2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Hengyi Petrochemical
Annual Report 2020
1
This document is a translated version of the Chinese version 2020 Annual Report (“2020 年年度报告全文”), and the published annual report in the
Chinese version shall prevail.
The complete published Chinese 2020 Annual Report may be obtained at http://www.cninfo.com.cn.
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Chairman's Statement
2
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Chairman's Statement
Looking back at 2020, it was an extremely extraordinary, unusual and difficult year for every country, region,
company and individual. Confronted with the sudden outbreak of the once-in-a-century coronavirus pandemic, all
Hengyi staff have made their concerted efforts and demonstrated their solidarity and resilience. They are not
afraid of difficulties and never shrink from challenges. They seize the day and live it to the full. They keep forging
ahead with entrepreneurial passion and strength, and achieve encouraging results in 2020.
Over the past year, we planned ahead and took all factors into consideration, we shouldered responsibility with
persistence and dedication, we protected life and guaranteed production, we took actions to save time and
maintain profitability. With all these efforts, we have enabled the Group to continue its rapid growth, and
completed all the targets in Hengyi’s strategy.
Over the past year, we made efforts in achieving further progress; we adhered to the overall strategy of engaging
in refinery, polyester and polyamide industries; we promoted the construction of Hengyi (Brunei) PMB
Petrochemical Project Phase II and major domestic projects; we put Haining Hengyi’s 1MMTA Differential
Environmental Protection Functional Fiber project into production, which further highlighted the advantage of
integrated operation of full industry chain.
Over the past year, we persevered with our goals regardless of adverse external factors; we enhanced the leading
role of digital intelligence; we increased investment in scientific research; we put new Hengyi Research and
Development Center formally into use; we achieved many major breakthroughs in scientific research relying on
the R&D platform developed by Hengyi together with Zhejiang University, Donghua University, Nanjing Tech
University, etc. Three manufacturing enterprises of Zhejiang Shuangtu New Materials, Hangzhou Yijing and
Jiaxing Yipeng have been certified as National High-tech Enterprises.
Look back at 2020, we should say our achievements did not come easily. None of these achievements would have
been possible without the hard work and contribution of all our staff, the tolerance and understanding of all their
family members, and the care and support of leaders at all levels and friends from all sectors. Here, I would like to
extend my sincere thanks and highest respect to all of you!
What's past is prologue. The new year brings new hope, and new journey experiences new dream. The year of
3
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2021 marks the 100th founding anniversary of Communist Party of China. We have set out the grand vision for
high-quality development in the next five years, and made “1-2-6” strategy implementation plan focused on the
construction of 1 platform, 2 centers, and 6 bases, and set the target of becoming a world-class petrochemical
group.
Even though tremendous success has been gained, we still have a long way to go since the worldwide pandemic
has not been quelled yet, the international situation is still complex and the market competition is becoming more
intense. Therefore, we shall remain resolve, assume responsibility, and forge ahead. Instead of aiming too high or
underestimating our own capabilities, we shall lay a solid foundation for Hengyi!
Chairman: Qiu Yibo
4
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section I Important Notes, Contents and Interpretation
The board of directors, Supervisory Committee, Directors, Supervisors and
Senior Management of the Company guarantee that the contents of the 2020
Annual Report (hereinafter referred to as "the Report") are true, accurate and
complete, free from false records, misleading statements or major omissions, and
bear individual and joint legal liabilities.
The financial report of the Report has been audited by Zhongxinghua
Certified Public Accountants LLP and a standard unqualified audit report has
been issued.
Qiu Yibo, head of the Company, Mao Ying, person in charge of the
accounting work, and Wu Zhen, head of the accounting body (accountant in
charge), declared that they would ensure the truthfulness, accuracy and
completeness of the financial report in this Report.
This Report has been deliberated and approved at the 8th meeting of the
11th Board of Directors of the Company. All Directors have attended the Board
meeting at which this Report was deliberated.
The profit distribution plan approved by the Board of Directors is as
follows: Based on the base of 3,681,645,407, a cash dividend of RMB3 (including
tax) will be distributed to all shareholders for every 10 shares, no bonus shares
will be distributed, and no common reserve fund will be converted into share
capital. If the total share capital of dividend-paying date of record changes due
5
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
to additional issuance, repurchase of shares and conversion of convertible bonds
before the Company pays dividends to date of record, the Company plans to
maintain the distribution ratio unchanged and adjust the corresponding total
share capital. The profit distribution plan for 2020 shall be submitted to the
2020 General Meeting of Shareholders for deliberation and approval.
Forward-looking statements such as future plans, development strategies,
industry discussions and prospects involved in this Report do not constitute the
Company's substantive commitment to investors. Please pay attention to
investment risks. This Report describes in detail the main risks currently faced
by the Company and the countermeasures. Please refer to the relevant contents
in Section IV.
6
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Table of Contents
Section I Important Notes, Contents and Interpretation ...................................................................... 5
Section II Company Profile and Main Financial Indicators .............................................................. 11
Section III Business Summary ........................................................................................................... 18
Section IV Discussion and Analysis of Business Situation ............................................................... 32
Section V Important Matters ............................................................................................................ 108
Section VI Changes in Shares and Shareholders ............................................................................. 152
Section VII Preference Shares Relevant Situation ........................................................................... 167
Section VIII Relevant Situation of Convertible Corporate Bonds ................................................... 168
Section IX Directors, Supervisors, Senior Management and Employees ........................................ 172
Section XIII Catalogue of Documents for Reference ...................................................................... 405
7
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Definitions
Item Refers to Definitions
Hengyi Petrochemical,
Refers to Hengyi Petrochemical Co., Ltd.
Company, the Company
Shenzhen Stock Exchange,
Refers to Shenzhen Stock Exchange
the exchange
Hengyi Group Refers to Zhejiang Hengyi Group Co., Ltd.
Hengyi Limited Refers to Zhejiang Hengyi Petrochemicals Co., Ltd.
Hengyi Brunei Refers to Hengyi Industries Sdn Bhd
Zhejiang Yisheng Refers to Zhejiang Yisheng Petrochemical Co., Ltd.
Yisheng New Materials Refers to Zhejiang Yisheng New Materials Co., Ltd.
Yisheng Dahua Refers to Yisheng Dahua Petrochemical Co., Ltd.
Hainan YISHENG Refers to Hainan YISHENG Petrochemical Co., Ltd.
Hengyi polymer Refers to Zhejiang Hengyi Polymer Co., Ltd.
Hengyi Hi-tech Refers to Zhejiang Hengyi High-tech Materials Co., Ltd.
Haining New Materials Refers to Haining Hengyi New Materials Co., Ltd.
Haining Thermoelectric Refers to Haining Hengyi Thermoelectricity Co., Ltd.
Guangxi Hengyi New
Refers to Guangxi Hengyi New materials Co., Ltd
Materials
Taicang Yifeng Refers to Taicang Yifeng Chemical Fiber Co., Ltd.
Jiaxing Yipeng Refers to Jiaxing Yipeng Chemical Fiber Co., Ltd.
Shuangtu New Materials Refers to Zhejiang Shuangtu New Materials Co., Ltd.
Hangzhou Yichen Refers to Hangzhou Yichen Chemical Fiber Co., Ltd.
Shaoxing Hengming Refers to Shaoxing Keqiao Hengming Chemical Fiber Co., Ltd.
Suqian Yida Refers to Suqian Yida New Material Co., Ltd.
Ningbo Hengyi Trade Refers to Ningbo Hengyi Trading Co., Ltd.
8
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Item Refers to Definitions
Hangzhou Yijing Refers to Hangzhou Yijing Chemical Fiber Co., Ltd.
Hengyi Caprolactam Refers to Zhejiang Baling Hengyi Caprolactam Co., Ltd
China Zheshang Bank Refers to China Zheshang Bank Co., Ltd.
Yisheng Investment Refers to Dalian Yisheng Investment Co., Ltd.
Hong Kong Tianyi Refers to Hongkong Tianyi International Holding Co., Ltd.
Hengyi Investment Refers to Hangzhou Hengyi Investment Co., Ltd.
Hengyi Polyamide Refers to Zhejiang Hengyi Polyamide Co., Ltd.
Dongzhan Shipping Refers to Dongzhan Shipping Co., Ltd.
Fulida Group Refers to Fulida Group Holding Co., Ltd.
Xinghui Chemical Fiber Refers to Xinghui Chemical Fiber Group Co., Ltd.
Brunei Refining and
Petrochemical projects invested and built by the
Petrochemical Project, PMB Refers to
Company in Brunei
Petrochemical Project
P-xylene, colorless transparent liquid, used in the
PX Refers to
production of plastics, polyester fibers and films
Purified terephthalic acid, mainly used to produce
PET, can also be made into engineering polyester
PTA Refers to
plastics, and be used as the raw material of plasticizer
and dye intermediate.
Iso-phthalic acid, mainly used in the production of
alkyd resin, unsaturated polyester resin and other
PIA Refers to polymers and plasticizers, as well as in the
production of film finishers, coatings, polyester fiber
dyeing modifiers and medicines.
Ethylene glycol, mainly used to produce polyester
fiber, antifreeze, unsaturated polyester resin,
MEG Refers to
lubricant, plasticizer, nonionic surfactant and
explosives, etc.
9
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Item Refers to Definitions
Polyethylene terephthalate, a fiber-forming polymer
prepared by direct esterification and continuous
PET, Polyester Refers to
polycondensation reaction of PTA and MEG as raw
materials
POY Refers to Pre-oriented yarn or partially oriented yarn
Fully drawn yarn, also known as polyester drawn
FDY Refers to
yarn
Draw textured yarn, also known as polyester textured
DTY Refers to
yarn
Caprolactam, mainly used to produce polyamide
CPL Refers to fiber, engineering plastics, plastic film, etc. It is
widely used in industrial and civil fields
Varieties that are innovative in technology or
Differential yarn Refers to performance or have certain characteristics and are
different from conventional yarns
Yuan, RMB10,000 Refers to RMB yuan and RMB 10,000
Reporting period/during
reporting period/this Refers to From January 1, 2020 to December 31, 2020
reporting period
End of reporting period/end
of the current reporting Refers to As of December 31, 2020
period
10
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section II Company Profile and Main Financial Indicators
I. Company Profile
Stock abbreviation Hengyi Petrochemical Stock code 000703
Abbreviation of the changed stock (if any) N/A
Stock exchange Shenzhen Stock Exchange
Chinese name 恒逸石化股份有限公司
Chinese abbreviation 恒逸石化
Foreign name (if any) HENGYI PETROCHEMICAL CO., LTD.
Foreign abbreviation HYPC
Legal Representative Qiu Yibo
No.G, 7/F, Haifu Building, No.16 West Beihai Avenue,
Place of registration
Beihai City, Guangxi Zhuang Autonomous Region
Postal code of the registered address 536000
Building 3, Hengyi Nan'an Mingzhu, 260 North Shixin
Office address Road, Xiaoshan District, Hangzhou City, Zhejiang
Province
Postal code of office address 311215
Company website http://www.hengyishihua.com
E-mail hysh@hengyi.com
II. Contact Person and Contact Information
Secretary of the board Securities representative
Name Zheng Xingang Chen Shasha
Board of Directors Office, 16/F, Building Board of Directors Office, 16/F, Building
Contact 3, Nan'an Mingzhu, No. 260 North Shixin 3, Nan'an Mingzhu, No. 260 North Shixin
address Road, Xiaoshan District, Hangzhou City, Road, Xiaoshan District, Hangzhou City,
Zhejiang Province Zhejiang Province
Tel (0571) 83871991 (0571) 83871991
11
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Fax: (0571) 83871992 (0571) 83871992
E-mail hysh@hengyi.com hysh@hengyi.com
III. Information Disclosure and Place of Preparation
Name of the information disclosure media China Securities Journal, Securities Times,
selected by the Company Shanghai Securities News and Securities Daily
The website address of the website designated
http://www.cninfo.com.cn/
by the CSRC for publishing the annual report
Place where the Company's annual report is Office of Board of Directors of Hengyi
prepared Petrochemical Co., Ltd.
IV. Registration Changes
Organization Code 9145050019822966X4
Changes in the Company's main business since listing (if any) No changes
Previous changes of controlling shareholders (if any) No changes
V. Other Relevant Information
The accounting firm engaged by the Company
Name of accounting firm Zhongxinghua Certified Public Accountants LLP
15/F, East Tower, No.1 Fuwai Street, Xicheng District,
Office address of accounting firm
Beijing
Signature name of accountants Liu Hongyue, Wang Guohai
Sponsor institutions engaged by the Company to perform continuous supervision duties
during the reporting period
Name of sponsor Office address of sponsor Name of sponsor Continuous
institution institution representative supervision period
CITIC Securities No.48 Liangmaqiao Road, Mao Zongxuan, Xu January 2021 -
CO., LTD Chaoyang District, Beijing Rui December 2021
Financial consultants engaged by the Company to perform continuous supervision duties
12
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Indicators
Does the Company need to retroactively adjust or restate the accounting data of previous
years
√ Yes □ No
Reason for retrospective adjustment or restatement
Combination of businesses under common control
Increase/dec
rease of this
2019 year over 2018
2020 the previous
year
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Operating income
86,429,630,191.87 79,620,543,631.74 79,620,543,631.74 8.55% 88,065,815,535.96 88,065,815,535.96
(Yuan)
Net profit
attributable to
shareholders of 3,071,998,839.75 3,201,348,425.33 3,190,185,517.79 -3.70% 1,872,494,729.34 1,872,494,729.34
the listed
company (Yuan)
Net profit after
deducting
non-recurring
gains and losses
2,479,101,027.63 2,725,438,479.51 2,725,438,479.51 -9.04% 1,536,880,249.17 1,536,880,249.17
attributable to
shareholders of
the listed
company (Yuan)
Net cash flow
from operating 5,013,772,777.95 -112,081,728.16 -91,125,777.91 5,602.04% 1,607,078,608.23 1,607,078,608.23
activities (Yuan)
Basic earnings
1.08 1.13 1.13 -4.42% 0.76 0.76
per share
Diluted earnings
1.07 1.13 1.13 -5.31% 0.76 0.76
per share
Weighted average
12.56% 14.73% 14.54% -1.98% 12.29% 12.29%
ROE
13
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Increase/dec
rease at the
end of this
End of 2019 year over End of 2018
End of 2020 the end of
the previous
year
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Total assets
92,260,268,155.54 85,230,757,616.78 85,763,292,709.24 7.58% 61,834,734,496.64 61,834,734,496.64
(Yuan)
Net assets
attributable to
shareholders of 24,006,633,612.78 23,253,008,414.00 23,741,845,506.46 1.12% 18,363,073,231.64 18,363,073,231.64
the listed
company (Yuan)
Main reasons for the change:
Cash flow from operating activities increased significantly: During the reporting period, the
net cash flow from operating activities increased significantly after the Brunei project was put into
production in November 2019. The occupation of operating funds rose. When it was put into
production near the end of the year, the operating cash outflow was affected by settlement and the
corresponding operating cash inflow was not received, resulting in negative net operating cash flow
in 2019. During this reporting period, with the Brunei Project maintaining high load and stable
operation, the net operating cash flow of the Company substantially improved. For details, please
refer to "Section IV Discussion and Analysis of Operation".
The Company's net profit before and after deducting non-recurring gains and losses in the
last three fiscal years is negative, and the audit report of the last year shows that the
Company's going concern ability is uncertain.
□Yes √No
The lower of net profit before and after deducting non-recurring gains and losses is negative
□Yes √No
14
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
VII. Differences between accounting data under the domestic and foreign accounting
standards
1. Differences in the net profit and net assets in the financial statements which are presented
concurrently in accordance with the international accounting standard and the Chinese
accounting standard
No differences in the net profit and net assets in the financial statements which are presented
concurrently in accordance with the international accounting standard and the Chinese accounting
standard during the reporting period.
2. Differences in the net profit and net assets in the financial statements which are presented
concurrently in accordance with foreign accounting standard and the Chinese accounting
standard
No differences in the net profit and net assets in the financial statements which are presented
concurrently in accordance with foreign accounting standard and the Chinese accounting standard
during the reporting period.
VIII. Quarterly Main Financial Indicators
Currency Unit: RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 18,872,535,104.97 20,541,889,288.67 21,906,722,601.01 25,108,483,197.22
Net profit attributable to the
811,550,417.16 1,090,756,257.98 1,154,405,533.02 15,286,631.59
shareholders of the company
Net profit after deducting
non-recurring gains and losses
729,510,068.79 1,026,027,096.40 994,305,397.12 -270,741,534.68
attributable to shareholders of the
listed company
Net cash flow from operating
543,694,408.55 925,772,901.47 1,318,266,768.96 2,226,038,698.97
activities
Whether the aforesaid financial indicators or their sum are significantly different from the
15
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
financial indicators related to the quarterly and semi-annual reports disclosed by the
Company
□Yes √No
IX. Non-recurring Profit and Loss Items and Amounts
Currency Unit: RMB
Item Amount in 2020 Amount in 2019 Amount in 2018 Notes
Profit or loss from the disposal of non-current
assets (including the write-off of asset -6,741,262.61 -1,811,565.51 2,249,652.18
impairment provision)
Tax refund or exemption approved ultra vires or
12,921,483.38 5,957,948.27 7,979,386.68
without any formal approval
Government grants recorded into current profit
and loss (except for those are closely related to
Company business and are enjoyed in a fixed or 318,607,292.74 420,716,519.76 102,224,764.73
quatitative basis in accordance with unified
national policiesstandard)
Current net profit or loss from subsidiaries
formed by business combination under common
19,376,584.76 36,175,922.94 161,261,977.54
control, from period-beginning to acquisition
date
Profit or loss from contingencies irrelevant to
0.00 -2,173,136.66 -118,450.84
normal business operations of the Company
The gains or losses arising from the fair value
changes of held-for-trading financial assets,
derivative financial assets, held-for-trading
487,752,983.95 301,297,013.33 187,235,582.94
financial liabilities, and derivative financial
liabilities, as well as investment gain received
from the disposal of held-for-trading financial
16
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
assets, derivative financial assets,
held-for-trading financial liabilities, derivative
financial liabilities and other debt investments,
except for effective hedging transactions that are
related to the Company’s ordinary business
Profit or loss from entrusted loans 41,586,615.56 29,136,336.48 36,538,791.66
Income from entrusted operation 1,698,113.20 1,698,114.17 4,622,641.50
Other non-operating income and expense in
-6,299,334.89 -14,994,635.24 4,640,725.70
addition to the above
Other profit or loss that complies with the
2,595,730.83 -2,065,748.97 5,731,998.98
definition of non-recurring profit and loss
Less: effect of income tax 215,685,156.22 139,947,035.37 137,414,288.03
Influenced amount of the minority
62,915,238.58 169,242,694.92 39,338,302.87
shareholders' equity (after-tax)
Total 592,897,812.12 464,747,038.28 335,614,480.17 --
For the non-recurring gain or loss items determined by the Company in accordance with the
definition provided in the Explanatory Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public-Non-recurring Profits and Loss, and for
the Company’s classification, as recurring items, of the non-recurring gain or loss items
enumerated in the Explanatory Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public-Non-recurring Profits and Loss, the
relevant reasons should be explained.
During the reporting period, there was no case of defining the listed non-recurring profit and
loss items as recurring profit and loss items according to the definition of Explanatory
Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public-Non-Recurring Profits and Loss.
17
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section III Business Summary
I. Main businesses of the Company during the reporting period
The Company shall comply with the disclosure requirements of Shenzhen Stock Exchange
Industry Information Disclosure Guidelines No.18-Listed Companies Engaged in Chemical
Industry Related Business.
i. Overview of the Company's main businesses during the reporting period
Hengyi Petrochemical (stock code: 000703) is committed to developing into one of the leading
petrochemical industry groups in China and the first-class in the world. Continue to enhance the
Company's comprehensive competitiveness through resource sharing and industrial coordination.
Under the guidance of the development strategy of "crude oil, polyester and polyamide", the
Company, relying on Brunei Refining and Petrochemical Project, has stepped up its efforts in
internationalization, lined up the "last kilometer" of the whole industrial chain from oil refining to
chemical fiber, realized a highly matched columnar balanced integrated industrial chain in the
upstream, midstream and downstream, and formed a unique "petrochemical +" multi-level
three-dimensional industrial layout with "polyester + polyamide" double-fiber driven petrochemical
industrial chain as the core business, supply chain service business as the growth business, and
differential fiber products and industrial intelligent technology application as the emerging business.
1. Petrochemical chemical fiber business
(1) One of the world's leading "refining & petrochemical-chemical fiber" industrial
chain integration leaders
During the reporting period, the Company's unique industrial layout of "crude oil, polyester
and polyamide" continued to improve. In the context of scientific pandemic prevention and smooth
production and operation, the Company maintains high-load and stable operation throughout the
year, and demonstrates its strengths in polyester industry expansion, quality improvement, PTA
industry potential tapping and transformation, and refining and chemical industry full production.
Besides, the Company uncovers its integrated, balanced and internationalized operation mode of
industrial chain. The Company has developed into one of the world's leading enterprises integrating
18
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
the industrial chain of "crude oil-PX-PTA-polyester" and "crude oil-benzene-CPL-polyamide".
Upholding the strategic development policy of "consolidating, highlighting and enhancing the
competitiveness of its main business", the Company focuses on its main business, continuously
increases investment in product research and development and industrial intelligent technology, and
enhances its comprehensive competitive advantage, thereby ranking in the forefront of the industry
for many years.
During the reporting period, the Company joined hands with strategic partners to realize
complementary advantages, continuously extend the petrochemical industry chain, enrich product
categories and further improve the product structure, effectively consolidate the core
competitiveness of the main business, strengthen the profitability of products and improve the
ability to resist market risks. The Company's main products include gasoline, diesel oil, kerosene
and other refined oil, liquefied petroleum gas (LPG), etc. Petrochemical products such as p-xylene
(PX), benzene, purified terephthalic acid (PTA) and caprolactam (CPL); polyester preoriented yarn
(POY), polyester draft yarn (FDY), polyester elastic yarn (DTY), polyester staple fiber, polyester
(PET) chips, polyester bottle chips and other chemical fiber products are widely used to meet the
rigid requirements of the national economy and people's livelihood.
19
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Fig. 2 Company Layout of Petrochemical and Chemical Fiber Industry Chain
Petroleum Refining integration
Refined oil Olefin Arene
Oil refining
Gasoline Diesel oil Kerosene Propylene Ethylene P-xylene Benzene
Polypropylen Polythylene Ethylene glycol Pure terephthalic acid Caprolactam
Petrochemical
e
Polythylene terephthalate Polyamide
Polyamide
Poluamide
industry
industry chain
chain
Chemical fiber Bottle chip Polyamide chip
Polyester filament yarn Polyester filament yarn Polyamide short fiber
Draw texturing yarn
Indicate the domestic business
Weaving fields (such as textile, garment and home textiles)
Indicate the Brunei business
Indicate the future business
Indicate downstream use
Note: Polyamide chips are products operated by Hengyi Group, the controlling shareholder.
As of the disclosure date of this report, the Company's designed crude oil processing capacity
is 8 million tons/year, and it has been disclosed that the Company plans to add 14 million tons/year
of crude oil processing capacity; the PTA production capacity of participating holding companies is
13 million tons/year, and the new PTA production capacity under construction is planned to be 6
million tons/year; the capacity of PIA is 300,000 tons/year, and the capacity of CPL (caprolactam)
is 400,000 tons/year; the polyester fiber production capacity is 7.5 million tons/year, and the new
polyester fiber production capacity under construction is 750,000 tons/year; the production capacity
of polyester bottle chips is 2 million tons/year, ranking forefront in the industry.
Table 1 Production Capacity of Main Products of the Company (10,000 Tons/Year)
Products Capacity
Chemical products 265
Oil products 565
PTA 1,300
20
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
PIA 30
Polyester fiber products 750
Polyester bottle chip 200
Caprolactam 40
Note: 1) Polyester fiber products include POY, FDY, DTY, staple fiber and chip products.
2) This table is the actual production capacity table of the Company in the reporting period.
During the reporting period, the Company continued to attach importance to investment in
research and development of new products, actively responded to the carbon peak and carbon
neutrality strategy, and adhered to the guidance of "green manufacturing" and "circular economy".
In the polyester sector, it continued to carry out product development and achievement
transformation around the three major themes of green environmental protection, function and
bio-base. Internally, the Company optimizes the sales system, actively grasps the market demand,
and fully taps and reasonably guides customer demands through the organic linkage of research and
development, production and sales; externally, the Company, through cooperation with colleges and
universities, builds an "industry-university-research" school-enterprise ecology and effectively
explores basic materials research support and cutting-edge key technologies.
During the reporting period, the Company adopted a multi-path, multi-echelon and
multi-scenario research and development system. Through technical research, the Company quickly
opened up the regenerated fine denier fiber market and was well received by customers. Its
antimony-free and environment-friendly "Eticont" series products are also recognized by more and
more customers, and the sales volume continues to rise. The flame retardant fibers continue to
maintain a strong market share in domestic flame retardant products. The market popularity of
antibacterial and anti-virus products continues to rise, and antibacterial and anti-virus fibers will
become a crucial profit growth point for differentiated products.
(2) Products covering the rigid needs of the national economy and people's livelihood
The Company's terminal products mainly include refined oil products such as gasoline, diesel
oil and kerosene, as well as polyester products such as polyester filament, polyester staple fiber and
bottle chips, of which refined oil products such as gasoline, diesel oil and kerosene provide energy
supply for corresponding equipment; polyester filament includes POY, FDY, DTY and other
21
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
products, which are used in the production of fabrics and linings such as clothing, home textiles and
decorations, and can also be used for industrial purposes such as webbing, zippers, tents,
automobile interiors and ear threads of masks. Among them, FDY products of the Company can be
used as medical and other materials to meet the increasing demand of downstream customers for
raw materials for medical supplies; polyester staple fiber can be widely used in spinning,
non-spinning and filling fields; bottle chips are widely used in food packaging and medical
materials production, such as water bottles, oil bottles, carbonic acid, hot filling, fast-eating hot
carbonic acid, high B value water bottles, high viscosity oil bottles and low viscosity water bottles.
22
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Table 2 Main Product Features and Application Fields
Products Application
One hydrocarbon, colorless clear liquid and extensive use, main raw material for
producing the purified terephthalic acid (PTA) and also used for synthetic plastics,
drug and pesticide.
Mainly used as fuel of various fuel oil power plants and supply of heat. Used as
Refined oil fuel of automobiles, motorcycles, speedboats, helicopters, agricultures and forestry
aircrafts, vehicles with diesel engines (including trains), vessels and diesel boilers.
Mainly used for producing polyester products, widely used for all the aspects of
national economies (such as clothing, decoration, electronics and architecture). 75%
used for polyester fiber, 20% used for bottle polyester and 5% used for film polyester
(mainly for civil use in the downstream).
PIA is a white crystalline powder or needle-like crystal used to produce alkyd resins,
unsaturated polyester resins and other high polymers and plasticizers. It is also used
to make film film color-forming electrodes, coatings, and dyeing polyester fibers
modifier and medicine.
Used for reprocessing and production of DTY and fiber
products with special styles and widely used for clothing
and industry.
Directly used for weaving as well as production of clothing
and upholstery fabric. Widely used for clothing and industry
and also used as isolation material (including protection
suit).
Directly used for weaving and widely used for clothing and
industry, garment materials and lining.
Mainly used to produce polyamide fabric, engineering
plastics and plastic film as well as widely used for industry
and civilian field.
Widely used for spinning, nonwoven and filling. The
Polyester
non-woven fabrics can be used as raw material of producing
staple fiber
the mask as well as also used for downstream disinfecting
wipes and disposable protective equipment.
Widely used for indirect spinning as well as producing
PET chip textile raw materials (such as filament yarn and short fiber)
and plastics.
Polyester Mainly used for food packaging (including coke bottle,
bottle chip beverage bottle, water bottle and oil bottle).
2. "Petrochemical +" business
(1) Supply chain service business is conducive to improving product operation capability
and enhancing value-added services
23
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
With the continuous improvement of the integrated and balanced development of the
Company's industrial chain, the Company has strengthened its supply chain service management
capacity and innovated and promoted intelligent management and operation modes. Relying on
refining and chemical fiber production base, the Company develops domestic and overseas regional
markets and optimizes product layout; strengthens the construction of digital plants and actively
explores flexible personalized customization of production through big data means; adopts a variety
of tools to improve product operation capability, explores the complementary advantages of raw
material procurement and product sales, and actively plays the strengths of industrial chain
integration to create product price differences.
The Company actively carries out comprehensive distribution services for raw materials and
products, with Hengyi Micro Mall and marketing supply chain system as the core online and
logistics business as the support offline to realize effective integration online and offline.
