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)





Powered by IST's

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

**************************

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.

This is bad news under cover - directors bull-sh-tting

Be careful with this one, the China Petrochemcial sector is still in trouble, see the link below. If you are looking for Chinese companies who will benefit from the Stilumus, look to WCC (and also CHNS) is my view.


http://www.chinabidding.com/news.jhtml?method=detail&channelId=277&docId=3449489

Profits of China's Major Oil Companies Rise as Demand Recovers

Apr 25,2009

China's top five oil companies saw profits up 13.2 percent in March from the same period a year ago, as stimulus package pushed up energy demand, according to a report released by the China Petroleum and Chemical Industry Association (CPCIA).

Their March profits rose 160 percent from February to 28.25 billion yuan (4.15 billion U.S. dollars), according to the report released on Thursday.

The "top five" includes China National Petroleum Corporation, China Petroleum and Chemical Corporation, China National Offshore Oil Corp, Sinochem Corporation, and Shaanxi Yanchang Petroleum (Group) Co. Ltd.

The negative impacts of the global financial crisis on China's petrochemical sector was deepening, but the month-on-month figure showed signs of recovering as prices of some petrochemical products began to stabilize, said the report.

Analysts said the profit increase was due to the government decision to raise the prices of oil products. PetroChina's president Zhou Jiping said last month that the price rise would add 1.26 billion yuan of profits for the company every month.

However, the industrial value through January-March dropped 14 percent from a year ago, to 1.26 trillion yuan. The figure for March alone was 498.35 billion yuan, down 8.4 percent year on year, according to the report.

It is the first time in more than a decade that the petrochemical sector has seen declines in both industrial value and sales revenue. It is likely that the falling trend would continue in the second quarter, said Feng Shiliang, CPCIA deputy secretary.

He said the exports would continue to deteriorate, and the overcapacity would still be prominent.

HAIK is a proven lame duck.