Oriental Shenghong's July 5 performance forecast shows net profit attributable to shareholders for the first half of 2026 is between 4.2 billion and 5.0 billion yuan, a year-on-year increase of 987% to 1194%. This figure directly declares that the polyester industry chain has completely turned around from the loss-making quagmire of two years ago.
The Industry Turning Point Behind the Data
Shenghong's profit structure is particularly worth examining. Q1 net profit was 1.432 billion yuan, while Q2 single-quarter profit climbed to 2.768 billion to 3.568 billion yuan, a sequential increase of 93% to 149%. This means that in just three months, profit scale nearly doubled. Compared to last year's low Q2 base, the year-on-year increase is an astonishing 60 to 78 times.
Shenghong's explanation in the announcement goes straight to the core: improved supply and demand in the petrochemical industry and rising crude oil prices have expanded product price spreads. The company has an annual PX capacity of 2.8 million tons and PTA capacity of 6.3 million tons, with a total aromatics chain capacity exceeding 10 million tons. This scale advantage directly translates into profit elasticity when spreads widen.
Dual Drivers: Geopolitics and Policy
Two key variables have driven this reversal in the polyester industry. The first is oil prices. The US-Iran conflict in early 2026 disrupted shipping through the Strait of Hormuz, pushing Brent crude from $61/barrel at the start of the year to $118/barrel in March, with the Q2 average stabilizing around $99/barrel. For domestic refining companies, diversified crude oil import channels have shielded them from single-source disruptions, making them beneficiaries of high oil prices.
The second variable is the industry's internal anti-involution process. Over the past two years, the PX-PTA-polyester filament chain was mired in overcapacity, with PTA once losing 200 yuan per ton. But in 2026, no new PTA capacity was added, and outdated capacity both domestically and internationally accelerated its exit, ceding market share to integrated leaders. Institutional research reports indicate that this round of expansion is nearing its end, and the supply-demand balance is expected to continue improving.
Transmission Chain and Subsequent Expectations
Shenghong's explosive performance is not an isolated case. Earlier, Hengyi forecasted a net profit increase of 2326% to 2546% year-on-year, although its overseas Brunei facility was a special factor. The simultaneous explosion of two leaders confirms the overall industry recovery. First-quarter reports from other polyester leaders were also impressive, and second-quarter performance is unlikely to be poor.
Current international oil prices have corrected after geopolitical tensions eased, but the structural benefits from anti-involution and outdated capacity clearance are just beginning to be released. For small and medium-sized enterprises without scale advantages, this round of reshuffling means further narrowing of living space; for leading companies with integrated refining capabilities, the profit inflection point may have just arrived.