A petrochemical-fiber company's half-year profit has jumped 23 times. On June 25, Hengyi Petrochemical released a performance forecast: net profit attributable to shareholders for H1 2026 is expected to be between 5.5 billion and 6 billion yuan, a year-on-year increase of 2326.31% to 2546.88%. This figure refocuses the entire polyester industry chain on the value of overseas refining assets.
Core Engine of Profit Explosion
In Q1 2026, Hengyi had already achieved a net profit of 1.995 billion yuan, a year-on-year increase of 3773.77%. In Q2, performance accelerated quarter-on-quarter. Based on the announcement, Q2 net profit is estimated at 3.505 billion to 4.005 billion yuan, a sequential increase of 76% to 101%.
The direct driver is the Brunei refinery project. The refined oil market in Southeast Asia has long been supply-constrained, and spreads widened significantly in early 2026. The Brunei refinery benefits from local tax incentives, market-based pricing, and low freight and insurance costs, achieving full production and sales with high per-ton profitability. As the only Chinese chemical fiber company with an overseas refinery, Hengyi has captured an irreplaceable first-mover advantage in this regional market dividend.
Three Major Projects Reshaping the Industrial Landscape
Alongside profit growth, Hengyi is advancing three strategic projects with ambitions far beyond the current cycle.
Brunei Phase II has been fully launched, with an optimized design capacity of 12 million tons per year, producing diesel, PX, benzene, and other high-value products, targeting completion by end of 2028. Total refinery capacity will then reach 20 million tons per year. This is the only overseas capacity increment among private large-scale refineries in recent years.
Xinjiang coal-to-ethylene glycol project plans to produce 2.4 million tons of high-quality fiber-grade coal-to-ethylene glycol annually, expected to start production in H1 2028. Hubei Jingzhou recycling project plans a 300,000-ton demonstration facility using waste textiles as feedstock, with an 18-month construction period.
Upon completion, Hengyi will form a unique 'oil, coal, and fabric' integrated industrial structure, reducing dependence on crude oil and enhancing profit stability across the value chain.
Sustainability and Risks
A key question is whether the 23-fold profit surge is just a cyclical spike. The tight supply-demand in Southeast Asian oil markets is unlikely to reverse soon. PTA and polyester capacity has been substantially optimized, supporting sustained profitability improvement. Nylon projects are also ramping up. The full-year profit base may be permanently elevated.
However, risks remain. Crude oil price volatility could cause inventory write-downs and narrow crack spreads. Brunei Phase II and coal-to-ethylene glycol projects are capital-intensive with long timelines, posing delays and funding risks. Concentration of refining capacity in Brunei exposes the company to policy and geopolitical changes. Weak downstream textile demand would also affect polyester margin recovery.