Continuously optimize the functional application of Hengyi Micro Mall, including price inquiry,
quick order placing, market information, intelligent logistics management platform (HTTMS),
financial services and other supporting services; improve the efficiency of the marketing
closed-loop system, which sees an exploding transaction volume at present; innovate the unique
omni-channel logistics control system and build a tripartite logistics transportation platform.
With the commissioning and operation of Brunei Refining and Petrochemical Project, the
Company has actively conducted supporting shipping business, accelerated the implementation of
integrated management of the supply chain services, formed an intelligent supply chain closed-loop
system of plant-product-warehouse-logistics-customer, and led the upgrading of intelligent supply
chain services in the industry.
(2) China Zheshang Bank's equity investment provides stable profits for the Company
Established in 2004, China Zheshang Bank is one of the 12 national joint-stock commercial
banks approved by the China Banking and Insurance Regulatory Commission. It was listed on the
Main Board of Hong Kong Stock Exchange on March 30, 2016 and Shanghai Stock Exchange on
November 26, 2019, becoming an "A+H" listed bank. At present, it has developed into a
high-quality commercial bank featuring solid foundation, excellent benefits, rapid growth and
perfect risk control. With the completion of the "A+H" layout, China Zheshang Bank will accelerate
its future growth. The Company will further optimize its strategic layout and continuously create
24
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
value for shareholders through the growth premium of China Zheshang Bank.
According to the 2020 annual report released by China Zheshang Bank, China Zheshang Bank
achieved an operating income of RMB47.703 billion in 2020 and net profit attributable to
shareholders of RMB12.309 billion. As of the end of December 2020, the total assets of China
Zheshang Bank were RMB2,048.225 billion, an increase of 13.74% over the end of the previous
year. The Bank is actively accelerating the transformation of digitalization, modernization and
professional innovation, taking financial technology as the engine, and continuously enhancing its
high-quality development and competitive strength.
(ii) Industry situation and company status
The petrochemical and chemical fiber industry in which the Company is located belongs to the
basic industry of the national economy and people's livelihood. The fluctuation of the industry is
mainly affected by factors such as upstream raw materials, product supply and downstream product
market. With the continuous advancement of refining and petrochemical projects, the
self-sufficiency rate of petrochemical products has gradually risen, and the global pricing power has
increased. During the reporting period, the industrial concentration was further improved.
1. Refining and petrochemical
According to Platts, by the end of 2020, the refining and petrochemical production capacity in
Southeast Asia is about 277 million tons/year. In terms of refinery capacity, the top five are
Singapore (69 million tons/year), Thailand (61 million tons/year), Indonesia (59 million tons/year),
Malaysia (48 million tons/year), Vietnam (17 million tons/year), and Brunei's refinery capacity
currently ranks sixth (8 million tons/year). Brunei's refining capacity will reach 22 million tons/year
after Phase II of Brunei's refining and petrochemical industry is put into operation, ranking fifth in
Southeast Asia's refining capacity.
2. PTA
According to CCF, by the end of 2020, the global PTA production capacity is mainly
concentrated in China, and the domestic production capacity is about 57.63 million tons. As one of
the leading enterprises in the PTA industry, the Company has strategically laid out three PTA bases
along the coastline from north to south, namely Dalian in Liaoning, Ningbo in Zhejiang and Yangpu
in Hainan, with a total PTA production capacity of about 13 million tons/year, ranking first in the
25
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
world.
2.1 PIA
According to CCF, by the end of 2020, the national PIA production capacity is about 450,000
tons/year, and the Company's production capacity is 300,000 tons/year, accounting for about 66% of
the national total.
3. Polyester
According to CCF, most of the production capacity of polyester is concentrated in the
Asia-Pacific region, and China is the world's largest textile producer and exporter. By the end of
2020, China's total production capacity has exceeded 62 million tons/year, of which 42.75 million
tons are polyester filament. In 2020, the concentration of production capacity has further increased,
with CR6 (the top six companies in the industry) accounting for 66%, polyester staple fiber
production capacity reaching 7.92 million tons, up 4.4% year on year, and polyester bottle chip
production capacity reaching 11.96 million tons/year. The Company has continuously increased the
proportion of differential fiber varieties and sped up the development of customized products to
meet differential and personalized needs of the market, and its products have enjoyed a good
reputation in the market for a long time. With a polyester production capacity of 7.5 million tons,
the Company ranks first nationwide in terms of polymerization capacity, including 6.62 million tons
of filament and 880,000 tons of staple fiber. The Company produces 2 million tons of bottle chips
per year, ranking forefront in the country.
II. Significant Changes in Major Assets
1. Significant changes in major assets
Major assets Description of significant changes
Mainly refer to the investment of newly-added equity-holding companies
Equity assets
and the investment gains and losses recognized under the Equity Method
Mainly refer to the consolidation of Yisheng PIA Project and Haining New
Fixed assets
Materials Project during the reporting period
Mainly due to the increase in intangible assets of newly established
Intangible assets
companies during the reporting period
26
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Mainly due to the increase in new materials projects in Haining during the
Construction in progress
reporting period
2. Main overseas assets
Proportion Whether
Specific of overseas there is
Operation Control measures to Income
contents of Reason Asset size Location assets to the significant
mode ensure asset safety status
assets Company's impairmen
net assets t risk
Strengthen the
Hong
Holding Overseas management control
5,606,296,10 Kong/Br
subsidiarie investmen Self-built of parent company Good 152.38% No
0 US dollars unei/Sin
s t over overseas
gapore
subsidiaries
Description of other
None
information
III. Analysis of Core Competitiveness
The Company is one of the leading enterprises in the petrochemical and chemical fiber
industries with leading comprehensive strength in China. Its core competitiveness is mainly
reflected in the following aspects:
1. The international industry strategy of "adhering to the real economy and highlighting
the main business" to facilitate high-quality development of the Company
Upholding the strategic policy of "consolidating, highlighting and optimizing the
competitiveness of main business", the Company has taken the lead in the fields of polyester melt
direct spinning, PTA, caprolactam, etc. through alliance with other giants, and has greatly improved
its technology and competitiveness in the above fields. The Company took the lead in arranging
Brunei Refining and Petrochemical Project, responded to the "Belt and Road Initiative" policy,
adapted to the requirements of high-quality development in the new era, seized the development
opportunities of Southeast Asian markets, realized the international layout and operation of the
27
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
industry, completed the integration of vertical industrial chains, solved the bottleneck of raw
materials, and complied with the trend of supply-side reform. In addition, the Company integrated
the petrochemical chemical fiber industry through mergers and acquisitions, realized the grafting of
advantages, expanded the terminal production capacity of the chemical fiber industry, and achieved
the high-quality development of chemical fiber.
2. The strengths of the whole industrial chain featuring balanced integration of upstream
and downstream strengthen profitability and anti-risk ability
The Company has developed into a leading enterprise in the integration of "PX-polyester" and
"benzene-polyamide" industrial chains in the world, and has built a "columnar" balanced integrated
industrial chain of "crude oil-aromatic hydrocarbon-PTA-polyester" and "crude
oil-benzene-CPL-polyamide" through overseas construction of upstream refineries, domestic
expansion of the middle and lower reaches, and implementation of differential development modes
such as mergers and acquisitions. The Company currently has a refining and petrochemical design
capacity of 8 million tons, PTA capacity of 13 million tons, polyester and caprolactam capacity of
7.5 million tons and 400,000 tons respectively. The upper, middle and lower reaches of the
Company are self-sufficient in raw materials, realizing the balanced and coordinated development
of the entire industrial chain from unique large refining and chemical to PX, PTA and polyester
(PET) capacity matching. The Company carries out operation at home and abroad to enhance its
ability to resist risks of operational fluctuations. Upon Phase II of the Brunei Refining and
Petrochemical Project is completed and put into operation, an "ethylene-propylene-polypropylene"
industrial chain will be added, which is conducive to improving the intensification, scale and
integration level of the Brunei Refining and Petrochemical Project; enhancing the integration,
globalization and balanced cooperative operation of the Company's industries, products and assets,
as well as its sustainable profitability and anti-risk ability.
3. Efficient operation and quality assurance further strengthen the scale advantage of
leading market share
The market share of PTA and polyester fiber products of the Company is at the forefront of the
industry. As of the latest statistics, the Company's participating PTA production capacity accounts
for 22.56% of the country's effective PTA production capacity, and its participating polyester
production capacity accounts for nearly 12.10% of the country's effective polyester production
28
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
capacity (data source: http://www.ccf.com). The industry concentration is relatively high and the
scale advantage is obvious. The Company continuously upgrades and optimizes its industrial model,
consolidates and expands the advantages of production capacity in all links, promotes the
quantitative change of its business scale and the qualitative change of its business structure, and
enhances the investment and application of large-scale equipment and energy-saving and
consumption-reducing technologies. Its scale advantage promotes the stability of production
equipment operation and product quality, and the improvement of production efficiency, and greatly
reduces unit investment cost and unit energy consumption. Also, the Company outperforms its peers
in terms of the unit manufacturing cost of products. Meanwhile, through large-scale procurement,
the Company possesses strong operation ability and obtains advantageous prices, thereby reducing
procurement costs and providing a strong guarantee for the profitability of the final products.
4. Focus on the technological advantages of high-end scientific research and innovation
and continue to explore new business growth points
The Company has long focused on the research and development and application of high-end
products in the field of polyester chemical fiber. Relying on the school-enterprise platform, the
Company has realized a "diverse, serialized, premium and unique" product structure. The Company
fully carries out research and development of new products and technologies regarding the entire
industrial chain, realizes full-process and flexible development of high-tech products (technologies)
and transformation of scientific and technological achievements, and occupies a leading position in
the domestic industry in terms of technical level.
Upholding the industrial structure of "crude oil, polyester and polyamide", the Company, in
terms of materials, focuses on the green manufacturing of polyester and the recycling of polyester,
breaks through the existing technology challenges, realizes quality recycling of polyester, and
prepares high-performance polyester materials with bio-based as raw materials. As for chemical
engineering, in order to expand the application range of PTA, the Company is currently developing
various diols of monomers needed for differential production of polyester. Also, to reduce the
production cost, the Company actively studies the development of three agents such as matting
agent, catalyst and additive in the existing process.
5. The industrial Internet advantages of digital intelligence promote the highly
coordinated operation of the whole industrial chain
29
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The Company established the information strategy of "petrochemical + industrial internet",
promoted the deep integration of new-generation information and communication technology and
petrochemical manufacturing industry, and strengthened the digital, networked and intelligent
development of the chemical fiber manufacturing industry. The Company, based on the basic policy
of innovation-driven, quality and efficiency improvement, and green development, makes good use
of the integration and application of information application, advanced manufacturing, automation
and enterprise management technologies, builds an intelligent informationization of the whole chain
integrating R&D and design, logistics procurement, production control, operation and management,
professional services and marketing, realizes product traceability and whole process management
and control, accelerates the digital transformation process through the integration of intelligent
production, networked collaboration, customized services and digital decision-making, and
promotes the transformation from "manufacturing" to "intelligent manufacturing" and from single
business management to highly coordinated operation of the industrial chain.
In the field of information infrastructure, the Company employs cloud computing,
virtualization, 5G, home base machines and other technologies to promote the construction of
industrial networking, service clusters, information security, etc. to provide technical support and
security for software applications.
In the field of manufacturing, the Company, relying on the information interconnection among
intelligent manufacturing devices such as automatic winding, automatic packaging, intelligent
external inspection, AGV trolley, robot and Automatic Storage and Retrieval System, adopts
network communication, Internet of Things, mobility, micro-service, real-time database and other
technologies to successfully develop a single ingot data flow system to realize efficient logistics
operation and automatic quality control of products in workshop warehouses, and achieve process
optimization, information sharing and efficiency improvement among production processes.
In terms of marketing services, the Company builds two software systems of micro mall and
marketing supply chain, and adopts Internet marketing and customer social experience management
to facilitate independent order placing, supply chain services, full process display of sales data, and
data services for multi-dimensional portraits; realizes data sharing of various business systems,
improves data interaction efficiency, eliminates information circulation barriers, and forms
closed-loop processes of supply chain business such as sales, collection, distribution, delivery,
30
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
vehicle dispatch, shipment, invoicing, etc.
6. Young, professional and international team management strengths at home and abroad
The Company emphasizes professional team management and introduces senior management
and technical personnel from home and abroad through various channels. While introducing
external talents, the Company focuses on the cultivation of internal talents, and offers opportunities
for young management talents, thereby providing a good career development channel for
employees.
The company has formed an international, specialized and professional management and
operation team, laying the foundation for the sustained and healthy development of the Company's
industry. With the continuous expansion of the Company's scale, the Company has drawn lessons
from advanced organizational management experience at home and abroad, established a perfect
internal system, continuously implemented organizational structure optimization, continuously
improved the efficiency of the Company's organizational management operation, and brought into
play the advantages of scale synergy.
To promote the long-term sustainable development of the Company's talent team and share the
Company's development achievements with employees, apart from providing employees with
competitive salary and incentive mechanisms, the Company has implemented two restricted stock
incentive plans and four employee stock ownership plans since 2015, fully mobilizing the
enthusiasm of employees and effectively attracting high-tech talents. Through the establishment of a
long-term development sharing mechanism, the Company effectively enhances the sense of
belonging and cohesion of employees, and provides a talent base for its long-term development.
31
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section IV Discussion and Analysis of Business Situation
I. Overview
i. Discussion and analysis of industry situation
Hengyi Petrochemical is engaged in the petrochemical and chemical fiber industry. Its raw
materials come from petroleum or corresponding chemicals cracked by petroleum. The demand for
final products is closely related to the food, clothing, housing and transportation of ordinary people.
Important factors affecting the industry include crude oil price fluctuation, downstream demand,
capacity supply and matching of upstream and downstream industrial chains.
1. Refining and chemical business: Rely on the competitive advantage of China-Brunei
location and conform to the recovery trend of global demands
(1) The recovery of the global economy and the crude oil prices are conducive to the
double growth of downstream demand and profits
Generally speaking, when the oil price rises steadily or moderately, it is beneficial to the
operation management and efficiency improvement of petrochemical enterprises. After the current
oil price plummets, the low oil price would be advantageous to petrochemical enterprises. For one
thing, the low oil price is conducive to expanding the price difference of downstream products, and
stimulating the growth of terminal demand, thus promoting the improvement of profits; for another,
low oil prices leave room for price rise. The rise in oil prices will bring about an increase in
inventory value in the industrial chain and the improvement in downstream production load, thus
stimulating demand growth.
The year 2020 saw great uncertainties in the global economy. Affected by the COVID-19
pandemic and OPEC's production reduction falling short of expectations, commodity prices have all
fallen to the bottom. In particular, the international oil price has plummeted to the low level in
recent years, and the panic decline of oil price has brought severe challenges to downstream
chemical fiber enterprises. Also affected by the pandemic, the terminal demand shrank sharply, and
at the same time, the cycle of expanding production capacity in the industry continued, resulting in
obvious changes in the market supply and demand pattern.
32
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Since the beginning of this year, with the gradual weakening of the impact of the pandemic and
the recovery of crude oil demand brought about by global economic recovery, driven by the active
production reduction of OPEC and oil-producing countries and the passive production reduction of
non-OPEC oil-producing countries, there have been clear signs of improvement at both ends of
supply and demand in the oil market. In the long run, oil will return to the normal supply, and
international oil prices will continue to rise. At the macro policy level, countries ease monetary and
fiscal policies. In particular, the Federal Reserve implements various loose monetary policies to
stabilize the economy. Loose macro policies and the weakness of the US dollar index have played a
significant supporting role in the oil market. At present, Brent crude oil prices are gradually
returning to the normal range of USD50-70 per barrel. For the downstream, economic recovery is
expected to further stimulate demand growth due to the long-term rigidity of the Company's
products corresponding to downstream demand.
(2) Southeast Asia boasts a broad refining and chemical market prospect and Hengyi
Brunei seizes the first-mover advantage
Compared with the surplus supply of domestic refined oil products, Southeast Asia's refined oil
market has a large gap and broad prospects. According to Platts, from the supply level, Southeast
Asia has an existing production capacity of about 277 million tons/year, with Singapore, Thailand,
Indonesia and Malaysia at the forefront. Due to the 40-50 years of operation of some refinery plants,
outdated technology, poor management, heavy burden of government subsidies and other reasons,
the shut-down capacity in Asia is expected to reach 70.15 million tons in the past three years. Asia
plans to add new capacity in China and India, while Southeast Asia only saw a small increase in
production in Brunei, Indonesia and Malaysia. The demand for refined oil has great growth
potential.
Moreover, Southeast Asia is relatively close to Australia, and Australia needs to import refined
oil. According to the data of the Australian Renewable Energy Agency, the import volume of
gasoline, diesel and coal was about 8.4 million tons/year in 2019 and 6.9 million tons/year in 2020.
In addition, affected by the global pandemic, the overall demand is affected to some extent, but the
overall trend of imported refined oil products in Southeast Asia remains good. According to Platts,
in terms of gasoline products, Southeast Asia imported about 58.33 million tons/year in 2019 and
about 48.5 million tons/year in 2020. The main importing countries are Indonesia, Malaysia,
33
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Singapore, Philippines, Myanmar and other places, while the main exporting countries are
Singapore and Thailand. In terms of aviation kerosene, all countries are relatively self-sufficient in
the aviation industry and are dominated by trade circulation. Malaysia is the main importer in
Southeast Asia, and several other countries with smaller refineries, such as the Philippines and Sri
Lanka, imported about 4.7 million tons/year in 2019 and 4 million tons/year in 2020. In terms of
diesel oil, there is a big gap in Southeast Asia, with imports of about 42 million tons/year in 2019
and 38 million tons/year in 2020. The main importing countries are Vietnam, Bangladesh, the
Philippines, Sri Lanka, Myanmar, Indonesia and Malaysia. In addition, with the implementation of
the new IMO standard in 2020, the demand for low-sulfur fuel oil has risen. Singapore is a major
shipping base with an import volume of 5.5 million tons/year. Some marine diesel oil (MGO) needs
to replace marine fuel oil, and the import volume of diesel oil in Southeast Asia will increase.
Fig. 3 Price Difference of Refined Oil Cracking in Southeast Asia in Recent Seven Years
25.00
20.00
15.00
10.00
5.00
0.00
2014-6-30 2015-6-30 2016-6-30 2017-6-30 2018-6-30 2019-6-30 2020-6-30
-5.00
-10.00
Gasoline Diesel oil 航空煤油kerosene
Data source: Platts
As the profit vane of refineries in Southeast Asia, from the perspective of the price difference
of refined oil cracking in recent seven years, the price difference of refined oil cracking was at the
lowest level in history during the pandemic in 2020. Since 2021, with the recovery of the pandemic
and the recovery of downstream demands, the price difference of various refined oil products is in
the upward channel of recovery.
In 2021, entering the post-pandemic era, the supply capacity of the whole refinery in Southeast
Asia is declining instead of increasing. It is expected that the market will continue to maintain the
34
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
import trend of refined oil every year, and with the gradual recovery of the pandemic, the import
quantity of refined oil will continue to maintain the rebound trend. Meanwhile, with the gradual
repair of cracking spread, new market-oriented refineries may see a rebound in profitability.
The Brunei Refining and Petrochemical Project of the Company is located in the hinterland of
Southeast Asia's refined oil demand market, with obvious geographical advantages, as well as raw
material procurement advantages, refined oil sales advantages, production cost advantages and tax
advantages, and huge market space for product sales.
2. PTA business: The supply of raw materials is loose, and the industrial concentration
continues to increase
In the chemical fiber industry chain "naphtha-PX-PTA-POY/FDY/DTY", with the different
release of production capacity and the different concentration of the industry chain, it will show
different characteristics in different years. With the substantial increase of domestic PX production
capacity in the global share, the corresponding supply of new PX production capacity is loose. In
recent years, the import substitution of domestic PX has continued to accelerate, and the
dependence on domestic PX imports has dropped sharply in 2020. On this basis, ACP negotiations
all failed in 2020, which led to the obvious transfer of PX industry profits to the middle and lower
reaches in the pricing game between PX and PTA plants. In this process, the cost competitive
advantage brought by the scale advantage of domestic large-capacity PX will gradually squeeze the
small and medium-sized production capacity in China, Japan and South Korea, and the proportion
of PX production capacity will continue to increase.
The trend of PX production capacity has further affected the production capacity structure of
the PTA industry and promoted the concentration of the PTA industry to be further higher. As of
December 2020, the top five production capacity in the world accounted for 65.2%, and the
production capacity continued to concentrate on the leading enterprises. The leading enterprises
expanded at low cost and continued to give full play to their scale advantages. Leading enterprises
not only occupy an absolute advantage in production capacity, but also have obvious advantages in
production technology, industrial chain supporting and management level.
3. Chemical fiber business: The terminal demand keeps healthy growth, and leading
enterprises will benefit from reshaping the pattern of the chemical fiber industry chain
(1) Online sales continue to rise steadily, and the consumption structure is iteratively
35
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
upgraded
Judging from downstream demand, polyester fiber is mainly used in clothing, home textiles
and emerging industrial application fields, which are closely related to residents' consumption
wishes. With the stabilization of pandemic prevention and control in China, the increase of per
capita disposable income and the improvement of consumption level, the strategy of expanding
domestic demand and various policies to promote consumption have achieved remarkable efforts.
At present, with the application of online live broadcast and big data in the field of terminal
consumption, especially in third- and fourth-tier cities, counties and townships, the consumption
capacity has risen rapidly. Affected by the pandemic, offline contact consumption is hindered, and
online live broadcast consumption has sprung up everywhere, which strongly supports terminal
consumption and drives the high growth of terminal demand. Online consumption goes against the
trend, effectively promotes consumption replenishment, releases market potential, and creates new
ideas for economic recovery and development. According to the data of the National Bureau of
Statistics, the national online retail sales in 2020 was RMB11,760.1 billion, an increase of 10.9%
over the previous year. Among them, the online retail sales of physical goods reached RMB9,759
billion, an increase of 14.8%, accounting for 24.9% of the total retail sales of consumer goods, an
increase of 4.2 percentage points over the previous year. Online consumption achieved rapid growth.
Online consumption goes against the trend, which also means that China has entered an important
stage of accelerating the upgrading of consumption structure, accelerating the iteration of
consumption patterns, and obviously enhancing the role of consumption in stimulating the
economy.
(2) The export of foreign trade is growing against the trend, and the demand of the textile
and clothing industry is strong
In the context of COVID-19 in 2020, China's textile industry has steadily promoted the
resumption of work and production, benefiting from the recovery of orders at home and abroad, and
the production and supply capacity and the industrial chain operation have returned to normal. In
November 2020, the RCEP agreement was signed, which will significantly benefit the textile and
clothing industry and further accelerate the transfer of production capacity to Southeast Asia.
According to the statistics of the General Administration of Customs, P. R. China, in 2020, the
cumulative export of China's textile and garment boosted the overall export of national goods trade
36
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
by one percentage point, and the cumulative export of China's textile and garment was USD291.22
billion, an increase of 9.5% over the same period of 2019, which boosted the overall export of
national goods trade by one percentage point. Among them, textiles have risen for nine consecutive
months since April 2020, while clothing has reversed since August 2020 and increased for five
consecutive months.
(3) Residents' consumption has been transformed and upgraded, and the demand for
products in the polyester industry chain has remained rigid
In recent years, the income level and consumption expenditure of Chinese residents have
increased steadily. With the increase of income level, major consumer groups have higher
requirements for textile and clothing, clothing quality and consumption capacity. After the
upgrading of the demand system, the soaring consumption level has greatly increased the demand
for polyester differential products. According to the National Bureau of Statistics, the gross national
income in 2020 was RMB100,915.1 billion, an increase of 1.9% over the previous year. This would
promote the increase of terminal consumption expenditure such as the textile and clothing industry
and apparel industry. In addition, there is still a certain gap in per capita fiber sales between China
and developed countries, and there is still much room for the growth of chemical fiber or polyester.
According to the data of the 20th China Hangzhou Chemical Fiber Forum, in 2020, the per capita
fiber consumption in China was 16-17 kg, while that in the United States was 36-37 kg and that in
the European Union was 25 kg. Polyester is of a growth rate of 5-10%, which is expected to grow
for a long time in the future.
(4) The integrated layout of the chemical fiber industry chain is formed to enhance the
competitiveness of downstream chemical fibers
In recent years, private refineries, including the Company, have been put into operation one
after another. With the release of PX production capacity of private refining and chemical projects,
the industry in which the Company is located has changed from single product competition in the
past to a new competition pattern of industrial chain integration. Leading listed companies have
gradually expanded relying on the advantages of vertical integration and firmly grasped the new
share of future market demand.
During the same period, the growth rate of PTA and MEG production capacity continued to
accelerate, and PTA and MEG also entered a loose supply pattern. Since 2017, the growth rate of
37
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
polyester fiber production capacity has steadily declined (data source: CCF Annual Report). With
the gradual recovery of the global economy, the recovery of terminal demand and the loose supply
of the upstream raw material industry chain combined with the decline in the growth rate of
polyester production capacity will guide the profit of the industry chain to shift to chemical fiber.
(5) The market concentration of polyester industry increases, and the competition
pattern is more reasonable
After a decade of integration of polyester filament industry, from 2011 to the end of 2020, the
industry concentration CR6 share rose from 32% to about 66% (data source: CCF Annual Report).
According to the announced investment plan, the main new production capacity in the industry in
the future will come from CR6. Small and medium-sized polyester plants lack the ability of
technological innovation and will gradually withdraw from the competition in the industry. The
market concentration of the polyester industry will be further improved.
In the future, with the continuous improvement of leading enterprises' own competitiveness,
backward production capacity in the downward industry will be accelerated, the entry threshold for
the industrial chain in which the company is located will be further increased, the concentration of
industries in the upper, middle and lower reaches will continue to rise, the competition order in the
industry will continue to improve, and the development environment will become more benign. As
one of the leading enterprises, the Company has accelerated the expansion and income increase of
downstream chemical fiber business in various ways, taking the lead in enjoying the profit increase
brought about by the good prosperity of the industry. It is believed that with the smooth
commissioning of the Company's refining and petrochemical projects, the vertical integration layout
of the industrial chain has achieved initial results and the overall competitiveness will rise to a new
level.
(6) The Company will increase the input of informationization and automation, and
usher in a further improvement in quality and efficiency in the polyester industry
In recent years, leading companies in the industry have been deeply engaged in improving
equipment and technological processes and developing better production processes. Actively
respond to the call of the national green high-tech development, and promote innovative projects
with the overall efficiency of the industry through capital investment and talent investment, such as
the thorough replacement of wooden pallets by catalytic cycle pallets. At the same time, in recent
38
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
years, leading companies in the industry have carried out drastic reforms in digitalization,
accelerated the construction from intelligent manufacturing units and intelligent production lines to
intelligent workshops and intelligent plants, guided new formats such as personalized customization,
collaborative manufacturing and remote operation and maintenance, and promoted the digital
transformation of polyester industry.
(ii) The progress of the business plan disclosed in the previous period in the reporting period
In 2020, faced with the sudden global public health challenge of COVID-19, the economic risk
challenge at home and abroad, and the complex environment, the Company forged ahead with its
employees, facilitated the smooth operation of the Brunei Refining and Petrochemical Project, a key
project of "Belt and Road Initiative", continued to maintain high-load production, and improved its
competitive advantage. The leading competitive advantage of the PTA business sector has been
further improved, the potential has been continuously tapped and transformed, and the profitability
of products has maintained the leading level in the industry. The main business of chemical fiber
took high-quality development as the main line, continued to expand production and improve
quality, further improved the differential level of product, and greatly increased profitability
year-on-year; implemented lean production, upgraded quality and brand, and optimized
management innovation, with the management quality reaching a new level.
1. Maintain a good trend of sustained high growth and actively fulfill cash dividend
returns
During the reporting period, the Company realized an operating profit of RMB4.526 billion,
down about 5.19% from the same period of last year, and realized net profit attributable to its parent
company of RMB3.072 billion, down 3.7% from the same period of last year. At the end of the
reporting period, the total assets of the Company were RMB92.26 billion, an increase of 7.58%
over the beginning of the year; the owner's equity attributable to shareholders of listed companies
was RMB24.007 billion, an increase of 1.12% over the beginning of the year; net assets per share
attributable to shareholders of listed companies were RMB6.52; the asset-liability ratio was 67.17%,
which was at a reasonably low level compared with the same industry.
During the reporting period, the Company implemented the 2019 dividend payment plan, with
a total cash dividend of RMB1.137 billion, accounting for 35.51% of the Company's net profit
attributable to the parent company in 2019. Moreover, the board of directors of the Company
39
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
reviewed and approved the dividend plan for 2020, and distributed a cash dividend of RMB3.00
(including tax) for every 10 shares, with a total cash dividend of RMB1.104 billion, accounting for
35.95% of the net profit attributable to the parent company in 2020.
