Sharp rise this morning in this Chinese oil refinery company. Tipped over the weekend in Small Company Share Watch to be the next ReneSola. Changes in the way pricing operates since China joined WTO is set to change the company dramatically, plus results in the coming weeks could surprise on the upside.

www.haikechemical.com

Quarter 1 update

First Quarter 2007 Highlights

- Total revenues increased by 28% to US$ (or '$') 73.9m (2006Q1: $57.9m)

- Petrochemical revenues increased by 15% to $56.1m (2006Q1: $48.6m)

- Speciality chemical revenues increased by 87% to $17.0m (2006Q1: $9.1m)

- Biochemical revenues increased by 300% to $0.8m (2006Q1: $0.2m)

- Gross margin improved to 12.1% (2006Q1: 7.2%) to $8.9m (2006Q1: $4.1m)

- Net profit after tax increased by 625% to $5.8m (2006Q1: $0.8m)

- Net profit (after minority interests) increased by 650% to $4.5m
(2006Q1: $0.6m)





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it would be a great benefit to the end-users if the Chinese (and to some extent the Indians) started producing quality chemicals to spec! ..... time and time again, the stuff delivered is severely sub-standard and causes all sorts of problems ...... further proof that what looks cheap is often expensive.

the same can be said of their steel

http://www.bloomberg.com/apps/news?pid=20601089&sid=aCD53QGjW9Ec&refer=china

Sinopec Leads Decliners Among Asian Energy Stocks (Update1)

By Wang Ying

March 7 (Bloomberg) -- China Petroleum & Chemical Corp., Asia's biggest refiner, fell in Hong Kong trading and was the worst-performing stock in the MSCI AC Asia Pacific Energy Index on concerns that record crude costs will reduce earnings.

Sinopec, as China Petroleum is known, slumped as much as 8.1 percent to HK$7.53, the biggest drop of the day among the index's 50 members. Oil rose to a record $105.97 a barrel in New York overnight.

``Sinopec will see a drop in first-half profit due to record crude costs and the government's reluctance to raise fuel prices,'' Grace Liu, an oil analyst with Guotai Junan Securities Hong Kong Ltd., said by telephone from the southern city of Shenzhen.

Goldman Sachs Group Inc. cut Sinopec to ``neutral'' from ``buy'' in a research report today after raising its oil-price forecasts. China restricts Sinopec's ability to pass on soaring raw material expenses in a bid to shield the nation's 1.3 billion people from inflation.

The Beijing-based company's loss from turning crude oil bought at record prices into fuels sold under state controls was widest in December, January and February, Zhou Yuan, vice president at parent China Petrochemical Corp., said yesterday.

China Petrochemical will receive a government subsidy to help cover its refining losses, Zhou said in an interview in Beijing. The state will pay ``a certain amount'' to the refiner because the state-owned company has shouldered ``social responsibility'' to ensure fuel supplies.

Price Increase `Improbable'

The listed unit received a 9.42 billion yuan ($1.3 billion) subsidy in 2005 and 5 billion yuan in 2006 to compensate it for soaring raw material costs. Zhou was unable to say whether the latest subsidy will be reflected in Sinopec's financial accounts.

The prospect of China raising fuel prices this year ``is increasingly improbable,'' Goldman analysts including Kelvin Koh said in today's report.

Benchmark New York oil prices have jumped 71 percent in the past 12 months, increasing the bill Sinopec must pay for importing most of its raw material.

PetroChina Lanzhou Petrochemical Co., a unit of the nation's largest oil company, is losing 1 billion yuan a month processing crude because prices for the commodity are above $100 a barrel, a company official said.

Controls on fuel prices to curb inflation mean that the refinery needs crude to cost less than $60 a barrel for its oil processing operation to be profitable, Yu Baocai, Lanzhou Petrochemical's general manager, said today in Beijing. The plant, in Western China's Gansu province, lost 4 billion yuan refining oil last year. The refinery is owned by PetroChina Co.

The future for the "specialist chemical side" also looks full of competiton, more and more competion and suppliers.....

http://www.purchasing.com/article/CA6539321.html

Petrochem capacity expansions coming for China

Shanghai Petrochemical aims to increase production by 450,000 metric tons
By Dave Hannon -- Purchasing, 3/7/2008 8:48:00 AM

If the Chinese government gives the green light, Shanghai Petrochemical will expand its ethylene capacity by 450,000 metric tons. If approved, the total ethylene capacity at an existing unit from 150,000 metrics tons to 600,000.

Shanghai Petrochemical President Rong Guangdao told Reuters recently that Supply and demand of fuels in our country is more or less balanced, but there are shortages of petrochemicals. So we are focused on expanding this output, but to do this you also have to expand your refining capacity."

