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Insight | Time:Nov 10 2017 2:03PM
Polyester industry enjoys good profits
 
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Polyester market showed very good in 2017. According to listed companies’ Q3 financial report, net profit margin on sales improved significantly compared with last year.

  Net profit margin on sales (%) Rate of return on total assets (%)
  Q1-Q3, 2016 Q1-Q3, 2017 Q1-Q3, 2016 Q1-Q3, 2017
Hengyi 2.5 3.2 1.9 4.8
Rongsheng 4 3 2.9 2.8
Tongkun 3.2 5 3.1 5
Xinfengming 2.8 5.6 3.9 9

Though their profits diverged, these enterprises all enjoyed a good rebound in this respect in recent two years.


To mention that in different quarters, the picture is quite different. Profit margin of Tongkun and Xinfengming, both of which converge on the polyester market sustained hiking in the three quarters while Hengyi and Rongsheng which also invest in petrochemical industry mildly declined.


For Rongsheng, the obvious fall of gross profit margin in aromatics and PTA, two of its main businesses were attributed to the relatively unsatisfactory performance in the first half of 2017.

Gross profit margin of some products in Rongsheng
  Aromatics PTA FDY DTY
31-Dec-15 36% 4% 8% 7%
30-Jun-16 30% 5% 7% 10%
31-Dec-16 28% 3% 9% 14%
30-Jun-17 17% 1% 10% 13%

And the impact of the falling profit margin lingered even to the third quarter. According to related report of Rongsheng, though its revenue distinctively increased, the operating cost jumped even further, pressing lower the profits of aromatic businesses. 

Rongsheng Q3 financial report
Project Revenue(yuan) Operating cost(yuan)
Till end-Q3 52,362,796,303.53 49,264,258,756.81
Till end-Q2 31,407,525,565.10 28,013,621,604.38
Change 66.72% 75.86%
Reasons Increase of revenue in aromatics and PTA trading of Zhejiang Yisheng Petrochemical Co.,Ltd., Rongsheng’s holding subsidiary and of Ningbo ZhongJin Petrochemical Co.,Ltd,, Rongsheng’s wholly-owned subsidiary. Increase in sales cost of Zhejiang Yisheng Petrochemical Co.,Ltd., Rongsheng’s holding subsidiary and of Ningbo ZhongJin Petrochemical Co.,Ltd,, Rongsheng’s wholly-owned subsidiary.


On the whole, the climate of polyester industrial chain sustains good, particularly the polyester market. PTA profit though showed good in the third quarter, could not compete with that of polyester in the first three quarters. On the other hand, the profit margin of aromatic business declined.
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