2. The coordination of production, supply and marketing has been enhanced, and
production and sales have increased steadily
During the reporting period, the production and sales of the Company's products were
booming and the production and sales volume increased steadily. Among them, the production and
sales volume of refined oil products (Hengyi Brunei, the controlling subsidiary) reached 5.9224
million tons and 5.8381 million tons respectively; the production and sales volume of chemical
products were 2,265,800 tons and 2,191,700 tons respectively; the production and sales volume of
PTA products (Zhejiang Yisheng, the controlling subsidiary) reached 4,850,200 tons and 4,843,200
tons respectively; the production and sales volume of polyester products of the controlling
subsidiary were 6.527 million tons and 6.056 million tons respectively.
Table 3 Output and Sales Volume of the Company's Main Products in 2020
Output
Sales Year-on-year
Major products (10,000 Sales in 2019
volume increase
tons)
Refining products 592.24 583.81 54.93 962.83%
Chemical products 226.58 219.17 12.88 1,601.63%
PTA 485.02 484.32 503.64 -3.84%
Polyester products 650.27 605.60 559.29 8.28%
3. The strategic layout of the international industry has achieved initial results, and the
Hengyi Brunei Refining and Petrochemical Project makes new performance contributions
During the reporting period, affected by the global spread of the COVID-19 pandemic, various
regions successively adopted strict closure and isolation measures. The demand for terminal
consumption continued to be sluggish, the global crude oil price plummeted, Crack Spreads of oil
products freely fell and the downstream petrochemical industry was under production, the inventory
was high, the price was upside down, and the global refineries as a whole fell into huge losses. The
world saw the continuous appreciation of RMB. Hengyi Brunei was facing an all-around "extreme
40
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
pressure test" in its first year of operation.
In this context, during the reporting period, the Company's Brunei Refining and Petrochemical
Project actively coordinated and organized various anti-pandemic work, maintaining high-load
stable operation and stable production management throughout the year.
(1) Give full play to the advantages of flexible management strategies and processes to cope
with oil price fluctuations
In light of the trend change of the difference between light and heavy oil prices, the Company
quickly adjusted its crude oil procurement strategy to overcome many difficulties such as long
international trade cycle, difficult price judgment, high uncertainty of resource guarantee, etc. The
plant quickly adjusted its production and processing mode, which greatly reduced the crude oil
procurement cost. Meanwhile, the changes in the raw oil market were continuously tracked, the
production blending formula was calculated and optimized through the whole process simulation,
and raw materials with high cost performance were purchased, so as to meet the production demand
and effectively reduce the purchase cost of raw materials.
Although the Crack Spreads of gasoline, aviation fuel and diesel oil reached the historical
freezing point in 2020, Brunei plant has produced a large number of marketable non-standard
products based on accurate market judgment, which can make positive contributions to performance
in the future.
(2) Take multiple measures to cope with the impact of the pandemic and ensure smooth and
optimized operation
During the pandemic, in order to solve the shortage of front-line employees, the Company
actively organized charter flights to promote the resumption of work and production. Besides, the
Company intensified its local recruitment, and engaged 675 local employees, achieving a
localization rate of 40% at the initial stage of Phase I operation. Apart from promoting the joint
training program with Chinese colleges and universities, the Company, together with local colleges
and universities, determined eight specialties for school running. At present, the project has been
fully started, which will lay a solid foundation for the stable supplement of local professionals.
During the reporting period, the Company actively promoted the linkage between production
and marketing, and always put the "target of reaching a “safe, stable and optimum operation at full
capacity for long on-stream running" in the first place. The monitoring model of equipment and
41
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
utilities system has been established, continuous technical research has been carried out, a large
number of technical transformation and measures projects have been implemented, and various
professional and technical management has been continuously consolidated to ensure the stable
operation of the whole plant under high load.
To sum up, Hengyi Brunei's refined oil, chemical products and other products have been sold
smoothly, and good results have been achieved in the international layout and operation of the
industry against the trend. During the reporting period, the Company produced a total of 8,188,200
tons of products, including 2,265,800 tons of chemical products and 5,922,400 tons of refined oil
products. The sales revenue of refined oil products and chemical products were RMB14.459 billion
and RMB4.286 billion respectively (the data are for external sales), which further promoted the
global popularity of "Hengyi" brand, and the integration of vertical industrial chain helped the
Company to continuously improve its competitive advantage.
With the full-scale resumption of work and production in China, the year 2021 will usher in the
all-around recovery in the post-pandemic era. The Company's Brunei Refining and Petrochemical
Project boasts great strengths in international operation:
(1) With the global recovery, oil prices continue to rebound rapidly, downstream demand
recovers, and economic benefits have been greatly improved. Meanwhile, the central banks of
major developed economies continue to loosen their currencies, maintaining zero or negative
interest rate policies, China's economy continues to recover, the RMB exchange rate tends to
stabilize, and the operating environment for the Brunei Refining and Petrochemical Project
improves significantly.
(2) China and Brunei are highly supportive of the project and the project enjoys long-term tax
incentives and other incentive policies
Brunei sees a stable political situation, and the project meets Brunei's 2035 Vision and
promotes the economic growth of the Belt and Road Initiative countries;
It is not restricted by trade barriers and belongs to the ASEAN Free Trade Area; the import
and export of products are duty-free;
The overall tax burden is obviously reduced. Brunei does not levy personal income tax,
business tax, payroll tax, production tax and export tax. The project has a local pioneer enterprise
certificate and an export enterprise certificate, and can enjoy a long-term enterprise income tax
relief;
42
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The project is in line with the "Belt and Road Initiative" strategy, and the syndicated loans
are of national strategic support.
(3) The plant is stable, operates at high load, and the industrial chain is integrated and stable.
The project is closer to the crude oil supply place and Singapore's crude oil trade market,
boasting convenient crude oil procurement and lower logistics cost;
The refined oil produced by the project is sold to Southeast Asia, which has strong demand;
Brunei Refining and Petrochemical Project has a short sales radius and low logistics cost;
All chemical products are digested downstream of the own industrial chain to realize the
integrated operation of the industrial chain.
(4) The cost advantage is significant, and the cost of energy transportation is reduced.
The project is fully equipped with coal-fired power generation and self-produced steam,
and the cost advantage of utilities is evident;
The main production plants, such as Hydrocracking, Reforming and PX units, adopt the
latest advanced technology, which has the technical characteristics of low operating cost, high
product conversion rate, etc., thus reducing the production cost of PX;
The low-temperature heat reuse technology is adopted, and the waste heat is used for
seawater desalination, which reduces the operation cost of seawater desalination and the
comprehensive energy consumption index of PX production;
Residual oil is treated with the latest flexi-coking process, which can be continuously
produced and reduce labor cost; by-product fuel gas reduces fuel cost; compared with the traditional
process, closed production of the plant is more environmentally friendly and harmless treatment of
residual oil is realized;
The liquid phase diesel hydrogenation technology can meet the new international diesel
standard in 2020, and at the same time reduce the unit investment and operation energy
consumption.
Brunei has a mild climate all year round and no natural disasters. As a rich oil-producing
country, Brunei has abundant oil and gas resources, which can provide some crude oil and reduce
the logistics cost of crude oil.
On the basis of the successful production of Brunei Phase I Project and adhering to the
strategic thinking of consolidating and enhancing the core competitiveness of its main business, the
43
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Company reviewed and approved the investment in the construction of Hengyi Brunei Refining &
Petrohemical Project Phase II in September 2020. The planning of Hengyi Brunei Refining and
Petrochemical Phase II Project mainly includes four parts: "Refining, Aromatics, Ethylene and
Polyester". The four related industrial chains will be highly integrated, including 14 million
tons/year refining, 2 million tons/year para-xylene, 2.5 million tons/year PTA downstream, 1
million tons/year PET, 1.65 million tons/year ethylene and downstream deep processing, as well as
supporting storage and transportation, utilities and corresponding auxiliary facilities.
In 2021, the Company will continue to focus on petrochemical industry and fully promote the
construction of Brunei Refining & Petrochemical Project Phase II. Brunei PMB Refining and
Petrochemical Project is a key link for the Company to realize the internationalization of upstream
industries. While facilitating the smooth operation of Phase I of the Project, the Company has
simultaneously promoted the planning and feasibility study report of Phase II of Brunei Refining
and Petrochemical Project, and finalized the main process framework and capacity composition of
Phase II of Brunei Refining and Petrochemical Project. The completion of Brunei Project Phase II
will help the Company further reduce the production cost of its products, ensure the stability of raw
material supply, strengthen the upstream production capacity base and development leading edge,
further enhance the business structure and integrated cooperative operation, optimize the product
structure, enhance the overall profitability, build the core circle of the Belt and Road Initiative
facing the development of ASEAN, and gradually building the Company into a petrochemical
enterprise with leading comprehensive strength in the world.
4. PTA has significantly improved quality and efficiency, maintaining the leading
profitability in the industry
As one of the leading enterprises in the PTA industry, during the reporting period, the
Company enhanced the production technology management of its PTA business and optimized its
operation capability. Zhejiang Yisheng, controlled by the Company, realized production and sales of
4.8502 million tons and 4.8432 million tons respectively. Zhejiang Yisheng (including Ningbo
Hengyi Trade) achieved a total net profit of RMB1.776 billion. The participating Dalian Yisheng
and Hainan Yisheng realized net profits of RMB1.092 billion and RMB983 million respectively.
Continue to maintain the leading level in the industry.
At present, the 6 million tons PTA project of Yisheng New Materials invested and constructed
44
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
by the Company in cooperation with Rongsheng Petrochemical is progressing as scheduled. The 3
million tons of Line 1# is planned to be completed and put into production in the second quarter of
2021, and Line 2# is expected to be completed and put into production by the end of 2021. At that
time, the Company's PTA production capacity will reach a higher level.
5. Continue to enrich high-end differential products, and continue to improve the
profitability of chemical fiber business
During the reporting period, the scale of the Company's chemical fiber business continued to
grow, the forward-looking technology research and development layout was smoothly industrialized,
and most of the newly increased productive capacity gave priority to advanced manufacturing
plants with high added value, high quality and differential production. Haining New Materials' 1
million tons of production capacity has been put into production in 2020 and the first quarter of
2021 consecutively. Jiaxing Yipeng Chemical Fiber Co., Ltd.'s "500,000 tons of differential
functional fiber upgrading and transformation project" will be completed and officially put into
production in June 2020. In 2020, the production and marketing of the Company's polyester
products (including filament, staple fiber, and chips) continued to maintain a booming trend,
achieving production and sales of 6.5027 and 6.0560 million tons, respectively, with a year-on-year
increase of 15.56% and 8.28%.
Despite the impact of the epidemic and the decline in the industry's prosperity, the Company's
strategy of balanced and integrated upstream and downstream development and high-end
differential products have demonstrated a good competitive advantage in responding to periodic
fluctuations of industry.
Table 4 As of the disclosure day of this report, the progress of the Company’s main projects
Capacity
Investment/acquisition
Product (Ten
No. Item amount Project Progress
type thousand
(RMB 10,000)
tons)
Haining New Material's annual
production of 1 million tons of POY, Put into
1 differential environmental 636,000 FDY, 100 production on
protection functional fiber chips February 18, 2021
construction project
2 Differential functional fiber 227,220 FDY 50 Put into
45
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
upgrading project of Jiaxing production on
Yipeng Chemical Fiber Co., June 04, 2020
Ltd.
New Type Functional Fiber Some devices
FDY,
Project with an Annual Output have been put into
3 335,000 staple 56.6
of 566,000 Tons of Fujian Yijin production on
fiber
Chemical Fiber Co., Ltd. April 9, 2021
Annual Production of 500,000
Put into
Tons of Multifunctional New
PET production in the
4 Materials Project of Hainan 83,600 50
flakes third quarter of
Yisheng Petrochemical Co.,
2020
Ltd.
Haining New Material's annual
production capacity of 500,000
Under
5 tons of new functional fiber 256,500 FDY 50
construction
technological transformation
project
6. New markets are opened up continuously through technological R&D and innovation,
supply chain capabilities are solidified through digital intelligence transformation,
organizational structure optimization continues to glow with new energy.
The Company devotes itself to improving the capability of independent innovation. The
proportion of high-end products is increased continuously by creating industry-leading technologies
and high-end products during reporting period; the development of customized products is
accelerated to meet the requirement of market differentiation and individualization, and the
products have earned good reputation in the market for a long time. The quality of the Company's
Eticont products has been further improved, which are widely used in infant clothing, facial masks
and other fields, and the added value of the products is much higher than that of conventional
products. The flame-retardant segmented products are also gradually enriched, and the final test of
regenerated flame-retardant polyester has been successfully completed, which has been accepted by
more and more customers. At the same time, the anti-bacterial and anti-viral fiber is also rapidly
industrialized, and its excellent anti-bacterial and anti-viral properties have been unanimously
recognized by customers.
During the reporting period, the Company fully implemented intelligent business management,
46
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
strengthened supply chain management, improved customer service capabilities, promoted
innovative operating models, strengthened personnel training, optimized organizational structure,
made the level of management and operating efficiency step into new phase. During the reporting
period, by the aid of big data, the Company promoted intelligent full-process management with
automation, digitization, and cloud computing as the core intelligent manufacturing; improved
supply chain integration projects, including the development of micro-mall, closed-loop marketing,
TMS and warehousing system upgrades, etc.; improved the level of functional application of
Hengyi Micro Mall, including price query, quick order placement, market information, intelligent
logistics management platform (HTTMS), financial services and other supporting services to
optimize the closed-loop marketing system, which effectively improves the operating efficiency of
Company, innovates a unique omni-channel logistics management and control system, and builds a
tripartite logistics transportation platform to provide enterprises with efficient, collaborative, and
real-time logistics transportation services.
During the reporting period, the Company focused on shaping a culture of co-creation, sharing
and win-win strivers, and vigorously promoted the reform of management institutions. Focusing on
the business objectives of the enterprise, the Company promoted the reform of the headquarters
functions, in a forward-looking manner by establishing a human resource management mechanism
that supports the culture of co-creation and sharing of a win-win strivers, and promoted the
establishment of a streamlined and efficient functional headquarters; focusing on promoting the
reform of the marketing system, further strengthened the operational capabilities of the marketing
system by reforming the production and sales coordination model, leading the industry to
continuously explore marketing models and marketing team management innovation; vigorously
promoted the integration and optimization of the engineering management system, and effectively
played the main role of the factory while exploring and improving the coordination functions of the
headquarters. At the same time, the Company exerted itself in introducing high-quality talents,
upgraded the organizational structure platform, innovated talent training models, promoted the
development and growth of key talents, and adhered to the three-dimensional and multi-source
incentive mechanism of "value co-creation and benefit sharing" to stimulate the vitality of the team.
The Company shall comply with the disclosure requirements of Shenzhen Stock Exchange
Industry Information Disclosure Guidelines No.18-Listed Companies Engaged in Chemical
47
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Industry Related Business.
Procurement mode of main raw materials
Currency Unit: RMB/ton
Proportion Whether the
Average Average
of purchase settlement
Main raw Procurement price in the price in the
amount in method has
materials model first half of second half
total changed
the year of the year
purchases significantly
Crude oil Purchasing inquiry 28.93% No 1,786.37 2,740.99
Naphtha Purchasing inquiry 2.13% No 3,166.20 3,088.44
Mixed xylene Purchasing inquiry 1.12% No 3,059.63 3,197.03
PX Purchasing inquiry 22.11% No 4,216.60 3,843.81
MEG Purchasing inquiry 12.88% No 3,418.31 3,250.89
Reasons for major changes in raw material prices from the previous reporting period
The purchase price of energy accounts for more than 30% of the total production cost
□ Applicable √ Not applicable
Production technology of main products
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
Introduction Advanced equipment technology, large production
Mass
Gasoline Multiplayer and capacity, low raw material and transportation costs,
production
innovation and high environmental protection level
Introduction Advanced equipment technology, large production
Mass
Diesel oil Multiplayer and capacity, low raw material and transportation costs,
production
innovation and high environmental protection level
Introduction Advanced equipment technology, large production
Mass
Kerosene Multiplayer and capacity, low raw material and transportation costs,
production
innovation and high environmental protection level
48
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
Advanced equipment technology, large production
Introduction
Mass capacity, low raw material and transportation costs,
Paraxylene Multiplayer and
production high product purity and long operation cycle of the
innovation
unit
Advanced equipment technology, large production
Introduction
Mass capacity, low raw material and transportation costs,
Benzene Multiplayer and
production high product purity and long operation cycle of the
innovation
unit
Introduction Large production capacity, low investment, low
Purified Mass
Multiplayer and energy consumption, convenient transportation, and
terephthalic acid production
innovation high level of environmental protection
Introduction
Mass Short process, large production capacity, low
Polyester Multiplayer and
production consumption of raw materials and utilities, etc.
innovation
The low-temperature easy-to-dye cationic polyester
is prepared by adding the third and fourth
monomers to the polymerization reaction system,
using a special equipment structure, through
esterification, pre-condensation, and final
Introduction
Mass polycondensation, which reduces the cost of
Polyester Multiplayer and
production downstream dyeing and reduces environmental
innovation
pollution. The melting point is increased using
accessory ingredient such as composite stabilizers,
to improve the thermal stability of the fused mass,
increase the whiteness, and improve the hue and
heat resistance
49
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
No matting agent is added during the
Introduction
Mass polymerization process to produce super bright
Polyester Multiplayer and
production polyester products to meet the needs of different
innovation
customers with low production costs
A full dull polyester product is produced by adding
Introduction a matting agent during the polymerization process,
Mass
Polyester Multiplayer and which solves the problem of reduced filter cycle
production
innovation caused by the increase of matting agent and reduces
energy consumption
The catalyst is uniformly dispersed in the material
by optimizing the design of the reactor structure,
Wide range Introduction adding a titanium-based catalyst to replace the
Polyester of Multiplayer and antimony catalysis, and produce an
applications innovation environmentally friendly antimony-free polyester
product with a high level of environmental
protection.
The preparation process of master batch was
improved, and the types and proportions of
Introduction Ag-carrying antibacterial agent, PBT powder
Mass
Polyester Multiplayer and mixing, and dispersant were studied, and the
production
innovation optimal ratio of the three was determined. The
antibacterial master batch was prepared by melt
blending and extrusion, with outstanding functions
Wide range Introduction
Maximum output, highest conversion rate and
Polyester of Multiplayer and
lowest energy consumption
applications innovation
50
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
Wide range Introduction By tapping the potential of equipment, the goal of
Polyester of Multiplayer and increasing production and efficiency is achieved
applications innovation without increasing investment
To increase Eenergy efficiency is increased, to
Wide range Introduction
continually introduce energy-saving technologies
Polyester of Multiplayer and
are introduced continually, and to reduce
applications innovation
production costs
The filter cycle is extended, and the waste of labor
Wide range Introduction
is reduced, and the packaging cost saved, which
Polyester of Multiplayer and
brings considerable economic benefits to the
applications innovation
Company
The fluidity of the polyester melt is improved
through the modification during the polymerization
reaction, for the effect of the polycondensation
reaction, the intrinsic viscosity of the product is
Wide range Introduction
higher than that of the conventional polyester under
Polyester of Multiplayer and
the condition of the original polymerization
applications innovation
residence time, and the melt processing
performance is improved. This technology has
obtained a utility model patent with patent number
of ZL 201120209233.4
The Spinning is characterized by short process, the
Introduction
Mass large production capacity, the high degree of
Spinning Multiplayer and
production differentiation, the stable product quality, and the
innovation
low consumption of utilities.
Spinning Mass Multiplayer Introduction The POY→DTY process route of melt direct
51
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
production and spinning is adopted, and the melt is sprayed from
innovation the self-designed "one"-shaped spinneret orifice,
and then cooled, oiled, and packaged into a flat
profiled POY yarn. POY is then made into flat
DTY polyester filament through a texturing
process. The polyester filament has a lower bulk
density, lighter weight, and a soft texture feeling.
Using the POY→DTY process route of melt direct
spinning, the melt is sprayed from the self-designed
"cross"-shaped spinneret orifice, then cooled, oiled,
Introduction
Mass and packaged into a cross-shaped POY yarn. POY
Spinning Multiplayer and
production is made into cross DTY polyester filament through
innovation
the texturing process. The polyester filament has a
low bulk density, light weight, good air
permeability, and a soft hand feeling.
Using the melt direct spinning PDY process route,
the melt is sprayed from the self-designed "feng" or
Introduction "mi"-shaped spinneret orifice, and then cooled,
Mass
Spinning Multiplayer and oiled, and packaged to be spun into a Feng-like or
production
innovation mi-like shaped FDY yarn. The polyester filament
has low bulk density, light weight, special luster
and soft hand feeling.
The functional hollow polyester fiber is produced
Introduction
Mass by adding functional self-heating masterbatch as
Spinning Multiplayer and
production the "core" part of the warm and comfortable
innovation
composite fiber, which has a dual-effect warmth
52
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
retention effect. This product has obtained an
invention patent, with patent number of
ZL201410481816. 0
Wide range Introduction Using advanced equipment and process technology,
Spinning of Multiplayer and short process, high degree of automation, low
applications innovation manufacturing cost
Wide range Introduction Through reasonable evaluation and extension of the
Spinning of Multiplayer and spinning blade cycle to improve product quality
applications innovation stability and reduce consumption and cost.
By installing on-line adding equipment, dynamic
and static mixing equipment, oil spray nozzles,
winding machines, etc. on the melt direct spinning
line, the existing equipment is upgraded and
transformed to produce the differential and
Wide range Introduction high-end products in the polyester melt direct
Spinning of Multiplayer and spinning line. The method solves the contradiction
applications innovation between the large-capacity polyester device and the
production of small batches of functionally
differential fibers with multiple varieties. The
Company mainly produces functional modified
fibers such as colored, flame retardant, antibacterial
and full dull.
By applying the Company's own technology to
Wide range Introduction
produce flame-retardant polyester, and usage of
Spinning of Multiplayer and
single-component spinning or composite spinning
applications innovation
technology, the single-component or
53
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
two-component sheath-core composite
flame-retardant and drip-resistant POY-DTY
polyester filaments can be produced.
The Company researches, develops, produces
Wide range Introduction
independently polyester polyamide, SPH, sea
Spinning of Multiplayer and
island, Melange and other composite yarns to meet
applications innovation
high-end market demand.
During the spinning production process, the
non-contact heating method is adopted to reduce
the friction and heating during the processing of the
thread, avoid the generation of broken filament.
The low temperature stretching deformation-high
Wide range Introduction temperature setting is used, coupled with
Spinning of Multiplayer and appropriate air interlacing jet, and reasonably
applications innovation controlling air interlacing pressure bundling
performance and other production processes,
producing ideal full-drawn FDY products similar to
flat-drawing machine products. This technology
has obtained an invention patent with patent
number of ZL200810059725.2
Through the use of programmable controller PLC,
the composite yarn is stretched in multiple stages,
Wide range Introduction
and the sequence of the stretch ratio of each
Spinning of Multiplayer and
segment can be changed at will within the range,
applications innovation
making the composite yarn have different structural
compactness, resulting in a difference in color
54
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
absorption and dyeing rate, and appearing a variety
of colors after dyeing. It has significant economic
and social benefits. This technology has obtained
an invention patent with patent number of
ZL200710070581.6
The graphene masterbatch and polyester chips are
blended for spinning, and a 4C-type aperture
spinneret is used to prepare hollow graphene
polyester fiber pre-oriented yarn, and the fluffy
Wide range Introduction crimp of the polyester fiber is further improved in
Spinning of Multiplayer and the subsequent texturing process. This enables
applications innovation polyester fiber to not only exert the functionality of
graphene, but also has the characteristics of warmth
and light weight, and expands the application
prospects of graphene in the field of empowered
textiles.
Through false-twist texturing temperature control,
Introduction
Mass the linen-like cloth style is achieved, so that it not
Texturing Multiplayer and
production only has the style of hemp natural fiber, but also
innovation
has the stiffness of linen-like fiber.
By intermittently closing the airflow through the air
interlacing jet a variety of polyester POY yarns of
Introduction
Mass different colors are compounded by false-twist
Texturing Multiplayer and
production texturing to obtain a polyester fancy composite
innovation
yarn alternating with fluffy non-net low-elasticity
section and an air interlacing mixed fiber section.
55
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
Colored polyester POY is adopted to directly
texture and compound to prepare colored
composite yarns, eliminating the need for
complicated downstream dyeing processes,
reducing product costs, simplifying processes, and
reducing environmental pollution
Reasonable solenoid valve switching logic is
designed by adopting dual solenoid valve switching
logic design, through parallel or tandem type dual
solenoid valve. The two valves are used to jointly
Introduction control the intermittent switch realizing the air
Mass
Texturing Multiplayer and interlacing jet airflow, realizing the intelligent
production
innovation design of polyester fiber fancy complex yarn,
reducing the frequency of use of a single solenoid
valve, preventing the single solenoid valve from
overheating and damage, and effectively improving
the efficiency of texturing
The Company's technology for producing
monofilament with a fineness of 0.5-1.0dpf is
relatively mature, which provides technical support
Introduction and experience accumulation for the research and
Mass
Texturing Multiplayer and development of finer products. The Company's
production
innovation independent research and development is realized
by supporting the fore and post spinning. At
present, the Company has mature production
technology for super-fine products of less than
56
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
0.5dpf, with stable quality and production
conditions, which are mainly used for high-end
fabrics and decorative fabrics.
Fore spinning introduces the third monomer into
the reaction system to prepare low-temperature and
Introduction
Mass easy-to-dye cationic POY, supporting post-spinning
Texturing Multiplayer and
production and texturing to prepare DTY products, reducing
innovation
the cost of downstream dyeing and reducing
environmental pollution.
This technology is independently researched and
developed by the Company. It prepares bamboo
Introduction joint products through special process conditions
Mass
Texturing Multiplayer and such as stretching temperature and stretch ratio. It
production
innovation has the characteristics of ramie cotton fabric and is
widely used in summer ramie cotton fabric which is
needed widely in the market.
The composite yarn is made of two or more fibers.
The processed products have the characteristics of
a variety of fibers, such as cotton material hand
Introduction
Mass feeling, soft and airy, and different dyeing patterns,
Texturing Multiplayer and
production including FDY-DTY composite yarn, high and low
innovation
adhesive composite yarn, Melange and so on. This
product is widely used in the weaving of high-end
fabrics with the greater market demand.
Mass Introduction The special-shaped section of the spinning
Texturing Multiplayer
production and spinneret is used to produce polyester fibers of
57
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
innovation different cross-sections, which improves the
capillary effect of the fiber in the fabric, so that the
sweat is quickly migrated to the surface of the
fabric and diverges through the effects of wicking,
diffusion, and transmission, so as to achieve fast
moisture transfer and fast drying and improve the
moisture permeability of polyester fabric
The torque of the two wires after the merger
cancels each other, and a torque-free product is
produced by producing S+Z products on a
Introduction
Mass double-strand model. This technology has the
Texturing Multiplayer and
production advantages of flat surface, easy weaving, plentiful
innovation
hand feeling, uniform dyeing, etc., especially for
the Buzin cloth so it is very suitable for some
high-end decorative cloths.
Using the preparation technology of wool-like
fiber, the POY yarn is stretched and false twisted
on the DTY machine, and then compounded with
the DTY of the PTT component. The PTT fiber
Wide range Introduction
floats on the surface of the yarn and exerts its
Texturing of Multiplayer and
excellent wearability. The high-shrinkage modified
applications innovation
PET fiber is placed in the inner layer of the yarn to
exert its rigidity and bring a stronger sense of
straightness. This product has obtained an invention
patent with patent number of ZL201010174972. 4
Texturing Wide range Multiplayer Introduction False twist texturing technology is used to produce
58
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The stage of Situation of
Patented
Major products production core technical Product development advantage
technology
technology personnel
of and polyester fiber filaments that have good hollowness
applications innovation and clear profile with high requirements for shape
retention and hollowness.
This technology is independently researched and
developed by the Company. It is used to process
Wide range Introduction
DTY in black, red, gray, yellow and other colors.
Texturing of Multiplayer and
The color is uniform, no dyeing is required after
applications innovation
weaving, and is not easy to fade in daily use, which
is mostly used for weaving special-purpose fabrics.
The current international advanced
high-temperature crystallization and solid-phase
Multifunctional Introduction polycondensation process is adopted for the core
Domestic
polyester bottle Multiplayer and technology of this product with short process flow
advanced
flakes innovation and low energy consumption, and the
comprehensive energy consumption per unit
product has reached the domestic advanced level
Production capacity of main products
Please refer to one of the Company's business summary in Section III, the main business part
of the Company during the reporting period.
