A semi-annual performance forecast from a leading chemical fiber company is reshaping the market's imagination of 'cyclical stocks.' Hengyi Petrochemical announced that its net profit attributable to shareholders for the first half of 2026 is expected to reach between 5.5 billion and 6 billion yuan, a year-on-year increase of 2326% to 2547%. This figure not only far exceeds the industry average but also pushes the company to the forefront of value reassessment in the polyester industry chain.
Profit Explosion: Overseas Refining Assets as the 'Profit Engine'
The core driver of this profit surge is the Brunei refining project in Southeast Asia. According to public data, in Q1 2026, Hengyi achieved a net profit of 1.995 billion yuan, a 3774% year-on-year increase. In Q2, as supply and demand in the Southeast Asian refined oil market remained tight, the Brunei refinery's profit elasticity was further released, with quarterly net profit estimated between 3.5 billion and 4 billion yuan, a sequential increase of 76% to 101%.
This means the Brunei project not only benefits from the spread dividends caused by the long-term shortage of refined oil supply in the region but also enjoys structural advantages such as tax incentives, market-based pricing, and low freight and insurance costs. Against the backdrop of ongoing capacity consolidation in the PTA and polyester sectors, this overseas layout provides Hengyi with a significant profit buffer. For domestic peers, this 'refining plus chemical fiber' offshore integration model is creating a competitive barrier that is difficult to replicate.
Three Major Projects Pave the Way: From 'Refining Leader' to 'Oil, Coal, and Fabric Integration'
Beyond the high profit, the three strategic projects under construction deserve close attention from the upstream and downstream of the industry chain. These projects all point to a common goal: to break free from dependence on a single crude oil feedstock and build a more stable profit structure across the entire chain.
- Brunei Refining Phase II: Designed with an optimized capacity of 12 million tons per year, mainly producing high-value products like diesel, PX, and benzene. It is expected to be completed by the end of 2028. Upon completion, the total capacity of the Brunei refinery will reach 20 million tons per year, making it the only overseas capacity addition among private large-scale refiners 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, with expected production in the first half of 2028. This project will directly hedge against the impact of crude oil price fluctuations on raw material costs.
- Hubei Jingzhou Recycling New Materials Project: Aims to build a 300,000-ton annual production demonstration project for recycled new materials, using waste textiles instead of crude oil as feedstock, with a construction period of 18 months. This project aligns with the national 'dual carbon' policy and is expected to provide brand owners with compliant low-carbon raw material options beyond economic benefits.
From an industry logic perspective, once these three projects are realized, Hengyi will form a three-pronged feedstock structure of 'oil, coal, and fabric.' For downstream procurement companies, this means significantly improved stability and cost predictability of raw material supply in the future.
Industry Transmission: Can High Prosperity Continue?
The market's biggest question is whether this profit explosion is a fleeting cyclical pulse or a structural upward shift in the profit center.
From the supply side, the tight supply-demand balance for refined oil in Southeast Asia is unlikely to reverse in the short term, and the high profitability of the Brunei refinery is expected to last through the year. Meanwhile, the anti-involution process in the PTA and polyester industries is accelerating, with the capacity landscape showing substantial optimization, suggesting sustainable profit recovery. Coupled with the continuous ramp-up of the nylon project, the possibility of a permanent upward shift in the annual profit center is increasing.
However, risks cannot be ignored. A sharp drop in international crude oil prices would directly lead to inventory write-downs and narrowing refining spreads. The three major projects under construction involve massive investments and long construction periods, posing risks of delayed production or financial strain. Furthermore, the core refining capacity is concentrated in a single region in Brunei, where changes in host country policies or geopolitical environment could impact cost advantages and raw material supply stability. If downstream textile demand falls short of expectations, the pace of profit recovery in the polyester segment will also be hampered.