalFlush Information Network Co.,Ltd., the overall net profits of 48 coal chemical concept stocks in the first half year increase 9.38 billion yuan to 23.44 billion yuan (around 3.4 billion US dollars) compared to the year earlier, a 66.7% year-over-year revenue growth.
In fact, the coal chemical industry, where the average net profit of companies is ￥488m (around $70.5m) in the first half of 2018, notches up its best performance in recent five years, while these of 2014, 2015, 2016, 2017 are ￥172m, ￥132m, ￥107m, ￥293m respectively.
A chemical industry analyst told reporters that the price of raw coal is relatively stable after the rising of petroleum, which brings benefits to cost control of raw materials for the entire coal chemical industry, thus the economical efficiency rises significantly.
42 out of the abovementioned 48 stocks earned profit in the first half of this year, of which, Yanzhou Coal Mining Company Limited, China Coal Energy Company Limited, Luxi Chemical Group Co., Ltd., Shangdong Hualu-Hengsheng Chemical Co., Ltd., Datang International Power Generation Co., Ltd., China National Chemical Engineering Co., Ltd., the net profits of these six companies were ￥4.34bn (growth rate of 31.89%), ￥2.76bn (16.96%), ￥1.72bn (5.5%), ￥1.68bn (5.45%), ￥1.36bn (10.8%), ￥1.08bn (8.47%) respectively.
Although Yanzhou Coal Mining Company Limited has the highest net profit on the list, its operating revenue, which was ￥76.3bn, fell 5.52% year on year. The company claimed that the change of income was due to the increase of self-produced coals sale and sale price, which added ￥9.24bn to its revenue, while other operating income reduced ￥13.76bn.
Besides, according to statistics, the net profits of 40 companies increased compared to a year before, 15 companies multiplied their profits, 2 of which (profits of Guizhou Salvage Pharmaceutical Co., Ltd. and Shanxi Coking Co., Ltd.) was startlingly increased forty-fold, more minutely, 4194.86% (to ￥128m) and 4038.96% (to￥823m) respectively.
Guizhou Salvage Pharmaceutical Co., Ltd. said that it was these three factors that their profit increased: the leap of the average selling price of carbamide; the reducing selling cost due to the stabilization of chemical fertilizer production and a larger sales volume; their steady growing pharmaceuticals business, which jumped 33.46% from a year earlier.
Shanxi Coking Co., Ltd. accomplished their asset acquisition of Shanxi China Coal Huajin Energy Firm, which brought enormous confirmed benefits of 611 million yuan between March and June of 2018. Moreover, by the accounting standard, if the initial outlay to Huajin Energy Firm is less than the deserved fair values of the net identifiable assets when investing, an extra 164 million yuan will be counted into non-business income with the adjustment of long-term equity investment.
Beforehand, an industry analyst asserted that the profits of coal chemical industry are mainly due to the price rising of mid-range chemicals, which started at the beginning of 2017. For now, it seems like this trend will remain because it is the global economic demand that drives the price of the mid-range chemicals. But the trend of next year is dubious since chemical devices form the Middle East and North America will come on stream.
An chemical industry analyst form Shanghai Stock Exchange believed that influenced by the sustaining deepening of environmental supervision, part of subdivided industries will continue rising while some outdated production facilities, high-polluting and low-production industries will be curbed in order to better control the supply of the industry, and extend its prosperity. Meanwhile, benefiting from a higher pivot of the oil and gas prices, correlated products may rise in price. Coal companies will gain excess profit with a stable cost.
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