Product categories in major chemical parks
Major chemical parks Product Category
PMB Industrial Park Petrochemical Industry Chain Products
Linjiang High-tech Industrial Park Petrochemical Industry Chain Products
Haining Economic Development Zone (Jianshan New Petrochemical Industry Chain Products
District)
Suqian High-tech Industrial Development Zone Petrochemical Industry Chain Products
59
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Major chemical parks Product Category
Jiaxing Xiuzhou High-tech Industrial Development Zone Petrochemical Industry Chain Products
Shaxi Town Industrial Park Petrochemical Industry Chain Products
Ningbo Petrochemical Economic and Technological Petrochemical Industry Chain Products
Development Zone
Dalian Economic and Technological Development Zone Petrochemical Industry Chain Products
Yangpu Economic Development Zone Petrochemical Industry Chain Products
EIA approvals that are being applied for or newly obtained during the reporting period
Approved Approval Date of
No. Item Approving unit
unit number approval
Technology transformation project of Jiaxing Municipal
Haining JHHJ
Haining Hengyi New Material Co., Ltd. April 10, Ecology and
1 New (2020)
with annual production of 500,000 tons 2020 Environment
Materials No. 61
of new functional fiber Bureau
Technical transformation project of
Hangzhou
Hengyi traditional coal-based hydrogen HHQHPP
February Municipal Ecology
2 caprolacta preparation standard upgrading and [2021]
10, 2020 and Environment
m by-product synthetic ammonia combined No. 5
Bureau
plant
Qinzhou
The project of annual production of 1.2
Guangxi QGHGZ Municipal
million tons of caprolactam-polyamide December
3 New [2020] Ecological
industry integration and supporting 25, 2020
Materials No. 24 Environment
projects
Bureau
During the reporting period, abnormally shutdown occurred to listed companies.
□ Applicable √ Not applicable
Relevant approvals, permits, qualifications and validity period
Mainly include: Safe production license, pollutant discharging permit, cargo transportation
permit. Engaged in petroleum processing and petroleum trading industries.
60
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Approved Name of Issuing Valid
No. Approval department
unit qualification/license time period
Haining New Pollutant Jiaxing Municipal Ecology and July 28, July 27,
1
Materials discharging permit Environment Bureau 2020 2023
Haining
Pollutant Jiaxing Municipal Ecology and July 23, July 22,
2 Thermoelectri
discharging permit Environment Bureau 2020 2025
c
Jiaxing Pollutant Jiaxing Municipal Ecology and Decembe Decembe
3
Yipeng discharging permit Environment Bureau r 2, 2020 r 1, 2022
Port Business permit
Jiaxing Certification of the Jiaxing Ports and Shipping Administration March March
4
Yipeng People's Republic of Bureau of Zhejiang Province 13, 2020 11, 2023
China
Registration
Certificate for using
Jiaxing Jiaxing Ports and Shipping Administration August 8, March
5 harbor frontage of
Yipeng Bureau of Zhejiang Province 2017 11, 2054
inland port of
Jiaxing
Decembe Decembe
Taicang Pollutant Suzhou Municipal Ecological
6 r 31, r 30,
Yifeng discharging permit Environment Bureau
2019 2022
Pollutant Quanzhou Municipal Ecological April 8, April 7,
7 Fujian Yijin
discharging permit Environment Bureau 2021 2026
Hengyi Pollutant Hangzhou Municipal Ecology and August August
8
Limited discharging permit Environment Bureau 28, 2020 27, 2023
Hengyi Pollutant Environmental Protection Bureau of Novembe Novembe
9
polymer discharging permit Xiaoshan District r 6, 2018 r 5, 2021
Hangzhou Pollutant Environmental Protection Bureau of Novembe Novembe
10
Yixi discharging permit Xiaoshan District r 5, 2018 r 4, 2021
Hangzhou Pollutant Hangzhou Municipal Ecology and February February
11
Yixi discharging permit Environment Bureau 2, 2021 1, 2024
Novembe Novembe
Hengyi Pollutant Environmental Protection Bureau of
12 r 26, r 25,
Hi-tech discharging permit Dajiangdong Industrial Cluster Area
2018 2021
Shuangtu Novembe Novembe
Pollutant Environmental Protection Bureau of
13 New r 27, r 26,
discharging permit Dajiangdong Industrial Cluster Area
Materials 2018 2021
Qiantang New District Bureau of
Hengyi Pollutant May 9, June 22,
14 Hangzhou Municipal Ecology and
caprolactam discharging permit 2020 2025
Environment Bureau
Registration Zhejiang Provincial Hazardous Chemicals
Decembe Decembe
Hengyi certificate for Registration Center, Chemical
15 r 20, r 19,
caprolactam hazardous Registration Center of the Division of
2019 2022
Chemicals Emergency Management
61
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Approved Name of Issuing Valid
No. Approval department
unit qualification/license time period
Decembe
Hengyi Safety production Zhejiang Provincial Department of Decembe
16 r 16,
caprolactam license Emergency Management r 5, 2022
2020
Safety production Decembe
Hengyi Hangzhou Emergency Management January
17 standardization r 13,
Hi-tech Bureau 1, 2023
certificate 2019
Safety production Decembe
Hangzhou Hangzhou Emergency Management January
18 standardization r 13,
Yijing Bureau 1, 2023
certificate 2019
Safety production
Hengyi Zhejiang Provincial Department of June 1, June 1,
19 standardization
caprolactam Emergency Management 2020 2023
certificate
Safety production
Hengyi Hangzhou Emergency Management July 15, August
20 standardization
Limited Bureau 2020 1, 2023
certificate
Shuangtu Safety production Septemb
Hangzhou Emergency Management October
21 New standardization er 9,
Bureau 1, 2023
Materials certificate 2020
Safety production
Hengyi Hangzhou Emergency Management March April 1,
22 standardization
polymer Bureau 16, 2020 2023
certificate
Safety production Decembe
Taicang Administration of Work Safety Decembe
23 standardization r 28,
Yifeng Supervision of Taicang r 1, 2021
certificate 2018
Engaged in petroleum processing and petroleum trading industries
√ Yes □ No
Engaged in the fertilizer industry
□Yes √No
Engaged in the pesticide industry
□Yes √No
Engaged in chlor-alkali and soda ash industry
□Yes √No
Engaged in chemical fiber industry
√ Yes □ No
Engaged in plastics and rubber industry
□Yes √No
62
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
II. Main business analysis
1 Overview
Refer to "I. Overview" related content in "Discussion and Analysis of Business Conditions".
2. Income and cost
(1) Composition of operating income
Currency Unit: RMB
2020 2019 Year-on-ye
ar increase
Proportion of Proportion of
Amount Amount and
operating income operating income
decrease
Total operating
86,429,630,191.87 100% 79,620,543,631.74 100% 8.55%
income
Sector
Petrochemical
23,788,931,297.46 27.52% 14,023,110,039.95 17.62% 69.64%
industry
Chemical fiber
24,934,786,768.51 28.85% 37,440,083,098.09 47.02% -33.40%
industry
Supply Chain
37,705,912,125.90 43.63% 28,157,350,493.70 35.36% 33.91%
Service
Sub-product
Refining
14,458,642,505.91 16.73% 2,207,888,637.18 2.77% 554.86%
products
Chemical
4,286,129,273.42 4.96% 336,001,420.95 0.42% 1175.63%
products
PTA 4,759,627,567.43 5.51% 11,479,219,981.82 14.42% -58.54%
PIA 284,531,950.70 0.32% / / /
Polyester fiber 21,978,130,175.76 25.43% 32,689,228,369.81 41.06% -32.77%
63
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Wafering 2,956,656,592.75 3.42% 4,750,854,728.28 5.97% -37.77%
Supply Chain
37,705,912,125.90 43.63% 28,157,350,493.70 35.36% 33.91%
Service
Region
Domestic 63,753,435,093.36 73.76% 65,683,827,085.40 82.50% -2.94%
Overseas 22,676,195,098.51 26.24% 13,936,716,546.34 17.50% 62.71%
(2) The industry, product or region that accounts for more than 10% of the Company’s
operating income or operating profit
The Company shall comply with the disclosure requirements of Shenzhen Stock Exchange
Industry Information Disclosure Guidelines No.18-Listed Companies Engaged in Chemical
Industry Related Business.
Currency Unit: RMB
Gross
Operating
Operating costs margin
income
increased or increased or
increased or
Gross decreased decreased
Operating income Operating cost decreased
margin compared to the compared
compared with
same period with the
the same period
last year same period
last year
last year
Sector
Petrochemical
23,788,931,297.46 21,710,310,664.79 8.74% 69.64% 76.75% -3.67%
industry
Chemical
24,934,786,768.51 21,826,970,006.07 12.46% -33.40% -35.89% 3.40%
fiber industry
Supply Chain
37,705,912,125.90 36,912,550,026.08 2.10% 33.91% 33.42% 0.36%
Service
Sub-product
64
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Refining
14,458,642,505.91 13,892,553,804.77 3.92% 554.86% 806.84% -26.70%
products
Chemical
4,286,129,273.42 3,371,435,627.07 21.34% 1,175.63% 1,150.20% 1.60%
products
PTA 4,759,627,567.43 4,235,879,177.83 11.00% -58.54% -59.59% 2.31%
PIA 284,531,950.70 210,442,055.12 26.04% / / /
Polyester
21,978,130,175.76 19,226,194,309.13 12.52% -32.77% -35.21% 3.30%
fiber
Wafering 2,956,656,592.75 2,600,775,696.94 12.04% -37.77% -40.49% 4.03%
Supply Chain
37,705,912,125.90 36,912,550,026.08 2.10% 33.91% 33.42% 0.36%
Service
Region
Domestic 63,753,435,093.36 59,379,636,366.49 6.86% -2.94% -2.71% -0.22%
Overseas 22,676,195,098.51 21,070,194,330.45 7.08% 62.71% 62.56% 0.09%
When the statistical scope of the Company's main business data is adjusted during the
reporting period, the Company's main business data adjusted according to the scope at the
end of the reporting period in the recent year
□ Applicable √ Not applicable
Operating income or net profit generated by overseas business accounts for more than 10% of
the Company's audited operating income or net profit in the recent fiscal year
Name of The specific
The impact of taxation policies on overseas The Company's
overseas situation of the
business during the reporting period response
business development
The overall tax burden during the reporting The project is highly
Brunei Refining period was relatively small, and Brunei did support by China and
High load and
and not levy personal income tax, business tax, Brunei and enjoys
stable
Petrochemical payroll taxes, production tax and export long-term tax
operation
Project tax. The project has a local pioneer incentives and other
enterprise certificate and an export incentive policies
65
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
enterprise certificate, and can enjoy a
longer-term corporate income tax relief
(3) Whether the Company's physical sales income is greater than the labor income
Year-on-year increase
Category Item Unit 2020 2019
and decrease
Sales volume Ten thousand tons 583.81 54.93 962.83%
Refining
Production Ten thousand tons 592.24 60.71 875.52%
products
Inventory Ten thousand tons 14.21 5.78 145.85%
Sales volume Ten thousand tons 219.17 12.88 1,601.63%
Chemical
Production Ten thousand tons 226.58 16.66 1,260.02%
products
Inventory Ten thousand tons 11.19 3.78 195.77%
Sales volume Ten thousand tons 484.32 503.64 -3.84%
PTA Production Ten thousand tons 485.02 503.38 -3.65%
Inventory Ten thousand tons 2.31 1.61 43.48%
Sales volume Ten thousand tons 5.51 / /
PIA Production Ten thousand tons 8.67 / /
Inventory Ten thousand tons 3.16 / /
Sales volume Ten thousand tons 605.6 559.29 8.28%
Polyester
Production Ten thousand tons 650.27 562.71 15.56%
products
Inventory Ten thousand tons 62.56 17.89 249.64%
Explanation of the reason why relevant data has changed more than 30% year-on-year
1） During the reporting period, the Brunei Refining and Petrochemical project of the
Company operated stably under high load, so the production, sales and inventory of its refined oil
products and chemical products increased significantly compared with the same period last year.
2） During the reporting period, its main reason was that some of the new production capacity
of subsidiaries such as Haining New Materials and Jiaxing Yipeng were put into production, and the
impact caused by the stockpiling before the Spring Festival as a reasonable inventory change.
66
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
(4) The implementation of major sales contracts signed by the Company as of the reporting
period
□ Applicable √ Not applicable
(5) Composition of operating costs
Industry and product classification
Industry Classification of Hengyi Brunei
Currency Unit: RMB
2020 2019 Year-on-year
Category Item Proportion of Proportion of increase and
Amount Amount
operating cost operating cost decrease
Raw materials 12,585,308,784.97 90.59% 1,267,816,583.44 82.76% 892.68%
Energy 272,669,717.70 1.96% 35,530,302.02 2.32% 667.43%
Refining
Depreciation
products 1,034,575,302.10 7.45% 228,628,253.65 14.92% 352.51%
and others
Total 13,892,553,804.77 100.00% 1,531,975,139.11 100.00% 806.84%
Raw materials 3,043,593,007.52 90.28% 240,231,973.62 89.08% 1,166.94%
Energy 165,221,931.47 4.90% 17,443,129.52 6.47% 847.20%
Chemical
Depreciation
products 162,620,688.08 4.82% 11,997,575.82 4.45% 1,255.45%
and others
Total 3,371,435,627.07 100.00% 269,672,678.96 100.00% 1,150.20%
Domestic Industrial Product Classification
Currency Unit: RMB
2020 2019 Year-on-year
Product
Item Proportion of Proportion of increase and
category Amount Amount
operating cost operating cost decrease
Raw materials 142,735,702.53 67.83% / / /
PIA
Energy 27,026,909.89 12.84% / / /
products
Depreciation 40,679,442.69 19.33% / / /
67
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
and others
Total 210,442,055.12 100.00% / / /
Raw materials 3,750,955,081.22 88.55% 9,654,704,824.15 92.11% -61.15%
Energy 138,178,717.94 3.26% 223,431,486.12 2.13% -38.16%
PTA
Depreciation
product 346,745,378.67 8.19% 603,035,291.29 5.75% -42.50%
and others
Total 4,235,879,177.83 100.00% 10,481,171,601.56 100.00% -59.59%
Raw materials 17,480,962,763.20 80.09% 29,308,065,693.20 86.09% -40.35%
Energy 1,410,863,173.13 6.46% 1,612,773,710.02 4.74% -12.52%
Polyester
Depreciation
products 2,935,144,069.73 13.45% 3,124,518,941.50 9.18% -6.06%
and others
Total 21,826,970,006.07 100.00% 34,045,358,344.72 100.00% -35.89%
Description
(6) Whether there was any change in the scope of consolidation during the reporting period
In 2020, there were 44 subsidiaries included in the company’s consolidation scope. For details,
please refer to Note VIII “Interests in Other Equities”. The Company's scope of consolidation this
year increased by 11 households and decreased by 1 household compared with the previous year.
Please refer to Note VII "Changes in Consolidated Scope" for details.
(7) Major changes or adjustments to the Company’s business, products or services during the
reporting period
□ Applicable √ Not applicable
(8) Circumstances of main sales customers and main suppliers
The Company's main sales customers
Total sales amount of the top five customers (yuan) 14,306,689,029.58
The total sales amount of the top five customers accounted for the proportion of
16.55%
the total annual sales
Percentage of sales from related parties in total annual sales among the top five 0.00%
68
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
customer sales
Profile of the Company's top 5 customers
No. Client name: Sales volume (yuan) Percentage in total annual sales
1 Customer 1 5,151,787,163.76 5.96%
2 Customer 2 3,170,783,127.55 3.67%
3 Customer 3 2,380,895,042.87 2.75%
4 Customer 4 1,869,697,397.32 2.16%
5 Customer 5 1,733,526,298.08 2.01%
Total -- 14,306,689,029.58 16.55%
Other information of major customers
□ Applicable √ Not applicable
Company's main suppliers
Total purchase amount of the top five suppliers (yuan) 25,011,317,723.26
Proportion of the total purchase amount of the top five suppliers to the total 31.09%
annual purchase
Proportion of the purchase amount of related parties in the purchase amount of 7.76%
the top five suppliers to the total annual purchase amount
Information of the Company's top 5 suppliers
No. Name of supplier Purchase amount (yuan) Percentage of total annual purchases
1 Supplier 1 9,936,751,965.54 12.35%
2 Supplier 2 4,230,613,310.70 5.26%
3 Supplier 3 4,021,190,684.43 5.00%
4 Supplier 4 3,800,132,841.33 4.72%
5 Supplier 5 3,022,628,921.27 3.76%
Total -- 25,011,317,723.26 31.09%
Other information of major suppliers
□ Applicable √ Not applicable
69
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
3. Expenses
Currency Unit: RMB
Year-on-year
2020 2019 increase and Description of major changes
decrease
The description is mainly on the adjustment of
Selling sales expenses related to the performance of the
218,109,801.14 455,835,985.78 -52.15%
expense contract to the presentation of operating costs
under the new revenue criteria
The description is mainly on the transportation
fees, lease fees and storage fees related to the
products under the new criteria in management
Administration expenses. In addition, after the Brunei Refining
970,153,607.89 583,493,439.21 66.27%
costs and Petrochemical project was put into
operation, the depreciation of fixed assets and
the salary of management personnel for related
management purposes increased significantly.
The description is mainly on that after the
Brunei project is put into production, the
interest expenditure that meets the capitalization
Financial 2,004,150,317. 1,011,335,714.9
98.17% has decreased; meanwhile, with the expansion
expenses 61 3
of the business scale, the corresponding
financing scale has expanded and the interest
expenditure has increased.
Research and
development 351,969,307.93 492,740,271.96 -28.57%
expenditure
70
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
4. R&D investment
During the reporting period, the Company actively explored new ideas for new materials, new
technology R&D and industrialization, and achieved certain results in new product R&D and
industrialization, R&D platform construction, talent team building, and external cooperation,
mainly focusing on Polyester and polyamide green production technology, chemical manufacturing
technology dedicated to industry chain, functional fiber materials, next-generation bio-based
polyester materials, etc. The current related research and development projects are progressing
smoothly. During the reporting period, the Company’s R&D base in Haining was officially put into
use. The new R&D base integrates small-scale and pilot-scale functions, becoming an important
hardware guarantee for the implementation of the Company’s R&D strategy. Meanwhile, the
Company is actively developing relation with excellent universities in the chemical and materials
fields and vigorously recruit talents in the industry.
A total of 164 patents were applied for in 2020, including 113 invention patents and 51 utility
models. A total of 28 authorized patents were obtained this year, including 8 invention patents and
20 utility models. More than 150 scientific and technological development projects will be
implemented in 2020 (including 2 national key research and development projects, 1 major
international cooperation project in Zhejiang Province, and 1 key high-tech product development
project in Zhejiang Province). The Company's antimony-free environmentally friendly polyester
"Eticont" project with independent intellectual property rights won the first prize of the 2020
Zhejiang Chemical Industry Science and Technology Progress Award.
The Company's R&D investment
2020 2019 Variable ratio
Number of R&D personnel (person) 597 445 34.16%
Proportion of number of R&D personnel 3.29% 2.69% 0.60%
R&D investment amount (yuan) 359,600,062.80 496,257,572.40 -27.54%
R&D investment proportion in operating income 0.42% 0.62% -0.20%
Capitalized amount of R&D investment (yuan) 7,630,754.87 3,517,300.44 116.95%
Proportion of capitalized R&D investment in R&D investment 2.12% 0.71% 1.41%
Reasons for the significant change in the proportion of total R&D investment in operating
71
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
income in the previous year
□ Applicable √ Not applicable
Reasons and explanation of its rationality for the substantial changes in the capitalization rate
of R&D investment
The description is mainly on the increase in R&D personnel and capitalizable R&D expenses
of the subsidiary Zhejiang Henglan Technology Co., Ltd. during the reporting period.
5. Cash flow
Currency Unit: RMB
Year-on-year increase
Item 2020 2019
and decrease
Sub-total of cash inflows from operating activities 97,642,317,743.64 87,825,272,597.30 11.18%
Sub-total of cash outflows from operating
92,628,544,965.69 87,916,398,375.21 5.36%
activities
Net cash flow from operating activities 5,013,772,777.95 -91,125,777.91 5,602.04%
Sub-total of cash inflows from investing activities 1,994,495,592.71 5,101,346,935.31 -60.90%
Sub-total of cash outflows from investing
9,946,968,313.72 18,111,448,942.04 -45.08%
activities
Net cash flow from investing activities -7,952,472,721.01 -13,010,102,006.73 38.87%
Sub-total of cash inflows from financing activities 40,896,350,951.42 41,026,194,049.12 -0.32%
Sub-total of cash outflows from financing
34,988,971,122.60 30,045,808,537.64 16.45%
activities
Net cash flow from financing activities 5,907,379,828.82 10,980,385,511.48 -46.20%
Net increase in cash and cash equivalents 2,713,245,267.65 -2,063,056,660.78 231.52%
Explanation of the main influencing factors of significant year-on-year changes in relevant
data
During the reporting period, the net cash flow from operating activities increased significantly,
mainly because the Brunei Refining and Petrochemical project was put into operation at the end of
2019, the operating funds used increased, and the operating cash outflow at the end of the period
72
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
did not match the corresponding operating cash inflow, resulting in that annual net operating cash
flow is negative in 2019. During the reporting period, as Brunei's refining and petrochemical project
maintained a high-load and stable operation, the Company's net operating cash flow increased
significantly.
The decrease in net cash flow from investment activities was mainly due to the relatively large
payment of investment funds for projects such as Brunei Refining and Petrochemical in the
previous year. The corresponding cash outflows of the projects during the reporting period
decreased.
The decrease in net cash flow from financing activities was mainly due to the decrease in the
Company's cash outflow from investment activities in 2020 compared to 2019, so the net cash
generated from financing activities during the same period decreased.
Explanation of the reason for the significant difference between the Company’s net cash flow
generated from operating activities during the reporting period and the current year’s net
profit
□ Applicable √ Not applicable
73
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
III. Analysis of non-main business
Currency Unit: RMB
Percentage of Whether it is
Amount Explanation of reasons
total profit sustainable
The description is mainly on the accrual of
the investment income of the main business
Investment income 1,691,621,709.35 37.43% joint stock company and the hedging Yes
investment income during the reporting
period
The description is mainly on the changes in
Profit or loss due to
the fair value of foreign exchange and
fair value change in 156,423,385.37 3.46% No
commodity hedging at the end of the
current period
reporting period
The description is mainly on the Company’s
Asset impairment -18,111,009.54 -0.40% No
provision for inventory depreciation
The description is mainly on the business
income that has nothing to do with daily
Non-operating income 14,227,568.48 0.31% No
business activities during the reporting
period
The description is mainly on that donation
Non-operating expenditures and other expenditures that
20,943,094.87 0.46% No
expense have nothing to do with daily business
activities during the reporting period
IV. Analysis of assets and liabilities
1. Major changes in asset composition
The Company implemented the new revenue criteria or the new lease criteria for the first
time since 2020 and adjust and implement the relevant items of the financial statement at the
beginning of the year
74
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
√ Applicable
Currency Unit: RMB
End of 2020 Beginning of 2020
Increase or
Percentage Percentage Description of
decrease in
Amount of total Amount of total major changes
proportion
assets assets
Monetary
10,078,983,803.86 10.92% 7,439,884,788.19 8.67% 2.25%
capital
Accounts
3,879,744,130.04 4.21% 5,890,241,538.78 6.87% -2.66%
receivable
Inventories 9,650,858,867.17 10.46% 9,153,238,548.05 10.67% -0.21%
Long-term
equity 10,062,484,360.52 10.91% 9,260,247,813.26 10.80% 0.11%
investments
Fixed assets 41,579,728,480.95 45.07% 38,775,633,926.67 45.21% -0.14%
Construction in
7,801,532,982.72 8.46% 3,690,131,551.30 4.30% 4.16%
progress
Short-term
26,482,672,125.98 28.70% 23,323,906,006.56 27.20% 1.50%
loans
Long-term
16,609,903,029.23 18.00% 12,733,302,561.13 14.85% 3.15%
loans
2. Assets and liabilities measured at fair value
Currency Unit: RMB
Item Beginning balance Ending balance
Financial assets
1. Transactional financial assets (excluding derivative financial assets) 149,692,516.20 251,904,308.53
2. Derivative financial assets 409,150,395.76 737,015,777.82
3. Other equity instruments investment 600,000.00 5,600,000.00
75
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Subtotal of financial assets 559,442,911.96 994,520,086.35
Financial liabilities 1,399,903.27 145,909,776.80
Other changes
During the reporting period, whether the Company’s main asset measurement attributes have
changed significantly
□Yes √No
3. Restricted asset rights as of the end of the reporting period
Item Book value at the end of the year Reason for restriction
Monetary capital 2,892,657,855.69 Security deposit
Notes receivable and
381,803,585.87 Acceptance bills pledged
receivables financing
Long-term equity investments 5,189,280,189.32 Mortgage loan
Sale and leaseback, financing
Fixed assets 21,933,701,563.05
leases, mortgage loans
Mortgage loans, financing
Intangible assets 638,649,800.63
lease guarantees
Mortgage loans, financing
Construction in progress 4,292,913,047.10
lease guarantees
Total 35,329,006,041.66 --
V. Investment status
1. General condition
Investment amount during the Investment in the same period last
Amount of variation
reporting period (yuan) year (yuan)
3,743,354,861.36 3,565,393,011.36 4.99%
76
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2. Major equity investments obtained during the reporting period
Currency Unit: RMB 10,000
Wheth
Estima Profit and er
Invest Shareh Capita Invest Progress as of Disclosu
Name of Main Amount ted loss of involv
ment olding l Partner ment Product type the balance re date Disclosure index (if any)
investee business Invested incom current ed in a
mode Ratio source period sheet date (if any)
e investment lawsui
t
Petroleum
products, http://www.cninfo.com.cn/new/dis
Capita Ningbo Petroleum
Yisheng chemical Self-o closure/detail?plate=szse&stockCo
l Zhongjin Expen products, July 17,
New products, 5,000 50% wned Completed / 2,576.89 No de=000703&announcementId=120
increas Petrochemical dable chemical 2019
Material production funds 6451916&announcementTime=20
e Co., Ltd. products
and sales, 19-07-17
etc.
Wanxiang
Group
http://www.cninfo.com.cn/new/dis
Company,
Self-o closure/detail?plate=szse&orgId=g
Dongzhan Water Acquis Zhejiang Expen Water January
13,246.19 30% wned Completed / 870.90 No ssz0000703&stockCode=000703&
Shipping transport ition Rongtong dable transport 17, 2020
funds announcementId=1207257962&an
Logistics Co.,
nouncementTime=2020-01-17
Ltd., Chen
Shenghong
Total -- -- 18,246.19 -- -- -- -- -- -- / 3,447.79 -- -- --
77
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
3. Significant non-equity investment in progress during the reporting period
Currency Unit: RMB
Whether
The industry
it is a Cumulative actual
Invest involved Amount invested
fixed investment amount Project Disclosure
Item ment with in this reporting Capital source Disclosure index (if any)
asset as of the end of the progress date (if any)
mode investment period
investme reporting period
project
nt
Chemical
Self-b
Brunei PX Project Promote Yes raw 1,945,445,827.09 1,945,445,827.09 Self-financing 100% / /
uilt
materials
http://www.cninfo.com.cn/new/disclosure/
Brunei Refining and Chemical
Self-b September detail?plate=szse&orgId=gssz0000703&st
Petrochemical Project Phase Yes raw 321,943,808.62 402,295,413.64 Self-financing 0.38%
uilt 16, 2020 ockCode=000703&announcementId=1208
II materials
444483&announcementTime=2020-09-16
New type functional fiber
http://www.cninfo.com.cn/new/disclosure/
project with an annual
Self-b Self-raised and August 29, detail?plate=szse&orgId=gssz0000703&st
output of 566,000 tons of Yes Polyester 863,277,779.84 924,046,018.56 91%
uilt borrowing 2020 ockCode=000703&announcementId=1208
Fujian Yijin Chemical Fiber
325104&announcementTime=2020-08-29
Co., Ltd.
Haining New Material's
annual production capacity http://www.cninfo.com.cn/new/disclosure/
of 500,000 tons of new Self-b Self-raised and August 29, detail?plate=szse&orgId=gssz0000703&st
Yes Polyester 4,844,273,114.87 6,612,617,682.85 72%
functional fiber uilt borrowing 2020 ockCode=000703&announcementId=1208
technological 325105&announcementTime=2020-08-29
transformation project
Differential functional fiber Self-b Yes Polyester 966,302,305.42 2,564,522,334.88 Self-raised and 100% / /
78
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Whether
The industry
it is a Cumulative actual
Invest involved Amount invested
fixed investment amount Project Disclosure
Item ment with in this reporting Capital source Disclosure index (if any)
asset as of the end of the progress date (if any)
mode investment period
investme reporting period
project
nt
upgrading project of Jiaxing uilt borrowing
Yipeng Chemical Fiber Co.,
Ltd.
Total -- -- -- 8,941,242,835.84 12,448,927,277.02 -- -- -- --
79
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
4. Financial asset investment
(1) Securities investment
There was no securities investment in the Company during the reporting period.