The move is only the latest in a recent onslaught of capacity expansions and joint ventures aimed at increasing Chinas petrochemical output. Also this week, Chinas biggest chemical refiner Sinopec Group said it would by a 60% stake in Australias AED Oils Puffin and Talbot oilfields in the Timor Sea.

China National Petroleum Corp., the country's largest oil and gas producer by capacity, has signed a memorandum of understanding with a unit of state-owned Qatar Petroleum to set up a petrochemical plant in China with an annual production capacity of 1 million metric tons, reports MarketWatch.

And Saudi Aramco, Saudi Arabia's state-owned oil company, said this week it will take a 50% stake in a $1.8 billion oil refinery that Sinopec is building.

The troubles of costs and losses is known, but the interesting thing, like in the Daqing story, is that they are all getting more into the chemicals side, and expanding the chemcials side. Which can only mean before too long the chemicals side prices will collapse on far too much supply, so they will all be back to square one and struggling with margins and profits again.




http://www.chinatradeinformation.net/china-trade-news/petrochina-unit-refining-loss-is-140-million-a-month.html

PetroChina Unit Refining Loss Is $140 Million a Month

PetroChina Lanzhou Petrochemical Co., a unit of the nations largest oil company, is losing 1 billion yuan ($140 million) a month processing crude because prices for the commodity are above $100 a barrel, a company official said.

Controls on fuel prices to curb inflation mean that the refinery needs crude to cost less than $60 a barrel for its oil processing operation to be profitable, Yu Baocai, Lanzhou Petrochemicals general manager, said today in Beijing. The plant, in Western Chinas Gansu province, lost 4 billion yuan refining oil last year.

Chinas curbs on fuel prices limit the ability of PetroChina Co. and China Petroleum & Chemical Corp., or Sinopec, its two biggest refiners, to pass on the rising cost of crude oil, their main raw material. Sinopecs parent said yesterday there have beenhuge losses at the groups refineries.

Chinas refineries are facing extremely high operational pressures on record crude costs, Grace Liu, an oil analyst with Guotai Junan Securities Hong Kong, said by telephone from the southern city of Shenzhen.

While the plant is losing money processing crude, it posts a profit of about 300 million yuan a month on its petrochemical business, Yu said. Chemical sales help to pare the refinerys monthly loss to about 700 million yuan, he said.

Different to Sinopec

Unlike Sinopec, PetroChinas refining losses can be offset by its profitable upstream business and we still estimate PetroChinas profit will rise in the first half of this year,Liu said.

Benchmark crude oil in New York was at $105.38 a barrel in after-hours electronic trading at 12:04 p.m. Beijing time. Yesterday, futures settled at $105.47, the highest close since trading began in 1983, and earlier touched a record $105.97.

Lanzhou Petrochemical will reduce capacity by between 400,000 and 500,000 metric tons in May for maintenance lasting about a month, Yu said while attending parliamentary sessions in Beijing.

The refinery processed 10.56 million tons of crude oil last year, and will maintain similar volumes in 2008, Yu said. Production of ethylene, a key raw material for plastics, will rise about 3 percent to 700,000 tons.

PetroChina will complete an oil-product pipeline from Lanzhou to Zhengzhou in central Chinas Henan province by end of this year, Yu said. Almost all Lanzhou Petrochemicals oil products could be transported by pipeline next year.

PetroChina Petroleum Sinopec

This entry was posted on Friday, March 7th, 2008 at 10:19 pm and is filed under China Trade News. You can follow any responses to this

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http://news.tradingcharts.com/futures/0/9/106096990.html

Daqing Petrochemical Lost CNY2bn in Oil Refining




DAQING, Mar 14, 2008 (SinoCast via COMTEX) -- PetroChina Daqing Petrochemical Company, an affiliate of the country's oil titan China National Petroleum Corporation (CNPC), suffered a CNY 2 billion loss in its oil refining business in 2007, revealed the general manager, Mr. Yang Jigang.

Currently, the international crude oil prices are on the surge and the Chinese Central Government requires that related companies and institutions should not lift prices of crude oil, natural gas, electric power, as well as public utility recently. Therefore, Daqing Petrochemical, as one of CNPC's key oil refineries, has to face more pressure.

The general manager added that the company had planned not to cut production, with a view to ensuring a stable refined oil supply and narrowing the price inversion. In addition, Daqing Petrochemical wants to produce more high value-added chemicals in the near future, and then further upgrade its profitability.

At the end of 2007, it started creating a 1.2-million-ton ethylene extension project in Daqing, a major oil-refining city in northeast China. With a total investment of CNY 14 billion, this project is regarded as an important part of Daqing City's long-term development scheme.

On June 1, 2007, the National Development and Reform Commission, China's macro-economy regulator, officially allowed Daqing Petrochemical to upgrade its 1.2-million-ton ethylene project, which is forecasted to see its annual ethylene production capacity grow to 1.2 million tons, including existing 600,000 tons.

