Under the policy guidance of "reducing oil and increasing chemicals," China's private petrochemical sector is shifting from rapid expansion to building unique value chains. Leading private petrochemical firms are now showing signs of gradual recovery in performance.
Amid "anti-involution" efforts and declining crude oil prices, market concentration and profitability in the refining sector have improved, with leading enterprises seeing notable operational enhancements. In the first three quarters of this year, most of the top four private refining giants—Hengli Petrochemical (600346.SH), Rongsheng Petrochemical (002493.SZ), Oriental Energy (000301.SZ), and Hengyi Petrochemical (000703.SZ)—reported net profit growth. Notably, Rongsheng Petrochemical's Q3 net profit attributable to shareholders surged 1,427.94% year-on-year and 1,992.91% quarter-on-quarter.
Private refining leaders are deepening integrated refining and chemical layouts while expanding upstream and downstream. Rongsheng Petrochemical and Oriental Energy have gained a competitive edge in downstream new materials, with new projects successfully launching and ramping up production. Institutions like Cinda Securities believe that amid limited capacity expansion and industry consolidation, advanced private refiners are poised for stronger earnings performance.
**Private Refiners Show Recovery, Rongsheng Petrochemical’s Q3 Net Profit Jumps 10-Fold** With "anti-involution" policies taking effect, refining leaders have benefited significantly. Although revenue remained under pressure for the top four private refiners in the first three quarters, profitability improved overall. In Q3, some companies posted impressive net profit growth.
According to financial reports, Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, and Oriental Energy reported Q1-Q3 net profits attributable to shareholders of RMB 5.023 billion, RMB 888 million, RMB 231 million, and RMB 126 million, respectively, with year-on-year changes of -1.61%, +1.34%, +0.08%, and +108.91%.
Hengli Petrochemical led with RMB 5.023 billion in net profit, while Oriental Energy saw the strongest growth at 108.91%. However, Oriental Energy’s non-GAAP net profit was negative, indicating reliance on non-recurring gains. Rongsheng Petrochemical’s Q3 net profit surged 1,427.94% YoY and 1,992.91% QoQ to RMB 286 million.
Crude oil price fluctuations remain a key variable for refiners. With oil prices stabilizing, chemical-focused refiners saw cost optimization. In H1, Brent crude fell from $80/barrel to $60/barrel, stabilizing at $60–$70 in Q3. Analysts note that Rongsheng Petrochemical’s Zhejiang Petrochemical subsidiary improved profitability due to stable crude prices and better refining-chemical spreads. Brent averaged $69.17/barrel in Q3, while gasoline, diesel, and aromatics spreads widened.
Refiners’ gross margins also improved. Hengli, Rongsheng, Hengyi, and Oriental Energy reported Q1-Q3 gross margins of 13.46%, 12.91%, 4.37%, and 9.92%, up 3.1, 0.74, 0.33, and 1.33 percentage points YoY, respectively. Year-to-date stock performances as of December 10 showed Hengli (+27.90%), Rongsheng (+5.28%), Oriental Energy (+12.79%), and Hengyi (+33.75%).
**Rongsheng Petrochemical’s Strong Rebound: Expanding Supply Chain and Global Footprint** Rongsheng Petrochemical, with Q3 net profit soaring over 10-fold YoY and QoQ, operates the world’s largest single-site refinery—Zhejiang Petrochemical—with 40 million tons/year crude processing capacity, 8.8 million tons/year PX, and 4.2 million tons/year ethylene. The subsidiary is pivotal in Rongsheng’s "from oil to fiber" integrated chain, contributing RMB 21.32 billion in H1 net profit (+5.04% YoY).
Under the "reduce oil, increase chemicals" policy, Rongsheng is expanding into high-value chemical materials. Its subsidiary Rongsheng Advanced Materials is developing fine chemicals and new materials. Key projects include a 250,000-ton functional polyester film expansion (fully operational), high-performance resin (75% complete), and high-end materials (9% and 19% progress).
Rongsheng is also strengthening ties with Saudi Aramco, which holds a 10.14% stake. The two are exploring joint ventures, including a potential 50% acquisition of Aramco’s SASREF refinery in Jubail, to secure feedstock and expand global sales channels.
**Oriental Energy’s New Materials Edge and Policy Tailwinds** Oriental Energy, another refining leader, operates a 16 million tons/year integrated refinery, 2.4 million tons/year MTO, and 700,000 tons/year PDH units, covering "oil, coal, and gas" olefin pathways. Despite a 108.91% YoY net profit growth in Q1-Q3, its non-GAAP net profit was negative due to government subsidies (RMB 71.42 million) and financial asset gains (RMB 157 million).
Analysts remain bullish on Oriental Energy’s earnings potential as "anti-involution" policies accelerate outdated capacity exits. The company is advancing its "1+N" strategy, integrating refining with new energy, materials, and electronics. Its subsidiary Sibon Petrochemical leads in acrylonitrile (1.04 million tons/year) and EVA (900,000 tons/year) production. Recent project launches include POSM/polyols and recycled polyester filament expansions.
(Stocks mentioned are for illustrative purposes only; not investment advice.)
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