(2) Situation of hedging business
Currency Unit: RMB 10,000
The proportion
Actual
of the investment
Initial profit and
Investment amount at the
investment loss
Types of hedging Starting Expiration amount at end of the period
amount of amount
investments date date the end of to the Company’s
hedging during the
the period net assets at the
investment reporting
end of the
period
reporting period
Foreign exchange hedging 64,885 1/2/2020 4/23/2021 107,916 4.50% -213
Commodity hedging 58,161 1/2/2020 9/30/2021 90,491 3.77% 48,988
Total 123,047 -- -- 198,407 8.26% 48,775
Sources of funds for
Company's own funds
hedging investments
Litigation involved (if
None
applicable)
Disclosure date of the
board of directors’
announcement for January 17, 2020
approval of hedging
investment (if any)
Disclosure date of the
announcement of the
shareholders meeting for February 8, 2020
hedging investment
approval (if any)
Risk analysis and control 1. Market risk: When the market changes drastically, the Company may not be able
measures for hedging to fully lock the price of raw materials or products, causing losses. 2. Liquidity risk:
positions during the Operational command for Commodity hedging transactions is issued within the
reporting period (including authority specified in the Company's "Commodity Derivatives Transaction
but not limited to market Management System". If the market fluctuates too much, it may result in forced
risk, liquidity risk, credit liquidation due to insufficient time to replenish the margin. 3. Operational risk: Due
risk, operational risk, legal to the strong professionalism and complexity of futures and forward transactions,
80
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
risk, etc.) there may be accidental losses due to defects in the information system or internal
control. 4. Credit risk: When the price has a significant fluctuation that is
unfavorable to the counterparty, the counterparty may violate the relevant provisions
of the contract and cancel the contract, causing the Company to lose. 5. Legal risk:
Due to changes in the relevant legal system or the counterparty's violation of the
relevant legal system, the contract may not be executed normally, which cause the
loss to the Company. Risk control measures adopted by the Company: The
Company’s board of directors has reviewed and approved the "Foreign Exchange
Derivatives Transaction Management System" and "Commodity Derivatives
Transaction Management System", which stipulate that the Company engages in
hedging investment business, with the hedging as the main purpose and the
speculation and arbitrage trading is prohibited. The Company's business operation
principles, approval authority, internal review process, responsible department and
responsible person, information isolation measures, internal risk reporting system
and risk handling procedures, etc. are stated in the system, which meets the relevant
requirements of the regulatory authorities and meets the needs of actual operations.
The specified risk control measures are practical and effective.
For the changes in market
The market price or the fair value of the product changes during the reporting
prices or product fair
period. The analysis of the fair value of hedging should disclose the specific
values during the reporting
methods used and the setting of related assumptions and parameters. During the
period for invested
reporting period, the Company's hedging investment affected the current profit and
hedging, the analysis of
loss amount: RMB 487.75 million. The Company’s hedging investment is priced at
the fair value of hedging
fair value, and forward foreign exchange is basically determined at the price
should disclose the
provided or obtained by banks, Reuters systems and other pricing service agencies.
specific methods used and
The Company conducts fair value measurement and confirmation every month; the
related assumptions and
transaction price of futures is fair price.
parameter settings
An explanation of whether
No. According to relevant regulations and guidelines of the Ministry of Finance,
the Company’s hedging
"Accounting Standards for Business Enterprises No. 22-Recognition and
accounting policies and
Measurement of Financial Instruments", "Accounting Standards for Business
specific accounting
Enterprises No. 24-Hedging", "Accounting Standards for Business Enterprises No.
principles have changed
23-Transfer of Financial Assets", "Enterprise Accounting Standard No. 37-Financial
significantly during the
Instruments Presentation", the Company carries out corresponding accounting
reporting period compared
treatments for the hedging investment business carried out, and reflect the relevant
with the previous reporting
items of the balance sheet and the income statement.
period
The Company’s hedging investment business for the purpose of hedging is closely
Independent directors' related to the Company’s daily operating needs and complies with relevant laws and
special opinions on the regulations. The Company has established the "Foreign Exchange Derivatives
Company's hedging Transaction Management System" and "Commodity Derivatives Transaction
investment and risk control Management System" strengthens risk management and control, which is conducive
to improving the Company's ability to resist market risks, and there is no situation
81
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
that harms the interests of the Company and all shareholders.
82
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
5. Use of raised funds
(1) Overall use of raised funds
Currency Unit: RMB 10,000
The total The total Proportion Amount
The
amount of amount of Cumulative of the total The total of funds
accumulativ
Year funds raised funds raised total amount amount of amount of raised
e total
of Recruitment Total funds has been for change of funds funds raised funds The purpose and destination of the raised after
amount of
Raisi method raised used during of purpose raised for for the raised has funds not yet used being idle
funds raised
ng the during change of cumulative not been for more
has been
reporting reporting purpose change of used than two
used
period period purpose years
Non-public
issuing of
2016 376,562.33 0 377,633.81 0 0 0.00% 0 / 0
shares in
2015
As of December 31, 2020, RMB
Issue shares
44,155,400 is temporarily stored in the
to purchase
Company's special account for raised
assets and
2019 291,091.12 4,849.09 288,705.07 156,300 156,300 53.69% 4,415.54 funds, the raised funds are ready to be 0
raise
used for intelligent upgrading and
matching
transformation and differential fiber
funds
energy-saving and consumption-reducing
83
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
upgrading projects.
Public
issuance of
As of December 31, 2020, the Company
convertible
2020 198,737.74 198,737.74 198,737.74 0 0 0.00% 239.77 has raised funds in the special account 0
corporate
balance of RMB 2,397,700.
bonds in
2020
Corporate
2020 99,550.00 99,550.00 99,550.00 0 0 0 0 / 0
bond
Total 965,941.19 303,136.83 964,626.62 156,300.00 156,300.00 16.18% 4,655.31 0
Description of the overall use of raised funds
Approved by the China Securities Regulatory Commission Securities Regulatory Commission [2016] No. 1320 document, and approved by the Shenzhen Stock
Exchange, the Company non-publicly issued 316,666,666 RMB ordinary shares (A shares) to eligible investors, approved by Ruihua Certified Public Accountants
(The special general partnership) verified that a total of RMB 3,799,999,992.00 was raised. After deducting the underwriting sponsorship fee and related issuance
expenses, the Company’s net fund raised this time was RMB 3,765,623,325.33. As of December 31, 2019, the Company has used the raised funds of RMB
3,776,338,100, of which: RMB 333,207,300 was used in 2016, RMB 3,208,492,800 was used in 2017, and 234,637,900 yuan was used in 2018. The funds raised in
this period are all used in the Brunei PMB petrochemical project.
Approved by the China National Securities Supervision and Management Committee [2018] No. 1937 document, and approved by the Shenzhen Stock Exchange,
the Company non-publicly issued 213,768,115 RMB ordinary shares (A shares) to eligible investors, approved by Ruihua public accounting firm (special general
partnership) that a total of RMB 2,949,999,987.00 was raised. After deducting brokerage underwriting expenses and related issuance expenses, the actual net
amount of raised funds was RMB 2,910,911,218.99. As of December 31, 2020, the Company has used the raised funds of RMB 2838.5598 million.
Approved by the China Securities Regulatory Commission Securities Regulatory Commission [2020] No. 522 and approved by the Shenzhen Stock Exchange, the
Company publicly issued 20 million convertible corporate bonds to eligible investors, each with a face value of 100 yuan and a total bonds issued is RMB 2 billion,
and the price of transferring share is 11.50 yuan per share, which will be listed on the Shenzhen Stock Exchange on November 16, 2020. The total amount of funds
raised from the public issuance of convertible corporate bonds reaches RMB 2 billion. After deducting the underwriting and sponsorship fees of RMB 11 million
84
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
that have been paid, the remaining amount of RMB 1,989 million will be used for the annual production of 1 million tons of intelligent environmental protection
functional fiber construction project" conducted by Haining Hengyi New Materials Co., Ltd.
Approved by Securities Regulatory License issued by China Securities Regulatory Commission [2018] No. 2141, and approved by the Shenzhen Stock Exchange,
the Company publicly issues corporate bonds of no more than RMB 3 billion to qualified investors. "20 Hengyi 01" was issued on March 11, 2020. After deducting
the underwriting fee, RMB 995.50 million was raised to repay the Company's interest-bearing debts and supplement liquidity.
85
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
(2) Projects committed to raising funds
Currency Unit: RMB 10,000
Whether Investme
Date Wheth
Committed the Total Cumulati nt Whether
when the Benefits er to
investment project committe Amount ve progress the project
Adjusted project realized achieve
projects and has been d invested investme as of the feasibility
total reaches during the
project changed investme in this nt amount end of has
investme its the expecte
targeted by (includi nt of reporting as of the the changed
nt (1) intended reportin d
over-raised ng some raised period end of the period significant
usable g period benefit
funds changes funds period (2) (3) = (2)/ ly
status s
) (1)
Committed investment projects
Brunei PMB
376,562. 376,562. 377,633.8 Novemb $6,919.
Petrochemic No 0 100.28% No No
33 33 1 er 2019 50
al Project
Upgrading
and
transformatio
n project of
No more
differential August 2,919.8
No than 93,500 0 93,647.49 100.16% No No
functional 2020 3
93,500
fiber with an
annual
output of
500,000 tons
Intelligent No more
upgrading No than 28,170 3,725.86 25,541.41 90.67% N/A N/A N/A No
project 28,170
Differential
fiber energy
saving and
consumption No more
May
reduction No than 8,500 0 8,399.34 98.82% N/A N/A No
2019
upgrading 8,500
and
transformatio
n project
Environment No more
al protection Yes than 416.05 0 416.05 100.00% N/A N/A N/A No
functional 141,500
86
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
fiber
upgrading
project with
an annual
output of
250,000 tons
Intelligent No more
upgrading Yes than 5,283.95 153.64 3,406.99 64.48% N/A N/A N/A No
project 20,500
Intelligent
environment
al protection Part of
functional the
No more
fiber 198,737. 198,737.7 planned 7,124.1
No than 200,000 99.37% N/A No
construction 74 4 availabili 9
200,000
project with ty in
an annual 2020
output of 1
million tons
Subtotal of No more
committed than 712,432. 202,617. 707,782.8
-- -- -- -- --
investment 868,732. 33 24 3
projects 33
Project
targeted by
0 0 0 0 /
over-raised
funds
No more
than 712,432. 202,617. 707,782.8
Total /
868,732. 33 24 3
33
Circumstanc
es and
reasons for
not reaching
the planned
None
schedule or
expected
benefits (by
specific
projects)
Description N/A
87
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
of major
changes in
the
feasibility of
the project
The amount,
purpose and
use progress
N/A
of
over-raised
funds
Changes in
the
implementati
on location
N/A
of
fund-raising
investment
projects
Adjustments
to the
implementati
on of N/A
fund-raising
investment
projects
Applicable
According to the Proposal on the Company’s Public Issuance of Convertible Corporate Bonds
approved by the Company’s 29th meeting of the 10th Board of Directors on April 25, 2019 and the
resolution of 2018 Annual General Meeting of Shareholders on May 9, 2019, it is agreed that before
Preliminary the funds raised from the issuance of convertible corporate bonds are fully funded, if the Company
investment has used self-raised funds to invest in the construction of the above-mentioned projects, it shall be
and replaced in accordance with the procedures prescribed by relevant laws and regulations after the
replacement funds raised are fully funded. As of October 23, 2020, the Company invested RMB
of raised 4,606,157,244.19 of self-raised funds in advance into the above-mentioned raised funds investment
funds project, deducting RMB 756,000,000.00 from the non-public issuance of RMB common stocks
investment raised by the Company to specific targets on January 30, 2019, as the supporting funds for the
projects construction of intelligent environmentally-friendly functional fibers with an annual output of 1
million tons, the remaining amount is RMB 3,850,157,244.19. The Company decided to replace the
self-raised funds of RMB 1,987,377,358.49 with the raised funds for the investment projects
invested in advance. As of December 31, 2020, the Company has replaced the self-raised funds of
RMB 1,987,377,358.49.
88
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Temporarily
supplement
liquidity with N/A
idle raised
funds
The amount
and reason of
the
fund-raising
balance in N/A
the
implementati
on of the
project
As of December 31, 2020, the raised funds of RMB 44,155,400 temporarily stored in the
Use and
Company's special fund-raising account are ready to be used for intelligent upgrading and
destination
transformation projects, differential fiber energy-saving and consumption-reducing upgrading and
of unused
transformation projects, and the temporary storage of RMB 2,397,700 is used for intelligent
raised funds
environmental protection functional fiber construction projects.
Problems or
other
circumstance
s in the use N/A
and
disclosure of
raised funds
(3) Changes in the projects with raised funds
The total Date Benef
Actual
amount when its Whet Whether the
invest Actual
of funds Investment the realiz her to feasibility
ment cumulative
to be progress project ed achie of the
amount investment
The project Corresponding invested as of the reaches durin ve the project after
during amount as
after change original commitment in the end of the its g the expec the change
the of the end of
project period intende report ted has changed
reporti the period
after the (3)=(2)/(1) d ing benef significantl
ng (2)
change usable perio its y
period
(1) status d
Intelligent upgrading and Part of
environmen transformation the 7,124
75,600 969.59 76,593.79 101.31% N/A No
tal projects with an planne .19
protection annual output of d
89
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
functional 250,000 tons of availab
fiber environmentally ility in
construction friendly functional 2020
project with fiber, intelligent
an annual upgrading and
output of 1 transformation
million tons projects (Taicang
Yifeng)
upgrading and
transformation
Acquired projects with an
100% annual output of
equity of 250,000 tons of
Hangzhou environmentally 7,023
80,700 0 80,700 100.00% N/A N/A No
Yijing friendly functional .19
Chemical fiber, intelligent
Fiber Co., upgrading and
Ltd. transformation
projects (Taicang
Yifeng)
14,14
Total -- 156,300 969.59 157,293.79 -- -- -- --
7.38
In order to improve the efficiency of the use of raised funds, the
Company held the 29th meeting of the tenth board of directors on
April 25, 2019. The "Proposal on Changing the Use of Part of the
Explanation of reasons for change, Raised Funds and Related Transactions" was reviewed and adopted,
decision-making procedures and and the use of raised funds for the environmentally friendly
information disclosure (by specific items) functional fiber upgrading project (Phase II) with annual production
of 250,000 tons and intelligent upgrading project (Taicang Yifeng)
was cancelled, the remaining funds raised from these two projects
will be invested in new projects.
The situation and reasons for not reaching
the planned progress or expected benefits N/A
(by specific projects)
Explanation of major changes in the
N/A
feasibility of the project after the change
VI. Major assets and equity sales
1. Sales of major assets
The Company did not sell any major assets during the reporting period.
90
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2. The sale of major equity
□ Applicable √ Not applicable
7. Analysis of major holding and shareholding companies
Major subsidiaries and shareholding companies that have an impact on the Company’s net profit by
more than 10%
Currency Unit: RMB 10,000
Type of
Company Main Registere Operating Operating
subsidiar Total assets Net assets Net profit
Name business d capital income profit
y
Refining and 1 billion
Hengyi Subsidiar
petrochemica US 3,635,668.24 734,242.95 2,321,258.54 47,853.39 47,747.33
Brunei y
l dollars
514,447,1
Zhejiang Subsidiar
PTA 00 US 1,565,487.2 871,522.55 2,352,467.7 152,596.71 109,630.01
Yisheng y
dollars
Ningbo
Subsidiar
Hengyi PTA 2,000 284,035.83 92,440.2 1,431,043.73 74,217.78 67,946.74
y
Trade
Yisheng Joint
Investmen stock PTA 201,800 1,682,012.42 771,515.6 2,536,416.86 122,694.19 109,206.53
t company
Joint
Hainan Yi
stock PTA 358,000 1,021,744.86 397,725.04 1,808,764.93 115,573.2 98,267.26
Sheng
company
Polyester
Hengyi Subsidiar
chips, POY, 28,074 252,542.03 104,801.11 349,464.95 11,797.92 10,768.95
Polymer y
etc.
Polyester
Hengyi Subsidiar
chips, POY, 275,725 1,117,219.86 495,420 988,395.09 33,737.05 32,287.47
Hi-tech y
etc.
Taicang Subsidiar
POY 77,100 229,654.21 109,060.52 245,351.87 14,353.29 10,920.28
Yifeng y
Shuangtu
Subsidiar POY, FDY,
New 60,000 423,595.34 201,498.38 599,804.4 30,056.05 29,155.51
y chips
Material
Hangzhou Subsidiar FDY, POY,
100,000 298,796.88 108,196.54 337,406.72 8,482.07 7,023.19
Yijing y DTY, chips
91
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Jiaxing Subsidiar
FDY 300,000 438,160.42 276,041.42 354,682.88 17,770.01 14,950.54
Yipeng y
Hengyi Subsidiar
DTY 300,000 3,523,380.86 775,873.77 3,719,091.6 101,169.04 101,404.67
Limited y
Hengyi
Subsidiar
caprolacta CPL 120,000 584,030.14 228,962.04 537,192.95 32,633.96 21,365.03
y
m
Hong 150,950
Subsidiar Investment
Kong US 3,658,052.13 1,226,682.38 2,473,752.13 16,607.18 16,074.76
y and trade
Tianyi dollars
China Joint
Zheshang stock Finance 2,126,870 204,822,500 13,254,300 4,770,300 1,447,100 1,255,900
Bank company
Acquisition and disposal of subsidiaries during the reporting period
Methods of acquiring and disposing of
Company Name
subsidiaries during the reporting period
Guangxi Hengyi New Material Co., Ltd. Acquisition
Guangxi Hengyi Shunqi Trading Co., Ltd. Establishment
Jiaxing Hengyu Trading Co., Ltd. Establishment
Hainan Hengjing Trading Co., Ltd. Establishment
Haining Lantai New Material Co., Ltd. Establishment
Hangzhou Yitong New Material Co., Ltd. Establishment
Haining Yixin Logistics Co., Ltd. Establishment
Hangzhou Jingxin Supply Chain Management Co., Ltd. Establishment
Guangxi Hengyi Environmental Technology Co., Ltd. Establishment
Zhejiang Hengyi Hanlin Real Estate Co., Ltd. Establishment
Ningbo Hengyi Logistics Co., Ltd. Disposal
Description of the main holding and shareholding companies
(1) Hengyi Limited
The Company directly holds 99.72% of the shares of Zhejiang Hengyi Petrochemical Co., Ltd.
(actually enjoys 100% equity), and Hengyi’s registered capital is RMB 3 billion. The Company’s
business scope is the production, processing and sales of chemical fibers, chemical raw materials
92
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
(excluding dangerous goods); operating import and export business.
(2) Zhejiang Yisheng
The Company holds 70% of Zhejiang Yisheng Petrochemical Co., Ltd. shares through
Zhejiang Hengyi Petrochemical Co., Ltd. Zhejiang Yisheng has a registered capital of
US$514,447,100. The Company's business scope: Production of purified terephthalic acid (PTA)
and sales of self-produced products. The Company currently has three large-scale PTA production
lines with actual PTA production capacity of 5 million tons per year and PIA production capacity of
30 million tons.
(3) Ningbo Hengyi Trading
The Company holds a total of 70% of Ningbo Hengyi Trading Co., Ltd. shares through
Zhejiang Hengyi Petrochemical Co., Ltd.. Ningbo Hengyi Trading has a registered capital of RMB
20 million. The Company's business scope: Wholesale of hazardous chemicals (instruments trade)
(Please refer to YLAJ (2018) 0084 "Dangerous Chemicals Business Permit” for details of the
business scope) (within the validity period of the permit). Wholesale and retail of chemical raw
materials and products; self-operate and act as agent for the import and export business of various
goods and technologies (except for goods and technologies that are restricted by the state or
prohibited for import and export).
(4) Yisheng Investment
The Company holds a total of 30% of Dalian Yisheng Investment Co., Ltd. shares through
Zhejiang Hengyi Petrochemical Co., Ltd. Yisheng Investment has a registered capital of RMB 2.018
billion. The Company's business scope: Project investment, domestic general trade, import and
export of goods, import and export of technology, intermediary agency of trade.
(5) Hainan Yisheng
The Company holds 50% of Hainan Yisheng's shares through Zhejiang Hengyi Petrochemical
Co., Ltd. Hainan Yisheng has a registered capital of RMB 3.58 billion. The Company's business
scope covers the production, processing, wholesale and retail of purified terephthalic acid, polyester
chips, polyester bottle flakes, polyester staple fiber, POY yarn, FDY yarn, crude cobalt manganese
oxide, chemical fiber raw material; operation of p-xylene (PX), acetic acid, ethylene glycol;
93
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
self-operate and act as agent for import and export of various commodities and technologies.
Terminal facility operations, loading and unloading general cargo services in the jetty area, jetty
tugboat operations, ship service business operations, providing ships with fresh water, ship
pollutants (oily sewage, residual oil, tank washing water, domestic sewage and garbage) reception
and containment Oil boom supply service.
(6) Hengyi Polymer
The Company holds 53.43% of the shares of Zhejiang Hengyi Polymer Co., Ltd. through
Zhejiang Hengyi Petrochemical Co., Ltd. (actually holds 60% of the shares). The registered capital
of Hengyi Polymer reaches RMB 280.74 million. The Company's business scope covers the
production, processing and sales of polyester chips, POY yarn, chemical fiber raw materials, textile
fabrics, and clothing. Since May 2001, the Company took the lead in investing in
domestically-made melt direct spinning production lines in China.
(7) Hengyi High-tech
The Company holds 90.67% of the equity of Zhejiang Hengyi High-tech Materials Co., Ltd.
through Zhejiang Hengyi Petrochemical Co., Ltd. The business scope of Hengyi High-tech:
Production, processing and sales of polyester chips, POY yarn, FDY yarn, chemical fiber raw
materials; operating the export business of the Company’s self-produced products and technologies
and the import business of self-use products and technologies (the items prohibited or restricted by
national laws and regulations excluded); all other legal projects that do not need to be submitted for
approval.
(8) Hengyi Caprolactam
The Company holds 50% equity of Zhejiang Baling Hengyi Caprolactam Co., Ltd. through
Zhejiang Hengyi Petrochemical Co., Ltd. Baling Hengyi caprolactam has a registered capital of
RMB 1.2 billion, and its business scope: Preparation for the production of caprolactam,
cyclohexane, cyclohexanone, cyclohexanol, ammonium sulfate, soda ash, sulfuric acid, hydrogen
peroxide solution and other downstream products produced by benzene hydrogenation, chemical
raw materials project.
(9) Hong Kong Tianyi
94
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The Company holds 100% equity of Hong Kong Tianyi International Holdings Co., Ltd.
through Zhejiang Hengyi Petrochemical Co., Ltd. Hong Kong Tianyi has a registered capital of
US$1, 509.5 million, and its business scope involves investment and trade.
(10) Hengyi Brunei
The Company holds 70% equity of Hengyi Industries Sdn Bhd. through Hong Kong Tianyi
International Holdings Co., Ltd. Hengyi Brunei has a registered capital of US$1 billion, and its
business scope: petroleum refining. After the Company is established, it will have a crude oil
processing design capacity of 8 million tons per year.
(11) Zheshang Bank
The Company, through its subsidiary Zhejiang Hengyi Petrochemical Co., Ltd. and its indirect
subsidiary Zhejiang Hengyi High-tech Material Co., Ltd., holds a total of 748,069,283 shares in
Zheshang Bank, accounting for 3.52% of the total share capital of Zheshang Bank. Business scope:
Operating financial business (see the approval of the China Banking and Insurance Regulatory
Commission for details). The Company was duly established in 2004 and is one of the 12 national
joint-stock commercial banks approved by the China Banking and Insurance Regulatory
Commission. Zheshang Bank was listed on the main board of the Hong Kong Stock Exchange on
March 30, 2016, stock symbol: 02016. HK; and it was listed on Shanghai Stock Exchange on
November 26, 2019, stock symbol: 601916.SH.
(12) Jiaxing Yipeng
The Company holds 100% equity of Jiaxing Yipeng Chemical Fiber Co., Ltd. Jiaxing Yipeng
has a registered capital of 3 billion yuan and is mainly engaged in the production and sales of civil
polyester filaments and fiber-grade polyester chips. Its products are mainly FDY and fiber-grade
polyester chips.
(13) Taicang Yifeng
The Company holds 100% equity of Taicang Yifeng Chemical Fiber Co., Ltd. With a
registered capital of RMB 771 million, Taicang Yifeng is mainly engaged in the production and
sales of civil polyester filaments and fiber-grade polyester chips. The products are mainly POY and
fiber-grade polyester chips.
95
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
(14) Shuangtu New Material
The Company holds 100% equity of Zhejiang Shuangtu New Material Co., Ltd. With a
registered capital of 60 million yuan, Shuangtu New Material is mainly engaged in the production
and sales of civil polyester filaments and fiber-grade polyester chips. The products are mainly FDY,
POY and fiber-grade polyester chips.
(15) Hangzhou Yijing
The Company holds 100% equity of Hangzhou Yijing Chemical Fiber Co., Ltd. With a
registered capital of RMB 1 billion, Hangzhou Yitong is mainly engaged in the production,
processing and sales of polyester chips, polyester filaments, chemical fiber raw materials, etc. The
main products are FDY, POY and DTY.
VIII The situation of the structured entities controlled by the Company
□ Applicable √ Not applicable
IX. Prospects for the Company's future development
1) Development strategy of Company
The Company proactively adapts to economic changes, reshapes entrepreneurial passion, and
strictly observes the two bottom lines of legal compliance and safe production. Be firm in
development concept, adhere to the unchanged direction of industry strategy. The Company
continues to insist on consolidating, highlighting and optimizing the core competitiveness of the
main business, promote intelligent manufacturing, implement lean production, increase scientific
research and innovation, improve product quality, enhances operational efficiency, expand and
strengthen the petrochemical fiber industry chain, and improve the industrial chain driven by dual
wheels of "polyester + polyamide", deepens the multi-level and three-dimensional industrial layout
of "Petrochemical +". In 2021, the Company will rely on its strategic development plan to further
consolidate and enhance the main competitiveness of petrochemicals, realize resource sharing,
industrial coordination, and comprehensively enhance comprehensive competitiveness, and strive to
build the Company into one of the world's first-class petrochemical industry groups.
96
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2) Industry Outlook
See section IV I. Overview (I) Discussion and analysis of business conditions
3) The Company's operational pattern outlook for 2021
1. Based on the Company's strategic development plan, steadily promote the construction
of Brunei Project Phase II
Based on the successful completion of the established goals and tasks of the Hengyi
Petrochemical Plan in 2020, the Company proposes to position itself as a world-class
petrochemical-chemical fiber integrated service provider based on the high-quality development
requirements of the new era and the new pattern of industrial development, and systematically
create the strategic development plan with upstream and downstream synergy, domestic and foreign
linkages and comprehensive competitiveness of matching software and hardware.
2. Create a digital benchmark for the polyester industry and realize the high-quality
development of the "polyester + polyamide" industry
The polyester industry is in a critical period of supply-side structural reform and
transformation and upgrading, and the profit of the industrial chain continues to restructure. With
the full commissioning of the Brunei Refining and Petrochemical project and the planning and
construction of the Project Phase II, the Company's unique "one drop of oil, two pieces of yarn"
industrial layout has been gradually improved, which has laid sound foundation for further
enriching the Company's product categories and improving its product structure to create
differential competitiveness. According to the Company’s strategic development plan, the Company
will focus on the construction of a "5+2+1" production base, continue to expand the scale of
upstream and downstream industries, and further highlight the industry positioning with
downstream polyester as the development core based on the integration of the industrial chain and
the drive of polyester and polyamide. With the further deepening of the combination of big data
applications and industrial production, the role of high-end technology in promoting the future
development of the industry has become more prominent. The Company will continue to uphold the
transformation concept of "manufacturing" to "intelligent manufacturing", always focus on
97
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
enhancing industrial competitiveness, resolutely implement strategic planning, and actively
implement the development and upgrading of the polyester industry.
3. Enhance industrial synergy and improve the integrated management of the supply
chain
In 2021, the Company will continue to adhere to the cost-quality leadership strategy,
strengthen management, and improve product quality through lean production. Clarify the market
positioning and product structure, plan the market promotion cycle and customer introduction and
expansion strategies, and increase the number of quality-oriented customers. Strengthen the linkage
between production and sales, improve product quality, and play a leading role in the market.
The Company will take the strengthening of the intelligent supply chain system as the starting
point, take customer demand as the starting point, and take customer satisfaction as the goal, build
an intelligent system from production line-product-warehouse-logistics-customer, and adopt system
judgment instead of human judgment for order processing, to optimally configure customer needs,
provide customers with the most suitable products and most desirable services, establish a customer
demand-oriented supply chain integration system, and finally achieve closed-loop management of
production, supply, marketing and logistics.
