In the first half of 2026, the polyester industry's profit landscape is being rewritten. Following Hengyi's explosive results, Shenghong has also released a staggering performance forecast: net profit attributable to shareholders is expected to reach 4.2 to 5 billion yuan, a year-on-year increase of 987.39% to 1194.51%. This marks a dramatic reversal from the 'involutionary losses' of the past two years.
Profit Explosion: From Losses to Tenfold Growth
Shenghong's announcement reveals that its Q2 2026 net profit is estimated between 2.768 and 3.568 billion yuan, a quarter-on-quarter increase of 93% to 149% and a year-on-year surge of 60 to 78 times. The company attributes this to improved supply-demand dynamics in the petrochemical industry, higher crude oil prices widening product spreads, and stable operations of its integrated refining and chemical projects.
Shenghong is not alone. Earlier, Hengyi reported a net profit increase of 2326.31% to 2546.88% for H1 2026. The simultaneous signals from two leading firms indicate a fundamental shift in the polyester industry's profit logic.
Dual Drivers: Oil Windfall and Anti-Involution Policies
Two forces are driving this profit surge. First, geopolitical tensions have boosted oil prices. The US-Iran conflict in early 2026 disrupted Hormuz Strait shipping, pushing Brent crude from $61/barrel in January to $118/barrel in March, with Q2 stabilizing around $99/barrel. China's diversified crude import channels made its refineries direct beneficiaries.
Second, anti-involution policies have accelerated capacity shakeout. Over the past two years, the PX-PTA-polyester filament chain suffered losses, with PTA losing 200 yuan per ton at its worst. In 2026, no new PTA capacity was added, while outdated capacity both domestically and overseas exited, ceding market share to integrated leaders. Institutional research suggests the industry expansion cycle is nearing its end, promising sustained supply-demand improvement.
Capacity Structure: Moat for Integrated Giants
Shenghong's capacity layout underpins its gains: 2.8 million tons/year of PX, 6.3 million tons/year of PTA, and over 1 million tons/year of pure benzene, with total aromatics chain capacity exceeding 10 million tons. This large-scale, low-cost, high-yield integrated structure ensures stronger benefits during industry recovery.
For the textile chain, upstream cost fluctuations directly impact downstream sectors like fabric and apparel. The profit explosion at Shenghong and Hengyi signals rising upstream bargaining power, forcing buyers to reassess cost pressures.
Outlook: Structural Challenges After Oil Price Correction
Crude oil prices have corrected after geopolitical tensions eased, but the benefits from anti-involution policies and capacity shakeout are just beginning. Even if the oil windfall fades, improved supply-demand dynamics may sustain profit levels. However, downstream firms should watch for increased upstream concentration, which could squeeze margins in weaving and dyeing.