Meanwhile, the company will build five facilities of 300,000-ton polypropylene, 600,000-ton pyrolysis gasoline hydrogenation catalyst, 400,000-ton aromatic hydrocarbon, as well as 250,000-ton and 300,000-ton polyethylene with various density.

Benefiting from the abundant light hydrocarbon lying around Daqing City and a 12-million-ton oil refining capacity of Daqing Petrochemical, the foregoing project will introduce advanced technologies from overseas, said people familiar with the matter.

The builder is expected to see its yearly sales revenue and after-tax income separately enlarge CNY 7.97 billion and CNY 920 million, after putting the project into production. Besides, its profitability and after-tax yield will likely rise 14.34% and 13.03%, respectively.

Now, the country's fast-growing economy spurs an urgent demand for oil and chemical products, and thus Daqing Petrochemical is to boost its production capacity and cater to more market needs, on the strength of the project under construction.

Previously, PetroChina Co., Ltd. (SHSE: 601857;SEHK: 0857; NYSE: PTR), as an important listed arm of CNPC, promised to aggregately pour CNY 6 million into Daqing Petrochemical's 1.2- million-ton ethylene extension project.

BASF news item just out.

HAIK will be announcing results next Monday, I feel the results would be undesirable.

I agree hlyeo98, what a crip set if results.

91p now.

106p/110p now.

Good volume today, must be expecting good results in the morning.

Things to watch for Q1 results :

General :

Q4 07 Gross Profit Margin was 9.78% Q1 08 = ??? (Should go up)


Working cap and cash :

Q4 07 Inventory Levels were 44.858m Q1 08 = ??? (Should do down)

Q4 07 Trade Receivables were 27.862m Q1 08 = ??? (Should go down)

Q4 07 Cash level was 24.319m Q1 08 = ??? (Should go up)


Debts :

Q4 07 Short term debts were 82.453m Q1 08 = ??? (Should go down)

Q4 07 T/O payables were 41.039m Q1 08 = ??? (Should go down)


Will they have been reducing debt, reducing outstanding payables, reducing receivables and inventories and building cash ???????? or have they been increasing debt, increasing payables and also increasing working cap and reducing cash levels again ?


Soon to find out.

Thanks pp and hlyeo98, saved me a few hundred quid.

Good increase in chemical side profit and margin. Need a good read of the detail...

Results, gross profit margin down. Debts higher, inventories higher, trade receivables higher.......

Pretty damn poor........as was expected.

Frightening when you read this. When other companies go to quarterly reporting for more transparency, HAIK now go away from quarterly reporting.

What is their to hide ahead, must be the question..................no need to change unless you know unpleasant things are coming imo.


The Company has decided that it will be moving to half yearly reporting with effect from the interim results for the six months ended 30 June 2008.

Yes, that is pretty frightening. Glad I'm not holding.

This was a simple short...now 66p. How could this be the next ReneSola???

Its an awful situation.

Do not know how so many got away with trying to ramp it up.

Down through 50p soon ?

RNS Number : 7191Z
HaiKe Chemical Group Ltd.
23 July 2008


Trading update


HaiKe Chemical Group Ltd ('HaiKe' or the 'Company'), the AIM quoted (AIM: HAIK) petrochemical, speciality chemical and biochemical business based in China, today announces that it is temporarily shutting down its oil refinery facilities for a major overhaul.

As a result of consistently high oil prices and in the absence of further price adjustment notices for oil products, the margins of the petrochemical side of the business have reduced to a level at which operations are not profitable. The Directors of HaiKe have therefore determined that now is an appropriate time for essential maintenance to be carried out, which will involve a complete shut-down of the refining operations and help reduce the Company's exposure to further risk at this current time.

The Company does not anticipate any near-term increases in the price of refined oil products. However, the Directors of HaiKe do expect further price adjustments to be announced by the PRC National Development and Reform Commission prior to the end of the current financial year. As a result, the Directors of HaiKe expect oil refining operations to resume during the current financial year, following an increase in the price of refined oil products.

However, with the majority of privately-owned refiners in China having either already ceased operations or being in the process of doing so, the Company will closely monitor the market situation and determine the most opportune time to resume operations.

This shut-down of the refining operations will enable senior management of the Company to focus their energy on the operation and management of the speciality chemical and biochemical businesses, which have been the largest contributors to profit during this financial year. These businesses will not be impacted by the closure of the refining operations and the Directors' expectations for the financial performance for this division, in the current financial year, remain unchanged.

With this temporary shut-down, the Company expects debt levels to fall back from their increased June 2008 level. As a result of the shut-down, future capital expenditure plans for the petrochemical side of the business have been deferred; however, speciality chemical expansion plans will continue as previously announced.