At the same time, the Company will continue to promote the synergy between the upper,
middle and lower reaches of the industrial chain, multiple manufacturing bases, production, sales
and research, and domestic and foreign platforms, so that the synergy is no longer limited to the
mining of economies of scale, and more attention is paid to integrating potential scope economic
benefits and developing better product mix, integrating R&D capabilities, optimizing the supply
chain, and exquisite management processes continue to explore synergies. The Company will
establish and improve the coordination mechanism and evaluation and incentive mechanism, and
make full use of new technologies and platform strategies to create "lean production" and realize
the Company's unified deployment and coordinated integration of the resources of its subsidiaries.
4. Focus on improving the intensity of scientific research and innovation and promote
breakthroughs in industrialization
In 2021, the Company will focus on the industrial layout, continue to increase investment in
98
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
product, technology and management innovation, fully support scientific and technological
innovation-driven development, strengthen R&D and innovation’s continuous contribution to the
Company’s production, operation, and development, and strive to make more achievements in key
technologies and equipment innovation and the research and development of high-value-added
differential products, to build a world-class research and development base for key common
technologies and high-end chemical products in the integration of refining and chemical industry.
To ensure the high-quality development of R&D and innovation work, the Company will
promote the construction of two major sub-platforms with supporting special mechanisms–
production, marketing and research integrated platform & school-enterprise cooperation platform.
The Company will give full play to the functional positioning and advantages of linkage with
universities and scientific research institutes, participate in basic research through various forms and
channels, carry out scientific and technological collaboration at the front end, promote application
implementation at the back end, and create a flexible mechanism with strong R&D motivation, high
conversion efficiency, smooth management and operation, continuously generates new results,
promotes the transformation of results, and actively acts on back-end innovation to build a
multi-agent collaborative innovation ecosystem of technological innovation, application
demonstration, talent training, model innovation and business integration.
5. Deepen the reform of the organizational system and shape a culture of co-creation and
sharing of strugglers
In 2021, the Company will continue to unswervingly promote organizational reforms, build
and improve continuously a young, professional, and international elite team, deepen continuously
sector management, and explore the establishment of a sectorized operation mechanism with
elasticity through a scientific division of labor system and performance management system, give
full play to the initiative of the operating entities. The Company will continue to deepen the reforms
of engineering management, scientific research framework, production sector and audit
management to build an innovative, active, collaborative and efficient operating system.
In order to improve the incentive and innovation mechanism, the Company’s fourth phase of
employee stock ownership plan was reviewed and approved by the Company’s board of directors on
99
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
April 1, 2021. The Company plans to implement a total employee stock ownership plan of no more
than RMB 1.4 billion. The employee stock ownership plan is orientated at company directors,
supervisors, senior managers, regular employees of the Company and its subsidiaries, etc. with the
total number of personnel of not exceeding 4,011.
4) Risks and countermeasures
1. Macroeconomic risks
The Company is engaged in the production and sales of petrochemical and polyester fiber
products. The petrochemical and polyester chemical fiber industry is closely related to the world
economy and domestic economic development. Its product prices and sales are affected by factors
such as macroeconomic fluctuations and changes in supply and demand. With the acceleration of
economic globalization and integration, national macro-control and cyclical fluctuations in the
world economy will have an impact on the development of the industry. If the global economic
growth slows down or a recession occurs, it will directly affect the Company’s business, operating
performance and financial status.
2. Safety and environmental protection production risks
With the increasing awareness of environmental protection and stricter environmental
protection requirements of the government, the Company strictly implements and carries out the
"Safety Production Law of the People's Republic of China", "Environmental Protection Law of the
People's Republic of China" and other related laws and regulations, has been committed to assume
safe and environmentally production and fulfill social responsibility. Since the operation of the main
production body, there has been no significant safety and environmental protection production
events. With the expansion of the Company's production scale and the extension of the industry
chain, how to prevent the occurrence of safety and environmental accidents is the focus of the
Company's management work.
In order to reduce the industry safety and environmental protection production risks, the
Company takes the strengthening of the organization and system construction as the starting point,
further implements the safety and environmental protection production responsibility system.
100
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
According to the arrangements of national 1, 2, and 3 safety standardization, the Company actively
carries out safety standardization compliance acceptance, focusing on building a safety standard
management system. The Company shall implement the dual preventive work mechanism of
hierarchical management and control of safety risks and the detection and management of hidden
dangers, strengthen safety training, increase safety investment, implement the strategy of promoting
safety and security through science and technology, promptly remove hidden safety and
environmental hazards, and eliminate all possibilities of major accidents.
3. The risk of large fluctuations in crude oil prices
The Company is a leading refining and chemical fiber enterprise in China. The cost
composition of the industrial chain in which more than 80% is determined by upstream raw
materials, and the fluctuation of crude oil prices will affect the price fluctuations of various products
in the industrial chain, which intensifies the uncertainty of raw material costs and operating costs, as
well as the accompanying increase in sales risks and fluctuations in corporate benefits. In 2021, the
Company will continue to optimize its inventory strategy to reduce the adverse impact of product
price fluctuations in the industrial chain caused by crude oil price fluctuations on business
operations.
X. Reception of research, communication, interviews and other activities
1. Registration form for reception of research, communication, interviews and other activities
during the reporting period
Rece Rece Recept
Recept The main content of the
ption ption ion Reception Index of the basic
ion discussion and the information
locati meth object object situation of the survey
time provided
on od type
Staff of 50 On the premise of avoiding Please refer to the
Januar Field
Com Institut institutions selective disclosure, public Hengyi
y 6, resea
pany ion including information such as industry Petrochemical's
2020 rch
Everbright status, company business Investor Relations
101
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Securities development and future Activity Record Form
and development plans are on irm.cninfo.com.cn
Shenwan communicated and exchanged. on January 6, 2020
Hongyuan No paper materials are provided.
Group CO.,
LTD
On the premise of avoiding
Staff of 3 Please refer to the
selective disclosure, public
institutions Hengyi
information such as industry
Januar Field including Petrochemical's
Com Institut status, company business
y 13, resea HSBC Investor Relations
pany ion development and future
2020 rch Qianhai and Activity Record Form
development plans are
HSBC Asia on irm.cninfo.com.cn
communicated and exchanged.
Pacific on January 13, 2020
No paper materials are provided.
3W Fund On the premise of avoiding
Please refer to the
Telep Staff of 42 selective disclosure, public
Hengyi
hone institutions information such as industry
Februa Petrochemical's
Com com Institut including status, company business
ry 4, Investor Relations
pany muni ion Sinolink development and future
2020 Activity Record Form
catio Securities development plans are
on irm.cninfo.com.cn
n and 3W communicated and exchanged.
on February 04, 2020
Fund No paper materials are provided.
Telep Staff of 11 On the premise of avoiding Please refer to the
hone mecha institutions selective disclosure, public Hengyi
Februa
Com com nism including information such as industry Petrochemical's
ry 19,
pany muni Institut China status, company business Investor Relations
2020
catio ion Securities development and future Activity Record Form
n Cooperation development plans are on irm.cninfo.com.cn
102
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
and Zizhu communicated and exchanged. on February 19, 2020
Investment No paper materials are provided.
On the premise of avoiding
Staff of 8 Please refer to the
Telep selective disclosure, public
institutions Hengyi
hone information such as industry
Februa including Petrochemical's
Com com Institut status, company business
ry 19, Merchants Investor Relations
pany muni ion development and future
2020 Securities, Activity Record Form
catio development plans are
E Fund, on irm.cninfo.com.cn
n communicated and exchanged.
Yinhua etc. on February 19, 2020
No paper materials are provided.
Staff of 18
On the premise of avoiding
institutions Please refer to the
Telep selective disclosure, public
including Hengyi
hone information such as industry
April CITIC Petrochemical's
Com com Institut status, company business
28, Securities, Investor Relations
pany muni ion development and future
2020 CITIC Activity Record Form
catio development plans are
Capital and on irm.cninfo.com.cn
n communicated and exchanged.
Yingda on April 28, 2020
No paper materials are provided.
Insurance
Staff of 30
On the premise of avoiding
institutions Please refer to the
Telep selective disclosure, public
including Hengyi
hone information such as industry
April TF Petrochemical's
Com com Institut status, company business
28, Securities Investor Relations
pany muni ion development and future
2020 and Ping An Activity Record Form
catio development plans are
Asset on irm.cninfo.com.cn
n communicated and exchanged.
Managemen on April 28, 2020
No paper materials are provided.
t Co., Ltd.
103
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
20 On the premise of avoiding
Please refer to the
Telep institutions selective disclosure, public
Hengyi
hone including information such as industry
Petrochemical's
May 6, Com com Institut CICC, status, company business
Investor Relations
2020 pany muni ion CITIC development and future
Activity Record Form
catio Capital and development plans are
on irm.cninfo.com.cn
n Merchant communicated and exchanged.
on April 28, 2020
Fund No paper materials are provided.
29
On the premise of avoiding
institutions Please refer to the
Telep selective disclosure, public
including Hengyi
hone information such as industry
May Shenwan Petrochemical's
Com com Institut status, company business
13, Hongyuan, Investor Relations
pany muni ion development and future
2020 Wanjia Activity Record Form
catio development plans are
Fund, on irm.cninfo.com.cn
n communicated and exchanged.
Xingquan on May 13, 2020
No paper materials are provided.
Fund
16
On the premise of avoiding
institutions Please refer to the
Telep selective disclosure, public
including Hengyi
hone information such as industry
Wanjia Petrochemical's
July 9, Com com Institut status, company business
Fund, Investor Relations
2020 pany muni ion development and future
Huatai-pine Activity Record Form
catio development plans are
bridge on irm.cninfo.com.cn
n communicated and exchanged.
Fund, New on July 09, 2020
No paper materials are provided.
Hope
July Com Telep mecha 4 On the premise of avoiding Please refer to the
15, pany hone nism institutions selective disclosure, public Hengyi
104
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2020 com including information such as industry Petrochemical's
muni Founder status, company business Investor Relations
catio Securities development and future Activity Record Form
n and China development plans are on irm.cninfo.com.cn
Universal communicated and exchanged. on July 15, 2020
No paper materials are provided.
62
On the premise of avoiding Please refer to the
institutions
Telep selective disclosure, public Hengyi
including
hone information such as industry Petrochemical's
Septem CICC,
Com com Institut status, company business Investor Relations
ber 1, JPMorgan
pany muni ion development and future Activity Record Form
2020 Chase,
catio development plans are on irm.cninfo.com.cn
ICBC
n communicated and exchanged. on September 01,
Credit
No paper materials are provided. 2020
Suisse, etc.
31
institutions
including
On the premise of avoiding
East Please refer to the
selective disclosure, public
Securities Hengyi
information such as industry
Octobe Field Asset Petrochemical's
Com Institut status, company business
r 26, resea Managemen Investor Relations
pany ion development and future
2020 rch t, Gemboom Activity Record Form
development plans are
Investment on irm.cninfo.com.cn
communicated and exchanged.
Mgmt, Kuo on October 26, 2020
No paper materials are provided.
Hwa Life
Insurance,
etc.
105
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
14 On the premise of avoiding Please refer to the
institutions selective disclosure, public Hengyi
including information such as industry Petrochemical's
Novem Field
Com Institut Kaiyuan status, company business Investor Relations
ber 10, resea
pany ion Securities, development and future Activity Record Form
2020 rch
ABC-CA, development plans are on irm.cninfo.com.cn
and Kaifeng communicated and exchanged. on November 10,
Investment No paper materials are provided. 2020
9
institutions
On the premise of avoiding Please refer to the
including
selective disclosure, public Hengyi
Guangdong
information such as industry Petrochemical's
Novem Field Developme
Com Institut status, company business Investor Relations
ber 26, resea nt Fund, GF
pany ion development and future Activity Record Form
2020 rch Self-operate
development plans are on irm.cninfo.com.cn
d, Yangtze
communicated and exchanged. on November 26,
River Asset
No paper materials are provided. 2020
Managemen
t, etc.
On the premise of avoiding Please refer to the
selective disclosure, public Hengyi
1 institution information such as industry Petrochemical's
Decem Field
Com Institut including status, company business Investor Relations
ber 10, resea
pany ion Essence development and future Activity Record Form
2020 rch
Securities development plans are on irm.cninfo.com.cn
communicated and exchanged. on December 10,
No paper materials are provided. 2020
Decem Com Telep Institut 29 On the premise of avoiding Please refer to the
106
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
ber 23, pany hone ion institutions selective disclosure, public Hengyi
2020 com including information such as industry Petrochemical's
muni China Post status, company business Investor Relations
catio Fund, Bank development and future Activity Record Form
n of development plans are on irm.cninfo.com.cn
Communica communicated and exchanged. on December 23,
tions No paper materials are provided. 2020
Schroder,
Ivy League
Number of receptions 18
Number of reception institutions 377
Number of individuals received 0
Number of other objects received 0
Whether to divulge, disclose or reveal
No
undisclosed material information
107
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section V Important Matters
I. The Company’s common stock profit distribution and capitalization of capital reserves
During the reporting period, the common stock profit distribution policy, especially the
formulation, implementation or adjustment of the cash dividend policy
According to the China Securities Regulatory Commission's "Notice on Further Implementing
Issues Related to Cash Dividends of Listed Companies" (ZJF [2012] No. 37), Guangxi Securities
Regulatory Bureau "Notice on Strengthening the Awareness of Returning Shareholders and
Improving Dividend Mechanism" (GZJF [2012] 23) and "Guidelines for the Supervision of Listed
Companies No. 3-Cash Dividends of Listed Companies" Securities Regulatory Commission
Announcement [201309] No. 43 and other documents, combined with the actual situation of the
Company, specific provisions has been made for the profit distribution decision-making procedures
and profit distribution policy in the "Articles of Association". In addition, it has formulated the
"Shareholder Dividend Return Plan for the Next Three Years (2019-2021)" to better guarantee the
reasonable return of all shareholders, further refine the provisions of the profit distribution policy in
"Articles of Association", and increase the transparency and operability in dividend distribution
decision, establish a continuous, stable and scientific return plan and mechanism for investors to
ensure the continuity and stability of the profit distribution policy. During the reporting period, the
Company shall strictly implement the above profit distribution policy.
According to the 2019 profit distribution plan approved by the Company’s 2019 shareholders
meeting held on May 19, 2020: Based on the Company’s existing total share capital of
2,841,725,474 shares, a cash dividend of RMB 4.00 (including tax) will be distributed to all
shareholders for every 10 shares. No bonus shares will be given, and 3 shares will be added for
every 10 shares. The Company published the "Announcement on the Implementation of Hengyi
Petrochemical Co., Ltd.'s Annual Equity Distribution in 2019", and the implementation was
completed on May 28, 2020.
Special description of cash dividend policy
Whether it meets the requirements of the Company's Articles of Association or the resolutions of the Yes
108
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
general meeting of shareholders :
Whether the dividend standard and proportion are clear and definite: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether independent directors have performed their due diligence and played their due role: Yes
Whether small and medium shareholders have sufficient opportunities to express their opinions and
Yes
demands, and whether their legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant
N/A
and transparent:
The Company’s common stock dividend distribution plan (preliminary programe) and the
capital reserve conversion plan (preliminary programe) for the past 3 years (including this
reporting period)
1. The Company's 2018 profit distribution plan: Based on the Company's total share capital of
2,841,725,474 shares as of April 17, 2019, a cash dividend of RMB 3 (tax included) for every 10
shares, no bonus shares, and no capital reserve is converted as share capital.
2. The Company's 2019 profit distribution plan: Based on the Company's total share capital of
2,841,725,474 shares as of December 31, 2019, a cash dividend of RMB 4 (tax included) for every
10 shares, no bonus shares, and capitalization of capital reserves is conducted. 3 shares are
transferred to all shareholders for every 10 shares.
3. The Company's 2020 profit distribution plan: Based on the Company's total share capital of
3,681,645,407 shares as of December 31, 2020, a cash dividend of RMB 3 (tax included) for every
10 shares, no bonus shares, and no capital reserve is converted as share capital.
The Company's cash dividends of common shares in the past three years (including this
reporting period)
Currency Unit: RMB
Net profit The ratio of the amount of Total cash The ratio of total cash
Cash dividend attributable to cash dividends to the net dividends dividends (including
Dividend
amount (tax common profit attributable to (including other methods) to the net
year
included) shareholders of common shareholders of other profit attributable to
listed companies in the listed company in the methods) common shareholders of
109
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
the annual consolidated statement listed companies in the
consolidated consolidated statement
statement of
dividends
2020 1,104,493,622.10 3,071,998,839.75 35.95% 0.00 0.00%
2019 1,136,690,189.60 3,190,185,517.79 35.63% 0.00 0.00%
2018 852,517,642.20 1,872,494,729.34 45.53% 0.00 0.00%
The Company was profitable during the reporting period and the parent company’s profit
available for distribution to ordinary shareholders was positive, but no distribution plan for
cash dividend for ordinary shares was proposed
□ Applicable √ Not applicable
II. Profit distribution and capitalization of capital reserve during the reporting period
Number of bonus shares for every 10 shares (shares) 0
Distributing dividends per 10 shares (yuan) (tax included) 3
The equity base of the distribution plan (shares) 3,681,645,407
Cash dividend amount (yuan) (tax included) 1,104,493,622.10
Cash dividend amount in other ways (such as share repurchase) (yuan) 0.00
Total cash dividends (including other methods) (yuan) 1,104,493,622.10
Distributable profit (yuan) 1,127,876,313.43
The ratio of total cash dividends (including other methods) to total profit
100%
distribution
This cash dividend situation
If the Company's development stage is in the growth period and has major capital expenditure
arrangements, when the profit distribution is carried out, the proportion of cash dividends in this
profit distribution should be at least 20%
Detailed explanation of the profit distribution or capital reserve transfer plan
Based on attaching importance to reasonable investment returns to investors and taking into
account the Company’s sustainable development principles, the Company intends to distribute 0
110
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
bonus shares (including tax) to all shareholders for every 10 shares on the basis of company’s
existing total share capital of 3,681,645,407 shares. The cash dividend of RMB 3.00 (tax included)
shall be distributed for every 10 shares, and the total distributed profit is RMB 1,104,493,622.10.
No bonus shares and no public reserve fund is converted as share capital. If the additional
issuance, repurchase, or conversion of convertible bonds into share capital occurs to the Company
before the dividend distribution equity registration date, resulting in a change in the total equity on
the dividend distribution equity registration date, the Company will adjust the corresponding total
equity. The remaining undistributed profits will be carried forward for distribution in subsequent
years (this plan still needs to be approved by the Company's 2020 annual shareholders meeting).
111
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
III. Fulfillment of commitments
1. Commitments that the Company’s actual controllers, shareholders, related parties, acquirers, and the Company and other relevant
parties have fulfilled during the reporting period and that have not been fulfilled as of the end of the reporting period
Comm
Promising Commitment Commitm Commitm
itment Commitment content Performance
party type ent time ent period
reason
Commitment It ensures the independence of Hengyi Group and its actual controller's
on independent affiliates and the Company in terms of personnel, assets, finance,
Qiu operation organization and business in the commitment.
Up to now,
Jianlin, Commitment
Hengyi Group
the actual on horizontal Promise not to compete with the Company in the same industry.
Comm and the actual
controller competition April 29, long term
itments controller Qiu
of Hengyi Commitment 2010 effective
made Jianlin have not
Group and on connected Commit to regulate related transactions with the Company.
in the violated this
the transaction
acquisi commitment.
Company Commitment
tion
on the use of Promise not to occupy company funds.
report
funds
or
It is promised that the equity adjustment of Zhejiang Yisheng and The undertaking
equity
Yisheng Investment will not increase the actual or potential tax burden remains valid and
change
Hengyi of Hengyi Petrochemical or related subsidiaries. On the premise of the is still in the
report
Group and Other completion of this major asset reorganization, if Hengyi Petrochemical April 29, long term process of
other commitments or its subsidiaries are required to pay taxes or be demanded by tax 2010 effective fulfillment. Up to
parties authorities for the above-mentioned equity adjustment due to the now, Hengyi
adjustment of national tax policy or other reasons, the reorganization Group has not
party promised to compensate the Company for any losses incurred by it violated this
112
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Comm
Promising Commitment Commitm Commitm
itment Commitment content Performance
party type ent time ent period
reason
in cash and full amount timely. undertaking.
Fulida
Group; The commitment
Xinghui Hengyi Group, Fulida Group, and Xinghui Chemical Fiber do not place remains valid and
Other December December
Chemical any form of encumbrances and rights on the new shares acquired by this is still in the
commitments 28, 2018 28, 2021
Fiber; reorganization that are still within the lock-up period. process of
Hengyi fulfillment.
Group
(1) All new shares will be locked up from the registration date of the
Comm newly added shares. After 12 months since the registration date of the
itment newly added shares and the number of shares to be compensated in the
made first year of the profit compensation period agreed in the "Profit Forecast
during Compensation Agreement" is determined (subject to the later date of
asset fulfillment), the remaining part of 33.33% of the new shares after
reorga Fulida deducting the number of shares to be compensated for fulfilling the The commitment
nizatio Group; Share profit compensation obligation according to the "Profit Forecast remains valid and
December December
n Xinghui restriction Compensation Agreement" can be lifted from the sales restriction;(2) is still in the
28, 2018 28, 2021
Chemical commitment After 24 months since the expiration of the new share registration date process of
Fiber and after the number of shares to be compensated in the second year of fulfillment.
the profit compensation period agreed under the "Profit Forecast
Compensation Agreement" is determined (subject to the later date of
satisfaction),the remaining part of the newly added share 33.33% after
deducting the number of shares to be compensated for fulfilling the
profit compensation obligation according to the "Profit Forecast
Compensation Agreement" can be lifted from the sales restriction;(3)
113
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Comm
Promising Commitment Commitm Commitm
itment Commitment content Performance
party type ent time ent period
reason
After 36 months since the expiration of the new share registration date
and the number of shares to be compensated in the third year of the
profit compensation period agreed under the "Profit Forecast
Compensation Agreement" (including the number of shares to be
compensated after the impairment test) is determined, the remaining part
of the new shares after deducting the number of shares that should be
compensated for the performance of the profit compensation obligation
(including the profit compensation obligation based on the impairment
test) according to the "Profit Forecast Compensation Agreement" can be
lifted from the sales restriction.
Within 36 months since the date of listing of the newly-added shares and
before the completion of the compensation obligations stipulated in the The commitment
Share "Profit Forecast Compensation Agreement" signed between the remains valid and
Hengyi December December
restriction Company and the listed company for the purchase of assets by the is still in the
Group 28, 2018 28, 2021
commitment issuance of shares (whichever evening shall prevail), no shares of the process of
listed company acquired through this asset purchase transaction can be fulfillment.
transferred.
Other Hainan It promises that it will not compete in the same industry with the Up to now,
commi Hengshen production and sales of polyester fiber products, which is one of the Hainan
tments gyuan main businesses of listed companies. Supplementary commitment: Hengshengyuan
Commitment
made Internatio Shanghai Hengyi Polyester Fiber Co., Ltd. will permanently shut down March 21, long term International
on horizontal
to the nal its existing production facilities, no longer participate in or add any areas 2016 effective Tourism
competition
Compa Tourism that may compete with the Company's industry in the same industry Development Co.,
ny's Developm since the 100% equity transfer transaction of Shanghai Hengyi Polyester Ltd. has not
small ent Co., Fiber Co., Ltd. is approved at the Company’s 2016 fourth extraordinary violated this
114
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Comm
Promising Commitment Commitm Commitm
itment Commitment content Performance
party type ent time ent period
reason
and Ltd. general meeting of shareholders, Meanwhile, Shanghai Hengyi Polyester commitment.
mediu Fiber Co., Ltd. split and disposes of its existing assets to completely
m solve this potential horizontal competition problem.
shareh
olders
Whether the promise is fulfilled on time Yes
If the commitment is not fulfilled within the time limit, the specific reasons for the unfulfilled commitment and the
N/A
next work plan shall be explained in detail
115
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2. There is a profit forecast for the Company’s assets or projects, and it is still in the profit
forecast period at the reporting period, the Company provides an explanation of the reason
for the assets or projects reaching the original profit forecast
Actual
Current
Name of asset Start Finish performance Reasons for not Original
forecast
or project time time for the meeting the forecast Original forecast
performance
whose profit is for for period forecast (if disclosure disclosure index
(RMB ten
forecast forecast forecast (RMB ten applicable) date
thousand)
thousand)
Product "Report on Issuing
demand has Shares to Purchase
Jiaxing Yipeng, fallen and November Assets and Raising
2018 2020 26,000 20,840.37
Taicang Yifeng spreads have 28, 2018 Supporting Funds and
narrowed due Related Party
to the epidemic Transactions"
"Report on Issuing
Shares to Purchase
Shuangtu New November Assets and Raising
2018 2020 24,000 26,595.66 N/A
Material 28, 2018 Supporting Funds and
Related Party
Transactions"
Commitments made by the Company’s shareholders and counterparties in the reporting
year’s operating performance
Zhejiang Hengyi Group Co., Ltd. promised that Jiaxing Yipeng Chemical Fiber Co., Ltd. and
Taicang Yifeng Chemical Fiber Co., Ltd. will realize a net profit of no less than RMB 260 million in
2020.
Fulida Group Holding Co., Ltd. and Xinghui Chemical Fiber Group Co., Ltd. promised that
Zhejiang Shuangtu New Material Co., Ltd. will realize a net profit of no less than RMB 240 million
116
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
in 2020.
The completion of performance commitments and its impact on the impairment test of
goodwill
Continental CPA (special general partnership) hired by the Company audited the 2020
financial statements of Jiaxing Yipeng and Taicang Yifeng, and issued a standard unqualified audit
report. After auditing, Jiaxing Yipeng and Taicang Yifeng realized net profit of RMB 208,403,700
attributable to owners of the parent company after deducting non-recurring gains and losses in 2020.
Compared with the counterparty’s performance commitment of RMB 260 million, the cumulative
completion rate was 80.16%. Jiaxing Yipeng and Taicang Yifeng have not fulfilled their
performance commitments for 2020.
Continental CPA (special general partnership) hired by the Company audited the 2020
financial statements of Shuangtu New Material and issued a standard unqualified audit report. After
auditing, Shuangtu New Material realized net profit of RMB 265,956,600 attributable to owners of
the parent company after deducting non-recurring gains and losses in 2020. Compared with the
counterparty’s performance commitment of 240 million yuan, the cumulative completion rate was
110.82%. Shuangtu New Material's 2020 performance commitment has been fulfilled. Shuangtu
New Material has completed its performance commitment and there is no risk of impairment of
goodwill.
IV. The non-operating capital occupation of the listed company by the controlling shareholder
and its related parties
During the reporting period of the Company, there was no non-operating capital occupation of
the listed company by the controlling shareholder and its related parties.
V. Explanations of the board of directors, the board of supervisors, and independent directors
(if any) on the “non-standard audit report” of the accounting firm during the reporting
period
□ Applicable √ Not applicable
117
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
VI. Compared with the financial report of the previous year, the explanation of the changes in
accounting policies, accounting estimates and accounting methods
(1) Changes in accounting policies
The Ministry of Finance issued the "Accounting Standards for Business Enterprises No.
14-Revenue (2017 Revision)" (CK [2017] No. 22) (hereinafter referred to as the "New Revenue
Criteria") on July 5, 2017. As approved by the 37th meeting of the tenth board of directors of the
Company on March 5, 2020, the Company will begin to implement the aforementioned new
revenue criteria on January 1, 2020.
The new revenue criteria establishes a new revenue recognition model for regulating revenue
generated from contracts with customers. In order to implement the new revenue criteria, the
Company reassessed the recognition and measurement, accounting and presentation of main
contract revenue.
After the implementation of the new revenue criteria, the Company will change the contractual
consideration received from customers in advance for the transfer of goods from the item of
“accounts received in advance” to the items of “contractual liabilities” and “other current liabilities”;
the Company will change the transportation cost incurred by the transfer of goods from the "sales
expense" item to the "operating cost" item.
Impact on the financial statements on January 1, 2020:
December 31, 2019 (before change) January 1, 2020 (after change)
Report item
Consolidated Statement The Company Consolidated Statement The Company
Deposit received 596,087,260.62
Contract liabilities 527,511,147.25
Other current liabilities 68,576,113.37
(2) Changes in accounting estimates
The Company has no changes in accounting estimates during the reporting period.
118
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
VII. Explanation of the situation of retrospective restatement in the correction of major
accounting errors during the reporting period
During the reporting period, the Company had no major accounting error corrections requiring
retrospective restatement.
VIII. Compared with the financial report of the previous year, the explanation of the changes
in the scope of the consolidated statement
In 2020, there were 44 subsidiaries included in the company’s consolidation scope. For details,
please refer to Note VIII “Interests in Other Equities”. The scope of consolidation of the Company
this year increased by 11 households and decreased by one household compared with the previous
year. Please refer to Note VII "Changes in Consolidation Scope" for details.
IX. Appointment and dismissal of accounting firms
Currently employed accounting firm
Zhongxinghua Certified
Name of domestic accounting firm
Public Accountants LLP
Remuneration of domestic accounting firms (ten thousand yuan) 320
Consecutive years of audit services of domestic accounting firms 2
Liu Hongyue, Wang
Name of CPA in domestic accounting firms
Guohai
Consecutive years of CPA audit services of domestic accounting firms 2
Name of overseas accounting firms (if any) None
Remuneration of overseas accounting firms (RMB ten thousand) (if any) 0
Consecutive years of audit services of overseas accounting firms (if any) None
The name of the certified public accountant of the overseas accounting
None
firms (if any)
Consecutive years of CPA audit services of overseas accounting firms (if
None
any)
119
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Whether to reappoint an accounting firm in the current period
□Yes √No
Employment of internal control auditing accounting firms, financial consultants or sponsors
During the reporting period, the Company hired Continental CPA (special general partnership)
as the internal control audit agency, with an internal control audit fee of RMB 600,000, and RMB
550,000 was paid to them during the reporting period.
During the reporting period, due to the public issuance of convertible corporate bonds, the
Company hired CITIC Securities Co., Ltd. as the sponsor and lead underwriter, and paid RMB 11
million during the reporting period.
X. Delisting after the disclosure of the annual report
□ Applicable √ Not applicable
XI. Matters related to bankruptcy and reorganization
During the reporting period, the Company did not have any bankruptcy and reorganization
related matters.
XII. Major litigation and arbitration matters
The Company had no major litigation or arbitration matters during the reporting period.
XIII. Penalties and rectifications
There were no penalties and rectifications during the reporting period of the Company.
XIV. The integrity of the Company and its controlling shareholders and actual controllers
During the reporting period, the Company, its controlling shareholder, and actual controller did
not fail to implement the court’s effective judgments, and no large amounts of debts were not paid
when they were due.
120
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
XV. Implementation of the Company’s equity incentive plan, employee stock ownership plan
or other employee incentive measures
1. Progress of the Company's second phase of employee stock ownership plan
No. Date Title of Announcement Contents
"Announcement on the completion of the second http://www.cninfo.com.cn/new/disclosure/
phase of the Company's employee stock detail?plate=szse&orgId=gssz0000703&st
1 July 4, 2020 ownership plan and the completion of the stock ockCode=000703&announcementId=1208
sale and expiration" (Announcement No.: 001890&announcementTime=2020-07-04
2020-074)
2. Progress of the Company's second phase of restricted stock incentive plan
No. Date Title of Announcement Contents
"Announcement on the Achievements of http://www.cninfo.com.cn/new/disclosure/
Unlocking Conditions in the Third Unlocking detail?plate=szse&orgId=gssz0000703&st
1 June 13, 2020
Period of the Second Phase Restricted Stock ockCode=000703&announcementId=1207
Incentive Plan" (Announcement No.: 2020-070) 938780&announcementTime=2020-06-19
"Indicative Announcement on the Lifting of http://www.cninfo.com.cn/new/disclosure/
Restricted Stocks in the Third Unlocking Period detail?plate=szse&orgId=gssz0000703&st
2 June 13, 2020
of the Second Phase Restricted Stock Incentive ockCode=000703&announcementId=1207
Plan" (Announcement No.: 2020-068) 922974&announcementTime=2020-06-13
121
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
XVI. Major related transactions
1、 Related transactions related to daily operations
Pricing Amount of Whether Available
Contents Proportion Approved Settlement
principle related it market
of Related s in the trading method of
Type of connected for transaction exceeds prices for
Related party Related party relations connected transacti similar limit related
transaction related-par (ten the similar
transactio on price transactio (RMB transactio
ty thousand approve transaction
ns ns (%) 10,000) n
transaction yuan) d quota s
Market Market Market
Associated enterprises Goods procurement PTA 321,334.12 13.22 425,000 No Bills/cash
price price price
Yisheng Dahua
Market Market Market
Associated enterprises Selling goods PIA 2,339.91 8.62 1,700 Yes Bills/cash
price price price
Market Market Market
Associated enterprises Goods procurement PTA 36,453.03 1.50 60,000 No Bills/cash
price price price
Market Market Market
Associated enterprises Selling goods PX 163,511.48 80.22 290,000 No Bills/cash
Hainan Yi price price price
Sheng Market Market Market
Associated enterprises Selling goods PIA 5,430.91 20.00 5,000 Yes Bills/cash
price price price
Providing labor Cargo Market Market Market
Associated enterprises 1,542.06 4.05 6,600 No Bills/cash
services freight price price price
Market Market Market
Joint ventures Goods procurement Steam 8,870.08 100.00 9,000 No Bills/cash
price price price
Hengyi
Electric Market Market Market
caprolactam Joint ventures Goods procurement 31,157.77 100.00 35,000 No Bills/cash
power price price price
Energy Market Market Market
Joint ventures Selling goods 53,271.91 98.39 61,000 No Bills/cash
products price price price
122
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Market Market Market
Joint ventures Selling goods Benzene 16,314.66 81.66 13,000 Yes Bills/cash
price price price
Providing labor Cargo Market Market Market
Joint ventures 1,211.16 3.18 2,000 No Bills/cash
services freight price price price
Engineeri
Providing labor ng Market Market Market
Joint ventures 1,991.34 5.22 2,600 No Bills/cash
services managem price price price
ent
A holding subsidiary of
Market Market Market
the ultimate parent Selling goods PTA 129.53 0.01 300 No Bills/cash
price price price
company
A holding subsidiary of
Providing labor Cargo Market Market Market
Hengyi the ultimate parent 678.28 1.78 900 No Bills/cash
services freight price price price
Polyamide company
Engineeri
A holding subsidiary of
Providing labor ng Market Market Market
the ultimate parent 79.62 0.21 100 No Bills/cash
services managem price price price
company
ent
A holding subsidiary of
Polyester Market Market Market
the ultimate parent Goods procurement 298,676.25 99.73 480,000 No Bills/cash
products price price price
company
A holding subsidiary of
Shaoxing Packing Market Market Market
the ultimate parent Goods procurement 3,416.28 3.74 9,700 No Bills/cash
Hengming materials price price price
company
A holding subsidiary of
Polyester Market Market Market
the ultimate parent Selling goods 100.01 0.00 5,100 No Bills/cash
products price price price
company
A holding subsidiary of Selling goods Auxiliary Market Market 1,455.77 73.42 2,000 No Bills/cash Market
123
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
the ultimate parent materials price price price
company
A holding subsidiary of
Energy Market Market Market
the ultimate parent Selling goods 4,209.56 7.77 5,300 No Bills/cash
products price price price
company
A holding subsidiary of
Providing labor Cargo Market Market Market
the ultimate parent 2,440.24 6.40 6,000 No Bills/cash
services freight price price price
company
Engineeri
A holding subsidiary of
Providing labor ng Market Market Market
the ultimate parent 1,293.27 3.39 600 Yes Bills/cash
services managem price price price
company
ent
A holding subsidiary of
Polyamide Market Market Market
the ultimate parent Goods procurement 797.39 0.27 25,000 No Bills/cash
chips price price price
company
A holding subsidiary of
Market Market Market
the ultimate parent Selling goods PTA 257.26 0.01 350 No Bills/cash
price price price
Hangzhou company
Yichen A holding subsidiary of
Providing labor Cargo Market Market Market
the ultimate parent 2,357.93 6.19 3,500 No Bills/cash
services freight price price price
company
Engineeri
A holding subsidiary of
Providing labor ng Market Market Market
the ultimate parent 178.3 0.47 200 No Bills/cash
services managem price price price
company
ent
Total -- -- 959,498.12 -- 1,449,950 -- -- --
Disclosure date January 17, 2020
Disclosure Index www.cninfo.com.cn;：Announcement on the Estimated Amount of Daily Related Party Transactions in
124
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2020 (Announcement No.: 2020-005)
Details of returns of large sales None
The above-mentioned related transactions are conducive to utilization of the superior resources of the
The actual performance during the reporting period (if any) is estimated by Company and important related parties, ensuring the stable supply of important raw materials and the
category for the total amount of daily related transactions that will occur in the stable and continuous supply of electricity and other auxiliary materials, broadening the Company's
current period downstream product sales channels, and realizing the Company's attempts to operate upstream products. It
is conducive to consolidating and enhancing the advantages of industrial chain integration.
The related transactions between the Company and the above-mentioned related parties are closely related
to the Company’s daily operations. Related party transactions are based on market prices or prices
determined by regulatory authorities, and follow the principles of fairness, justice, and openness, and will
Reasons for the large difference between the transaction price and the market
not harm the interests of the Company and small and medium shareholders. The main business will not
reference price (if applicable)
form a significant dependence on related parties due to the above-mentioned related transactions, nor
affect the Company's independence, and will have a positive impact on the Company's current and future
financial status and operating results.
125
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2. Related party transactions arising from the acquisition or sale of assets or equity
During the reporting period, there were no related transactions involving the acquisition or sale
of assets or equity.
3. Related-party transactions for joint foreign investment
The
Registered Net assets of Net profit of
name Total assets of
capital of the the invested the invested
Co-in of the The main business the invested
Related party invested company company
vesto investe of the invested company (ten
relations company (ten (ten (ten
r d company thousand
thousand thousand thousand
compa yuan)
yuan) yuan) yuan)
ny
Production and
The vice chairman
sales of chemical
Yishe of the Company, Mr.
Hainan products such as
ng Fang Xianshui, also
Yi purified 358,000 1,021,744.86 397,725.04 98,267.26
Inves serves as the
Sheng terephthalic acid
tment chairman of Hainan
and polyester
Yisheng
bottle flakes
Ning
bo
The vice chairman
Zhon Chemical raw
of the Company, Mr. Yishen
gjin materials and
Fang Xianshui, also g New
Petro chemical products 200,000 622,519.61 185,267.46 5,153.77
serves as the director Materia
chem manufacturing
of Yisheng New l
ical industry
Material
Co.,
Ltd.
126
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The progress of major projects under construction of the invested
None
company (if any)
4. Related credit and debt transactions
During the reporting period, the Company did not have associated credit and debt transactions.
5. Other major related transactions
During the reporting period, the Company acquired 30% equity of Dongzhan Shipping Co.,
Ltd. held by the Company's controlling shareholder Hengyi Group in cash. The project has been
reviewed by the Company's board of directors, board of supervisors and shareholders meeting, and
the transaction has now been completed.
During the reporting period, the Company acquired 100% equity of Guangxi Hengyi New
Material held by the Company's controlling shareholder Hengyi Group in cash. The project has
been reviewed by the Company's board of directors, board of supervisors and shareholders meeting,
and the transaction has now been completed.
Related inquiries of major related party transaction interim report disclosure website
Temporary Name of Temporary
Name of temporary announcement announcement announcement disclosure
disclosure date website
"Announcement on the Company's Cash
Purchase of 30% Equity of Dongzhan January 17, 2020 Http://www.cninfo.com.cn/
Shipping Co., Ltd. and Related Transactions"
"Announcement on the Company's Cash
Purchase of 100% Equity of Guangxi Hengyi July 10, 2020 Http://www.cninfo.com.cn/
New Material and Related Transactions"
127
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
XVII. Major contracts and their performance
1. Custody, contracting and leasing matters
(1) Custody situation
There was no custody in the Company during the reporting period.
(2) Contracting situation
There was no contracting situation during the reporting period of the Company.
(3) Lease situation
During the reporting period, there was no leasing situation.
128
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2. Major guarantee
(1) Guarantee
Currency Unit: RMB 10,000
The Company and its subsidiaries’ external guarantees (excluding guarantees to subsidiaries)
Whether Whether it
Name of Disclosure date of
Guarantee Actual guarantee Type of it has is a related
guaranteed guarantee quota related Actual date Guarantee period
limit amount guarantee been party
object announcement
fulfilled guarantee
Yisheng New General From 2020-4-14 to
April 28, 2020 30,000 April 28, 2020 30,000 No Yes
Material guarantee 2025-10-15
Total amount of external guarantee The total amount of external
approved during the reporting period 30,000 guarantees actually occurred 30,000
(A1) during the reporting period (A2)
The total amount of external Total balance of actual external
guarantees approved at the end of the 30,000 guarantees at the end of the 30,000
reporting period (A3) reporting period (A4)
The Company's guarantees for subsidiaries
Whether Whether it
Name of Disclosure date of
Guarantee Actual guarantee Type of it has is a related
guaranteed guarantee quota related Actual date Guarantee period
limit amount guarantee been party
object announcement
fulfilled guarantee
General From 2019-1-4 to
January 22, 2018 10,000 January 04, 2019 10,000 Yes Yes
guarantee 2020-1-3
Hengyi
General From 2019-3-11 to
Limited January 23, 2019 34,400 March 11, 2019 34,400 Yes Yes
guarantee 2020-7-24
January 16, 2020 9,228.14 May 27, 2020 9,228.14 General From 2020-5-27 to Yes Yes
129
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee 2020-12-21
General From 2020-1-8 to
January 23, 2019 5,000 January 08, 2020 5,000 No Yes
guarantee 2021-1-7
General From 2020-4-16 to
January 16, 2020 63,477.99 April 16, 2020 63,477.99 No Yes
guarantee 2021-12-4
General From 2020-02-26 to
January 16, 2020 133,325 February 26, 2020 133,325 No Yes
guarantee 2021-11-20
General From 2020-5-31 to
January 16, 2020 21,111.45 May 31, 2020 21,111.45 No Yes
guarantee 2023-5-31
General From 2020-7-24 to
January 16, 2020 13,830.84 July 24, 2020 13,830.84 No Yes
guarantee 2023-7-24
General From 2019-1-16 to
January 22, 2018 5,000 January 16, 2019 5,000 Yes Yes
guarantee 2020-1-14
General From 2019-3-11 to
January 23, 2019 70,626.76 March 11, 2019 70,626.76 Yes Yes
guarantee 2020-12-12
General From 2020-1-7 to
January 23, 2019 10,000.00 January 07, 2020 10,000.00 Yes Yes
guarantee 2021-1-6
Hengyi General From 2020-1-8 to
January 23, 2019 5,000 January 08, 2020 5,000 No Yes
Hi-tech guarantee 2021-1-7
General From 2020-4-9 to
January 16, 2020 52,957.38 April 09, 2020 52,957.38 No Yes
guarantee 2023-5-25
General From 2020-3-20 to
January 16, 2020 130,979.95 March 20, 2020 130,979.95 No Yes
guarantee 2021-12-2
General From 2019-12-6 to
January 23, 2019 8,616.67 December 06, 2019 8,616.67 No Yes
guarantee 2021-10-10
General From 2020-1-4 to
Hengyi January 23, 2019 6,400 January 14, 2020 3,840 No Yes
guarantee 2021-1-10
Polymer
January 16, 2020 31,900 June 24, 2020 19,140 General From 2020-6-24 to No Yes
130
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee 2021-12-4
General From 2020-6-12 to
January 16, 2020 51,548.5 June 12, 2020 30,929.1 No Yes
guarantee 2021-6-12
General From 2019-1-7 to
January 22, 2018 7,200 January 07, 2019 4,320 Yes Yes
guarantee 2020-1-9
General
January 23, 2019 21,700 August 23, 2019 13,020 2019-8-23 to 2020-12-6 Yes Yes
guarantee
General
January 23, 2019 5,000 January 08, 2020 3,000 2020-1-8 to 2021-1-7 Yes Yes
guarantee
General
January 23, 2019 29,000 March 01, 2019 20,300 2019-3-1 to 2020-7-5 Yes Yes
guarantee
Zhejiang General
January 16, 2020 29,325.37 February 03, 2020 20,527.76 2020-2-3 to 2021-4-9 Yes Yes
Yisheng guarantee
General
January 16, 2020 48,027.36 April 09, 2020 33,619.15 2020-4-9 to 2022-5-3 No Yes
guarantee
General
January 23, 2019 12,700 November 25, 2019 12,700 2019-11-25 to 2020-5-22 Yes Yes
guarantee
Ningbo
General
Hengyi January 16, 2020 12,700 May 26, 2020 12,700 2020-5-26 to 2020-11-20 Yes Yes
guarantee
Industry
General
January 16, 2020 12,500 November 24, 2020 12,500 2020-11-24 to 2021-5-21 No Yes
guarantee
General
January 23, 2019 2,000 July 24, 2019 2,000 2019-7-24 to 2020-1-10 Yes Yes
guarantee
General
Taicang Yifeng January 16, 2020 2,000 February 21, 2020 2,000 2020-2-21 to 2021-1-21 No Yes
guarantee
General
January 16, 2020 5,000 August 13, 2020 5,000 2020-8-13 to 2021-2-10 No Yes
guarantee
Suqian Yida January 16, 2020 12,000 June 17, 2020 12,000 General 2020-6-17 to 2021-9-2 No Yes
131
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee
General 2020-11-23 to
January 16, 2020 10,000.1 November 23, 2020 10,000.1 No Yes
guarantee 2021-11-19
General
January 23, 2019 18,900 April 16, 2019 18,900 2019-4-16 to 2024-4-10 Yes Yes
guarantee
General
January 16, 2020 5,000 January 17, 2020 5,000 2020-1-17 to 2020-9-3 Yes Yes
guarantee
General 2019-12-11 to
January 23, 2019 10,000 December 11, 2019 10,000 Yes Yes
guarantee 2020-10-18
General
Jiaxing Yipeng January 16, 2020 1,000 August 26, 2020 1,000 2020-8-26 to 2021-5-19 No Yes
guarantee
General
January 16, 2020 14,996 September 08, 2020 14,996 2020-9-8 to 2021-5-18 No Yes
guarantee
General
January 16, 2020 21,600 March 10, 2020 21,600 2020-3-10 to 2021-5-14 No Yes
guarantee
Shuangtu New General
January 16, 2020 49,740 January 20, 2020 49,740 2020-1-20 to 2021-12-29 No Yes
Material guarantee
General
January 23, 2019 13,320 May 10, 2019 13,320 2019/5/10 to 2022/8/10 No Yes
guarantee
General
January 16, 2020 20,000 March 20, 2020 20,000 2020-3-20 to 2021-3-20 No Yes
Hangzhou guarantee
Yijing General
January 16, 2020 30,000 July 22, 2020 30,000 2020-10-20 to 2021-3-4 No Yes
guarantee
General
January 16, 2020 16,274.15 October 09, 2020 16,274.15 2020-10-9 to 2021-3-31 No Yes
Hong Kong guarantee
Tianyi General
January 16, 2020 38,434.65 March 13, 2020 38,434.65 2020-3-13 to 2020-12-28 Yes Yes
guarantee
Haining January 16, 2020 50,000 April 24, 2020 50,000 General 2020-4-24 to 2029-12-10 No Yes
132
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Thermoelectri guarantee
c
General 2020-11-12 to
January 16, 2020 13,200 November 12, 2020 13,200 No Yes
Haining New guarantee 2021-11-12
Material General
January 16, 2020 6,800 November 12, 2020 6,800 2020-11-12 to 2021-5-12 No Yes
guarantee
General
January 16, 2020 48,117.14 May 26, 2020 31,276.14 2020-5-26 to 2028-5-21 No Yes
guarantee
General
Fujian Yijin January 16, 2020 2,999.5 June 29, 2020 1,949.68 2020-6-29 to 2021-6-24 No Yes
guarantee
General 2019-10-18 to
January 23, 2019 6,800 October 18, 2019 4,420 No Yes
guarantee 2022-12-20
The total amount of guarantees The total actual amount of
approved for subsidiaries during the 2,141,400 guarantees for subsidiaries during 910,437.47
reporting period (B1) the reporting period (B2)
The total amount of guarantees for The total balance of actual
subsidiaries approved at the end of the 2,141,400 guarantees for subsidiaries at the 837,903.59
reporting period (B3) end of the reporting period (B4)
Subsidiary guarantees for subsidiaries
Whether Whether it
Name of Disclosure date of
Guarantee Actual guarantee Type of it has is a related
guaranteed guarantee quota related Actual date Guarantee period
limit amount guarantee been party
object announcement
fulfilled guarantee
General 2019-11-20 to
January 23, 2019 12,539.4 December 17, 2019 8,777.58 Yes Yes
guarantee 2020-12-12
Hengyi
General
Hi-tech January 23, 2019 2,327.74 January 07, 2020 1,629.42 2020-1-7 to 2020-4-2 Yes Yes
guarantee
January 16, 2020 3,883.84 February 03, 2020 2,718.69 General 2020-2-3 to 2020-6-2 Yes Yes
133
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee
General
January 23, 2019 5,000 December 31, 2019 5,000 2019-12-31 to 2021-1-30 Yes Yes
guarantee
General
January 16, 2020 5,000 March 30, 2020 5,000 2020-3-30 to 2021-3-25 Yes Yes
guarantee
General 2020-11-19 to
January 16, 2020 9,000 November 19, 2020 6,300 No Yes
guarantee 2021-12-11
General
January 16, 2020 10,000 September 21, 2020 7,000 2020-9-21 to 2021-06-21 No Yes
guarantee
General
January 16, 2020 5,500 July 20, 2020 5,500 2020-7-20 to 2021-11-26 No Yes
guarantee
General
January 23, 2019 10,000 December 31, 2019 10,000 2019-12-31 to 2021-1-30 No Yes
guarantee
General 2020-07-17 to
January 16, 2020 27,300 July 17, 2020 27,300 No Yes
guarantee 2021-06-04
General 2019-10-31 to
January 23, 2019 7,354.1 October 31, 2019 5,147.87 Yes Yes
guarantee 2020-12-21
General
January 16, 2020 15,000 March 27, 2020 10,500 2020-3-27 to 2020-8-26 Yes Yes
guarantee
Hengyi General 2019-11-14 to
January 23, 2019 9,600 November 14, 2019 6,720 No Yes
Limited guarantee 2021-11-13
General
January 16, 2020 19,700.33 August 28, 2020 13,790.23 2020-8-28 to 2021-4-24 No Yes
guarantee
General
January 16, 2020 13,000.93 July 22, 2020 9,100.65 2020-7-22 to 2021-01-18 No Yes
guarantee
General
Zhejiang January 23, 2019 33,000 March 04, 2019 33,000 2019-3-4 to 2020-3-31 Yes Yes
guarantee
Yisheng
January 23, 2019 10,000 January 15, 2020 10,000 General 2020-1-15 to 2021-1-14 Yes Yes
134
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee
General
January 23, 2019 39,000 April 29, 2019 39,000 2019-4-29 to 2020-8-1 Yes Yes
guarantee
General
January 16, 2020 8,468.67 May 20, 2020 8,468.67 2020-5-20 to 2020-12-16 Yes Yes
guarantee
General
January 16, 2020 39,054.38 March 05, 2020 39,054.38 2020-3-5 to 2021-9-24 No Yes
guarantee
General
January 23, 2019 6,892.68 September 15, 2019 6,892.68 2019-9-15 to 2020-12-23 Yes Yes
guarantee
General
January 16, 2020 2,182.71 March 29, 2020 2,182.71 2020-3-29 to 2020-11-11 Yes Yes
Haining New guarantee
Material General
January 23, 2019 61,116.75 September 15, 2019 61,116.75 2019-9-15 to 2029-12-23 No Yes
guarantee
General
January 16, 2020 41,460.67 March 29, 2020 41,460.67 2020-3-29 to 2030-5-11 No Yes
guarantee
General
January 23, 2019 3,601.91 December 17, 2019 3,601.91 2019-12-17 to 2020-5-18 Yes Yes
guarantee
General
January 23, 2019 2,427.92 January 2, 2020 2,427.92 2020-1-2 to 2020-4-2 Yes Yes
Hong Kong guarantee
Tianyi General
January 16, 2020 27,788.06 March 17, 2020 27,788.06 2020-3-17 to 2020-8-18 Yes Yes
guarantee
General
January 16, 2020 16,959.51 September 11, 2020 16,959.51 2020-9-11 to 2021-6-28 No Yes
guarantee
General
January 16, 2020 80,778.72 November 06, 2020 80,778.72 2020-11-6 to 2021-3-26 No Yes
guarantee
Hengyi Brunei General
January 23, 2019 26,787.29 December 10, 2019 26,787.29 2019-12-10 to 2020-3-9 Yes Yes
guarantee
January 16, 2020 188,725.38 January 29, 2020 188,725.38 General 2020-1-29 to 2020-12-17 Yes Yes
135
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
guarantee
General
January 16, 2020 10,587.24 August 26, 2020 6,352.34 2020-8-26 to 2021-3-12 No Yes
guarantee
General 2020-12-22 to
January 16, 2020 800 December 22, 2020 480 No Yes
Hengyi guarantee 2021-06-22
polymer General
January 23, 2019 21,500 July 24, 2019 12,900 2019-7-24 to 2020-4-28 Yes Yes
guarantee
General
January 16, 2020 21,428.84 January 20, 2020 12,857.3 2020-1-20 to 2021-1-19 Yes Yes
guarantee
Shuangtu New General
January 16, 2020 7,980 July 21, 2020 7,980 2020-7-21 to 2021-1-21 No Yes
Material guarantee
The total amount of guarantees The total actual amount of
approved for subsidiaries during the 1,545,950 guarantees for subsidiaries during 534,354.66
reporting period (C1) the reporting period (C2)
The total amount of guarantees for The total balance of actual
subsidiaries approved at the end of the 1,545,950 guarantees for subsidiaries at the 339,893.26
reporting period (C3) end of the reporting period (C4)
The total amount of company guarantees (that is, the total of the first three items)
The total amount of approved The total amount of guarantees
guarantees during the reporting period 3,717,350 actually occurred during the 1,474,792.13
(A1+B1+C1) reporting period (A2+B2+C2)
The total amount of approved The total actual guarantee balance
guarantees at the end of the reporting 3,717,350 at the end of the reporting period 1,207,796.85
period (A3+B3+C3) (A4+B4+C4)
The percentage of total amount of actual guarantees in company's net assets
50.31%
(i.e. A4+B4+C4)
Of which:
The balance of guarantees provided for shareholders, actual controllers and 30,000
136
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
their related parties (D)
The balance of debt guarantee provided directly or indirectly for the guaranteed
0
object whose asset-liability ratio exceeds 70% (E)
The amount of the total guarantee exceeding 50% of the net assets (F) 0
The total amount of the above three guarantees (D+E+F) 30,000
For unexpired guarantees, the statement of the situation where guarantee
liability has occurred or may bear joint liability for repayment during the None
reporting period (if any)
Instructions for providing external guarantees in violation of prescribed
None
procedures (if any)
Description of the specific circumstances of the use of composite guarantees
Note: The Company and its subsidiaries provide the Company's holding subsidiary Hengyi Brunei with a guarantee line of US$1.75 billion
or equivalent overseas RMB for the syndicated loan. Please refer to the Company’s disclosure "Announcement on Providing Guarantees to
Holding Subsidiary Hengyi Industries Sdn Bhd" (Announcement No.: 2017-136) on the www.cninfo.com.cn on November 18, 2017 for details..
137
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
(2) Violation of external guarantees
During the reporting period, the Company had no violations of external guarantees.
3. Entrust others to manage cash assets
(1) Entrusted financing management
The Company did not have entrusted financing during the reporting period.
(2) Entrusted loans
Overview of entrusted loans during the reporting period
Currency Unit: RMB 10,000
Total amount of entrusted Sources of funds for Unexpired Amount not recovered
loans entrusted loans balance after the due date
160,000 Self-owned funds 100,000 0
138
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
The specific situation of a high-risk entrusted loans with a large single amount or low security, poor liquidity, and non-guaranteed
capital
Currency Unit: RMB 10,000
Actual Actual
The
profit and recovery of Whether it Whether
Capit amount of
Loan Loan Expected loss profits and goes there is any
Loan loan al Expiration provision Summary of matters and related query index
object interest Starting date benefit (if amount losses through entrusted
object amount sourc date for (if any)
type rate any) during the during the legal loan plan in
e impairmen
reporting reporting procedures the future
t (if any)
period period
Joint http://www.cninfo.com.cn/new/disclosure/de
Hainan Self-o
stock November December tail?plate=szse&orgId=gssz0000703&stock
Yishen 4.785% 52,000 wned 1,649.17 1,649.17 1,649.17 0 Yes Yes
compan 13, 2019 04, 2020 Code=000703&announcementId=12086085
g funds
y 29&announcementTime=2020-10-26
Yishen Joint http://www.cninfo.com.cn/new/disclosure/de
Self-o
g New venture December December tail?plate=szse&orgId=gssz0000703&stock
4.785% 8,000 wned 357.12 357.12 357.12 0 Yes Yes
Materi corporat 23, 2019 22, 2020 Code=000703&announcementId=12069335
funds
al ion 37&announcementTime=2019-09-19
Yishen Joint http://www.cninfo.com.cn/new/disclosure/de
Self-o
g New venture March 16, December tail?plate=szse&orgId=gssz0000703&stock
4.785% 100,000 wned 2,152.37 2,152.37 2,016.45 0 Yes Yes
Materi corporat 2020 22, 2021 Code=000703&announcementId=12086085
funds
al ion 28&announcementTime=2020-10-26
Total 160,000 -- -- -- 4,158.66 4,158.66 -- -- -- --
The principal of the entrusted loans is expected to be unable to be recovered or there are other situations that may cause impairment
□ Applicable √ Not applicable
139
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
4. Major contracts for daily operations
□ Applicable √ Not applicable
5. Other major contracts
There were no other major contracts during the reporting period.
XVIII. Social Responsibility
1. Fulfillment of social responsibilities
See the Social Responsibility Report for details.
The Company shall comply with the disclosure requirements of Shenzhen Stock Exchange
Industry Information Disclosure Guidelines No.18-Listed Companies Engaged in Chemical
Industry Related Business.
2. Fulfilling social responsibilities for targeted poverty alleviation
(1) Targeted poverty alleviation planning
Under the guidance of documents such as the "Notice of the State Council on Printing and
Distributing the Thirteenth Five-Year Plan for Poverty Alleviation" and the "Opinions of the China
Securities Regulatory Commission on Giving Full Play to the Capital Market to Serve the National
Poverty Alleviation Strategy", the Company actively responded to the relevant requirements for
poverty alleviation work called by the Zhejiang Provincial Party Committee and the Provincial
Government; implement coordinated arrangements and targeted poverty alleviation on poverty
alleviation cooperation carried out by Ningbo Municipal Party Committee and Municipal
Government between the east and the west, actively fulfilled the social responsibilities of listed
companies, and participated in the national targeted poverty alleviation work.
(2) Summary of annual targeted poverty alleviation
1) In 2020, according to the arrangement of the Ningbo Municipal Party Committee and
Municipal Government to carry out poverty alleviation cooperation between the east and the west,
the Company was determined to be the targeted poverty alleviation partner of Jilin Wangqing Beier
140
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Technology Co., Ltd. And signed the "Deep Processing Project of Yanbian Prefecture Agricultural
Specialty Products " with Wangqing County People's Government. The main task is to build a
constant temperature warehouse of 2,500 square meters, purchase refrigeration and product testing
equipment and other supporting facilities for packing 2,500 tons of edible fungi per year. The
construction period is from July 2019 to July 2020.
2) In order to implement the decision and deployment of the Party Central Committee and the
State Council on winning the fight against poverty, further give full play to the role of listed
companies in serving the country’s fight against poverty, and actively fulfill the social
responsibilities of listed companies, the Company donated RMB 3 million to Hongde Hope School
in Hongsipu District, Wuzhong City, Ningxia for education-related matters through Wuzhong City
Red Cross Society in response to the call of the party and the government.
(3) Effectiveness of targeted poverty alleviation
Index Measurement unit Quantity/Development
I Overall situation —— ——
Of which: 1. Funding RMB 10,000 800
II. Sub-item investment —— ——
8. Social poverty alleviation —— ——
Of which: 8.1 Amount invested in poverty
RMB 10,000 300
alleviation cooperation between the east and the west
8.2 Amount of investment in fixed-point
RMB 10,000 500
poverty alleviation work
(4) Follow-up targeted poverty alleviation plan
The Company will continue to participate in poverty alleviation activities, actively interact
with local governments for public welfare, give full play to the Company's important role as a local
enterprise, feedback the society in time, and build a harmonious development atmosphere.
On April 19, 2021, the Company held the fourth meeting of the eleventh board of directors for
deliberation and approval. It plans to continue to donate RMB 21 million to Hongde Hope School in
141
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Hongsipu District, Wuzhong City, Ningxia through the Wuzhong Red Cross for education related
matters. The specific donation arrangements are implemented in batches according to the progress
of the project.
142
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
3.Situation related to environmental protection
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental protection
department
During the reporting period, the Company strictly implements and carries out "Environmental Protection Law of the People's Republic of
China", "Air Pollution Prevention Law of the People's Republic of China", "Water Pollution Prevention Law of the People's Republic of China"
and "Environmental Prevention and Control Law of Solid Waste Pollution of the People's Republic of China" and other relevant laws and
regulations. The Company continues to attach great importance to environmental protection work, actively responds to the national "Three-Year
Action Plan for Winning the Blue Sky Defense War", and deepens continuously environmental management, controls the "three wastes”
according to high standards and strict requirements, and takes the path of sustainable development. In particular, the important subsidiaries of
key pollutant emission units announced by the environmental protection department continues to increase capital investment and actively carries
out environmental protection facilities renovation and upgrading to ensure that emissions meet the standards. The specific conditions are as
follows:
Name of Names of main Number
Distribution Total
Company pollutants and Discharge of Pollutant discharge Total Excessive
of discharge Emission concentration approved
or characteristic method discharge standards implemented emissions emissions
ports emissions
subsidiary pollutants ports
Discharge
Sewage 1,214.36 Reach the
COD after 1 44.85mg/L 100 mg/L 277.81 tons
station tons standard
Zhejiang treatment
Yisheng Discharge
Ammoniacal Sewage Reach the
after 1 0.51 mg/L 8 mg/L 2.65 tons 17.35 tons
nitrogen station standard
treatment
143
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Discharge
197.45 Reach the
SO2 after 2 Boiler island 7.99mg/m3 35 mg/m3 57.24 tons
tons standard
treatment
Discharge
859.17 Reach the
NOx after 2 Boiler island 18.46mg/m3 50 mg/m3 122.15 tons
tons standard
treatment
Discharge
426.11 Reach the
Smoke dust after 2 Boiler island 1.51mg/m3 5 mg/m3 10 tons
tons standard
treatment
Discharge Boiler/Heat
Reach the
SO2 after 2 Medium 69.18/74.02mg/m3 GB13223, GB13271 266.10 tons 600 tons
standard
treatment Furnace
Discharge Boiler/Heat
Reach the
NOx after 2 Medium 44.09/279.20mg/m3 GB13223, GB13271 509.50 tons 850 tons
standard
treatment Furnace
Discharge Boiler/Heat
Hainan Reach the
Smoke dust after 2 Medium 9.5/9.82mg/m3 GB13223, GB13271 35.40 tons 214.5 tons
Yisheng standard
treatment Furnace
Discharge
Sewage 224.59 Reach the
COD after 1 34.18mg/l GB31572 150.93 tons
station tons standard
treatment
Discharge
Ammoniacal Sewage Reach the
after 1 0.12mg/l GB31572 0.53 tons 17.35 tons
nitrogen station standard
treatment
Discharge
Reach the
Hengyi Smoke dust after 1 Power station 0.55mg/m3 DB3301/T0250-2018 4.37 tons 49.04 tons
standard
caprolactam treatment
SO2 Discharge 1 Power station 3.6mg/m3 DB3301/T0250-2018 29.25 tons 368.87 Reach the
144
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
after tons standard
treatment
Discharge
482.08 Reach the
NOx after 1 Power station 42.3mg/m3 DB3301/T0250-2018 340.6 tons
tons standard
treatment
Discharge
Mercury and its Reach the
after 1 Power station 0.000004mg/m3 DB3301/T0250-2018 / /
compounds standard
treatment
Discharge
Ringelmann Reach the
after 1 Power station <1 level DB3301/T0250-2018 / /
Blackness standard
treatment
Discharge Sewage
Reach the
PH after 1 treatment 7.93 GB31571-2015 / /
standard
treatment station
Discharge Sewage
127.51 Reach the
COD after 1 treatment 115.45mg/L GB31571-2015 104.89 tons
tons standard
treatment station
Discharge Sewage
Ammoniacal Reach the
after 1 treatment 0.42mg/L GB31571-2015 5.24 tons 6.376 tons
nitrogen standard
treatment station
Discharge Sewage
Reach the
Total phosphorus after 1 treatment 1.53mg/L DB33-887-2013 / /
standard
treatment station
Discharge
Thermal coal Reach the
Smoke dust after 3 3.76/2.38/1.04mg/m3 DB3301/T0250-2018 2.06 tons 18.55 tons
Hengyi station standard
treatment
Hi-tech
Discharge Heat medium Reach the
SO2 3 13.22/35.01/16.13mg/m3 DB3301/T0250-2018 18.5 tons 60.4 tons
after station standard
145
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
treatment
Discharge
Thermal coal 181.21 Reach the
NOx after 3 95.19/68.38/77.20mg/m3 DB3301/T0250-2018 91.92 tons
station tons standard
treatment
Discharge Sewage
Reach the
COD after 1 treatment 13.68mg/L GB31572-2015 0.699 tons 3.68 tons
standard
treatment station
Discharge Sewage
Ammoniacal Reach the
after 1 treatment 2.27mg/L GB31572-2015 0.11 tons 0.15 tons
nitrogen standard
treatment station
Discharge
Heat medium Reach the
Smoke dust after 3 8.67/1.44/9.25mg/m3 DB3301/T0250-2018 3.69 tons /
station standard
treatment
Discharge
Heat medium Reach the
SO2 after 3 16.40/22.64/9.72mg/m3 DB3301/T0250-2018 8.38 tons 29.22 tons
station standard
Hengyi treatment
polymer Discharge
Heat medium Reach the
NOx after 3 124.06/111.56/105.92mg/m3 DB3301/T0250-2018 56.24 tons 87.67 tons
station standard
treatment
Discharge
Sewage Reach the
COD after 1 28.63mg/L GB31572-2015 1.75 tons 34.5 tons
station standard
treatment
Discharge
Heat medium Reach the
Smoke dust after 1 1.16mg/m3 DB3301/T0250-2018 1.09 tons /
station standard
Hangzhou treatment
Yijing Discharge
Heat medium Reach the
SO2 after 1 13.75mg/m3 DB3301/T0250-2018 10.03 tons 33.8 tons
station standard
treatment
146
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Discharge
Heat medium Reach the
NOx after 1 68.81mg/m3 DB3301/T0250-2018 61.91 tons 101.3 tons
station standard
treatment
Discharge Sewage
Reach the
PH after 1 treatment 7.96 GB31572-2015 / /
standard
treatment station
Discharge Sewage
Reach the
COD after 1 treatment 40.83mg/L GB31572-2015 0.45 tons 44 tons
standard
treatment station
Discharge Sewage
Ammoniacal Reach the
after 1 treatment 8.28mg/L GB31572-2015 0.064 tons 3.08 tons
nitrogen standard
treatment station
Discharge
Heat medium Reach the
Smoke dust after 2 3.78/2.42mg/m3 DB3301/T0250-2018 5.528 tons 32.22 tons
station standard
treatment
Shuangtu Discharge
Heat medium Reach the
New SO2 after 2 9.99/17.2mg/m3 DB3301/T0250-2018 24.241 tons 111 tons
station standard
Material treatment
Discharge
Heat medium Reach the
NOx after 2 87.1/77.81mg/m3 DB3301/T0250-2018 147.023 tons 168 tons
station standard
treatment
147
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Construction and operation of pollution prevention facilities
The prevention and control measures for waste gas, waste water, solid waste and noise were
designed, constructed and put into use at the same time as the main equipment in strict accordance
with the requirements of environmental impact assessment, which are in good condition at present.
According to other rectification requirements put forward by the environmental protection
department, some new pollution prevention and control facilities have been added to further
improve the environmental protection and treatment level of the installation.
Environmental impact assessment of construction projects and other environmental
protection administrative permits
The Company's construction projects have successively passed environmental impact
assessments and other environmental protection administrative permits, or related work is in
progress.
Emergency plan for environmental emergencies
1. "Emergency Plan for Emergent Environmental Incidents of Zhejiang Baling Hengyi
Caprolactam Co., Ltd. " was filed by the local environmental protection department in July 2019.
2. The "Emergency Plan for Emergent Environmental Incidents of Zhejiang Hengyi High-tech
Material Co., Ltd. " was revised, reviewed and filed by the local environmental protection
department in March 2019.
3. The " Emergency Plan for Sudden Environmental Incidents of Zhejiang Hengyi Polymer
Co., Ltd." was revised, reviewed and filed by the local environmental protection department in
September 2018.
4. The "Emergency Plan for Sudden Environmental Incidents of Hangzhou Yijing Chemical
Fiber Co., Ltd." was revised, reviewed and filed by the local environmental protection department
in March 2019.
5. The " Emergency Plan for Emergent Environmental Incidents of Zhejiang Shuangtu New
Material Co., Ltd." was revised, reviewed and filed by the local environmental protection
department in October 2019.
6. "Emergency Plan for Emergent Environmental Incidents of Hainan Yisheng Petrochemical
148
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Co., Ltd. " was revised, reviewed and filed by the local environmental protection department in
December 2020.
7. The "Emergency Plan for Environmental Emergency of Zhejiang Yisheng Petrochemical
Co., Ltd." was revised, reviewed and filed by the local environmental protection department in
September 2020.
Environmental self-monitoring program
The Company and its subsidiaries strictly abide by national and local government
environmental protection laws, regulations and related regulations, and establish environmental
self-monitoring programs to ensure that all pollutants are discharged and reasonably disposed of in
strict accordance with the requirements of laws and regulations. The self-monitoring plan has been
disclosed in the pollution source monitoring data management system. The Company carries out
pollution source monitoring to ensure that all pollutants are discharged in strict accordance with the
requirements of laws and regulations. At the same time, it entrusts qualified third-party monitoring
units to carry out regular monitoring.
Other environmental information that should be disclosed
The environmental information that should be disclosed has been disclosed as required.
Other environmental protection related information
The Company and its subsidiaries attach great importance to environmental protection, and
make major decisions regarding the Company's environmental protection on a regular or irregular
basis. The Company has established a health, safety and environment (HSE) management
committee to implement comprehensive supervision and management of the Company's HSE work;
each subsidiary has a full-time environmental protection department responsible for daily
comprehensive management, supervision and inspection. The Company has established a strict
monitoring system and entrusted the environmental management and monitoring department to
monitor the water, gas, sound, and slag of the whole plant to grasp the pollution dynamics.
XIX. Explanation of other important matters
During the reporting period, the Company has disclosed the major issues on the
www.cninfo.com. in accordance with the "Securities Law" and the "Administrative Measures for
149
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Information Disclosure of Listed Companies", the details are as follows:
No. Announcement date Title of Announcement
Announcement on the plan to repurchase shares through centralized bidding
1 August 29, 2020
transactions (Announcement No.: 2020-090)
Announcement on the Appointment of Senior Management and Securities Affairs
2 September 16, 2020
Representatives of the Company (Announcement No.: 2020-098)
Announcement on the first repurchase of company shares (Announcement No.:
3 November 20, 2020
2020-134)
XX. Major matters of the Company's subsidiaries
No. Announce Title of Announcement Contents
ment date
Announcement on the production progress of the 1 http://www.cninfo.com.cn/new/disclosure/d
February million tons of differential environmentally friendly etail?plate=szse&orgId=gssz0000703&stoc
1
24, 2020 functional fiber project (Announcement No.: kCode=000703&announcementId=120731
2020-021) 8307&announcementTime=2020-02-24
Announcement on the commissioning of the http://www.cninfo.com.cn/new/disclosure/d
June 4, upgrade and transformation project of differential etail?plate=szse&orgId=gssz0000703&stoc
2
2020 functional fibers with an annual output of 500,000 kCode=000703&announcementId=120789
tons (Announcement No.: 2020-063) 4198&announcementTime=2020-06-04
Announcement on the subsidiary's investment in http://www.cninfo.com.cn/new/disclosure/d
August 29, the construction of a new functional fiber project etail?plate=szse&orgId=gssz0000703&stoc
3
2020 with an annual output of 566,000 tons kCode=000703&announcementId=120832
(Announcement No.: 2020-083) 5104&announcementTime=2020-08-29
Announcement on the subsidiary's investment in http://www.cninfo.com.cn/new/disclosure/d
August 29, the construction of a new functional fiber etail?plate=szse&orgId=gssz0000703&stoc
4
2020 technology transformation project with an annual kCode=000703&announcementId=120832
output of 500,000 tons (Announcement No.: 5105&announcementTime=2020-08-29
150
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
2020-084)
Announcement on the subsidiary's investment in http://www.cninfo.com.cn/new/disclosure/d
September the construction of the Phase II of the Brunei etail?plate=szse&orgId=gssz0000703&stoc
5
16, 2020 Refining and Petrochemical Project kCode=000703&announcementId=120844
(Announcement No.: 2020-099) 4483&announcementTime=2020-09-16
Announcement on the production progress of the 1 http://www.cninfo.com.cn/new/disclosure/d
October million tons of differential environmentally friendly etail?plate=szse&orgId=gssz0000703&stoc
6
13, 2020 functional fiber project (Announcement No.: kCode=000703&announcementId=120853
2020-105) 8169&announcementTime=2020-10-13
Announcement on the production progress of the 1 http://www.cninfo.com.cn/new/disclosure/d
November million tons of differential environmentally friendly etail?plate=szse&orgId=gssz0000703&stoc
7
17, 2020 functional fiber project (Announcement No.: kCode=000703&announcementId=120875
2020-132) 0316&announcementTime=2020-11-17
151
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Section VI Changes in Shares and Shareholders
I. Share changes
1. Changes in shares
Unit: Share
Before this change Increase/decrease in current period (+, -) After this change
Sc
New
ri Conversion
Propor issue Propor
p of provident
Quantity tion of Others Subtotal Quantity tion
is fund to
(%) shar (%)
su shares
es
e
I. Shares with
restrictions on 560,933,868 19.74 0 0 89,151,447 -281,792,038 -192,640,591 368,293,277 10.00
sales
3. Other
domestic 560,933,868 19.74 0 0 89,151,447 -281,792,038 -192,640,591 368,293,277 10.00
capital shares
Including:
domestic
534,610,368 18.81 0 0 81,229,197 -276,444,088 -195,214,891 339,395,477 9.22
corporate
shares
Domestic
natural person 26,323,500 0.93 0 0 7,922,250 -5,347,950 2,574,300 28,897,800 0.78
shares
II. Shares
without
2,280,791,606 80.26 0 0 763,366,196 269,194,329 1,032,560,524 3,313,352,130 90.00
restrictions on
sales
1. RMB
ordinary 2,280,791,606 80.26 0 0 763,366,196 269,194,329 1,032,560,524 3,313,352,130 90.00
shares
III. The sum
2,841,725,474 100.00 0 0 852,517,643 -12,597,709 839,919,933 3,681,645,407 100.00
of shares
152
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Reasons for changes in shares
(1) In January 2020, the Company issued shares to purchase assets and raise matching funds
and related transactions to issue shares to purchase the new shares were released from the restricted
sale and listed for circulation. The number of new shares issued in this non-public offering is
50,078,264 shares.
(2) In February 2020, the Company issued shares to purchase assets and raise matching funds
and the non-public issuance of new shares in connected transactions was lifted from the restricted
sale. The number of new shares in the non-public issuance was 213,768,115 shares.
(3) In May 2020, the Company implemented the 2019 equity distribution business, and the
Company's total share capital increased from 2,841,725,474 shares to 3,694,243,116 shares.
(4) In June 2020, the Company implemented the repurchase and cancellation business due to
performance commitments to compensate shares, and the Company's total share capital was
changed from 3,694,243,116 shares to 3,681,645,407 shares.
(5) In June 2020, the restricted stocks in the third unlocking period of the Company's second
restricted stock incentive plan were lifted from the restricted stock market.
Approval of changes in shares
(1) The Company received the "Approval on Approving Hengyi Petrochemical Co., Ltd. to
issue shares to Zhejiang Hengyi Group Co., Ltd. to Purchase Assets and Raise Supporting Funds"
issued by China Securities Regulatory Commission on November 27, 2018(licensed by the China
Securities Regulatory Commission) [2018] No. 1937)
(2) The Company’s 2019 Board of Directors held on April 26, 2020 and the 2019 Annual
General Meeting of Shareholders held on May 19, 2020 reviewed and approved the “Proposal on
the Company’s 2019 Profit Distribution” and agreed that based on the Company’s total share capital
of 2,841,725,474 shares, a cash dividend of RMB 4.00 (including tax) will be distributed to all
shareholders for every 10 shares, and 0 bonus shares will be distributed for every 10 shares.
(3) The Company’s 2019 Board of Directors held on April 26, 2020 and the 2019 Annual
General Meeting of Shareholders held on May 19, 2020 reviewed and approved the “Proposal on
Issuance of Shares to Purchase Assets and Related-Party Transaction Projects for the
Implementation of 2019 Performance Commitments and Performance Compensation", the
Company's total share capital will be reduced by 12,597,709 shares to 3,681,645,407 shares after
153
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
the compensation shares are repurchased and cancelled.
(4) The 39th meeting of the tenth board of directors of the Company held on June 12, 2020
deliberated and approved the "Proposal on the Achievement of the Unlocking Conditions of the
Third Unlocking Period of the Second Restricted Stock Incentive Plan" and agreed to that
15,260,700 restricted stocks of the 49 incentive objects' in the third unlocking period of the second
restricted stock incentive plan were unlocked according to regulations.
Transfer of share changes
(1) On January 3, 2020, the Company issued shares to purchase assets and raised matching
funds and related transactions to issue shares to purchase assets and new shares of 50,078,264
shares were lifted from sales restrictions.
(2) On February 28, 2020, the Company issued shares to purchase assets and raised matching
funds and the non-public issuance of new shares of 213,768,115 in connected transactions was
lifted from the restriction on sales.
(3) On June 24, 2020, the 15,260,700 restricted shares of restricted stocks in the third
unlocking period of the Company's second restricted stock incentive plan were lifted from the
restriction on sales.
Implementation progress of share repurchase
As of December 31, 2020, the Company has repurchased 27,485,246 shares through a
centralized bidding transaction through a special securities repurchase account, accounting for 0.75%
of the Company’s total share capital. The highest transaction price for the purchase of shares is
RMB 13.97 per share, and the lowest transaction price is RMB 11.71 per share, and the total
amount paid is RMB 349,918,604.47 (excluding commissions, transfer fees and other transaction
costs).
Progress in the implementation of the centralized bidding method to reduce the shareholding
repurchase
□ Applicable √ Not applicable
The impact of share changes on financial indicators such as basic earnings per share and
diluted earnings per share, net assets per share attributable to the Company’s common
shareholders, etc. in the recent year and the recent period
The share capital at the beginning of the reporting period was 2,841,725,474.00 shares. According
154
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
to the "Accounting Standards for Business Enterprises-Earnings Per Share", the most recent share
capital was recalculated based on the adjusted number of shares. The basic earnings per share for
the period was 1.08, and the diluted earnings per share after the change was 1.07.
Other content that the Company deems necessary or required by the securities regulatory
agency to disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
Unit: Share
Number of
Number of Number of Number of
increased
restricted restricted restricted Release
restricted Reasons for
Name of shareholders shares at the shares lifted shares at the date of
shares in restricted sale
beginning of in this end of the restriction
the current
the period period period
period
Issuance of December
Zhejiang Hengyi Group Co., Ltd. 170,592,433 0 51,177,730 221,770,163
shares to 28, 2021
Fulida Group Holding Co., Ltd. 75,124,910 25,039,132 15,025,734 65,111,512 purchase
assets and
January 3,
Xinghui Chemical Fiber Group Co., new shares in
75,124,910 25,039,132 15,025,734 65,111,512 2020
Ltd. connected
transactions
Tianjin Xinxiang Enterprise
Management Partnership (Limited 21,739,130 21,739,130 0 0
Partnership)
Sino Safe Assets Issuing
Management-Industrial and shares to
Commercial Bank-Sino Safe Assets purchase
21,380,434 21,380,434 0 0
Management Stability Zengli No. 8 assets and
Collective Asset Management raising
Product supporting February
Beixin Ruifeng Fund-Hangzhou Triya funds and 28, 2020
Investment Management Partnership non-public
(Limited Partnership)-Beixin Ruifeng 3,623,188 3,623,188 0 0 offering of
Fund Shaoxia No. 2 Single Asset shares in
Management Plan connected
Sino Safe Assets transactions
Management-Industrial and
21,380,434 21,380,434 0 0
Commercial Bank-Sino Safe Assets
Management Stability Zengli No. 9
155
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Collective Asset Management
Product
Beixin Ruifeng Fund-Hangzhou
Qingyu Investment Management
Partnership (Limited
7,246,376 7,246,376 0 0
Partnership)-Beixin Ruifeng Fund
Bairui No. 78 Single Asset
Management Plan
Beixin Ruifeng Fund-Huaxin
Trust Zhixuan No. 51 Accumulative
Fund Trust Plan-Beixin Ruifeng Fund 21,739,130 21,739,130 0 0
Huaxin Zhixuan No. 51 Single Asset
Management Plan
Beixin Ruifeng Fund-Hangzhou
Shangju Investment Management
Partnership (Limited
9,275,362 9,275,362 0 0
Partnership)-Beixin Ruifeng Fund
Guangjie No. 1 Single Asset
Management Plan
Beixin Ruifeng Fund-CITIC Wealth
Management's Huiying Series Smart
Choice Tiantian Express Wealth
40,355,077 40,355,077 0 0
Management Product-Beixin Ruifeng
Fund CITIC No. 1 Single Asset
Management Plan
Beixin Ruifeng Fund-Hangzhou
Yuting Investment Management
Partnership (Limited
2,173,913 2,173,913 0 0
Partnership)-Beixin Ruifeng Fund
Shaoxia No. 3 Single Asset
Management Plan
Beixin Ruifeng Asset
Management-Bohai Bank 2018 Botai
No. 2 Open RMB Non-guaranteed
21,376,811 21,376,811 0 0
Floating Income Wealth Management
Product-Beixin Ruifeng Asset Bohai
No. 1 Single Asset Management Plan
Xinyuan Asset
Management-"Chuangying" Portfolio
Investment Wealth Management
43,478,260 43,478,260 0 0
Product 170720-Xinyuan Assets
Xinmeihua No. 358 Single Asset
Management Plan
Total 534,610,368 263,846,379 81,229,198 351,993,187 — —
156
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Continued
Number of Number of Number of
Number of
restricted increased restricted Reasons for
restricted Release date of
Name of shareholders shares at the restricted shares shares at the restricted
shares lifted restriction
beginning of in the current end of the sale
in this period
the period period period
Ni Defeng 1,176,000 1,528,800 352,800 0
The first grant date
Wu Zhong 42,000 54,600 12,600 0
Locked after is June 12, 2017,
Zheng Xingang 672,000 873,600 201,600 0
the grant of and the unlocking
Wang Songlin 1,113,000 1,446,900 333,900 0
restricted will be performed
Chen Liancai 840,000 1,092,000 252,000 0
stock equity in three phases at a
Zhao Donghua 126,000 163,800 37,800 0
incentive ratio of 40%, 30%,
Other 43 incentive
plan and 30% within 36
objects of restricted 7,770,000 10,101,000 2,331,000 0
months.
stock incentive plan
Total 11,739,000 15,260,700 3,521,700 0 — —
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the reporting period
Unit: Share, Yuan/sheet, Ten Thousands Sheet, 100 Million Yuan, Currency: RMB
The name of
Issue price Number of Transaction
the stock and Date of issue Disclosure
(or interest Listing date approved listing termination Disclosure Index
its derivative issue number date
rate) transactions date
securities
Convertible corporate bonds, separately traded convertible corporate bonds, corporate bonds
www.cninfo.com.cn:
Public Issuance of
Corporate Bonds to
March 11, March 23, March 13, Qualified Investors in March 13,
20 Hengyi 01 5.89% 10 10
2020 2020 2023 2020 (Phase 1) 2020
(Pandemic Prevention
and Control Bonds)
Announcement
Hengyi Issuance Juchao Information
October 16, November October 15, November
Convertible at par 2,000 2,000 Network: Listing
2020 16, 2020 2026 12, 2020
Bond value Announcement
Explanation of securities issuance (excluding preferred shares) during the reporting period
Corporate bonds:
(1) During the reporting period, the Company issued "20 Hengyi 01" corporate bonds, raising a
total of RMB 1 billion, and the value date is March 13, 2020. For details of the Company's bond
157
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
issuance, please refer to "Section X Corporate Bonds Related Information" of this report.
(2) During the reporting period, the Company issued "Hengyi Convertible Bonds" convertible
corporate bonds, raising a total of RMB 2 billion, and the value date is October 16, 2020. For
details about the Company's issuance of convertible corporate bonds, please refer to "Section VIII
Related Information about Convertible Corporate Bonds" of this report.
2. Description of changes in the total number of company shares and shareholder structure,
and changes in the Company's assets and liabilities structure
The Company implemented the repurchase and cancellation of 2019 profit distribution and
performance commitments during the reporting period. The total number of shares has changed
from 2,841,725,474 shares at the beginning of the period to 3,681,645,407 shares as of the
disclosure date of this report.
3. Existing internal employee shares
□ Applicable √ Not applicable
158
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
III. Shareholders and actual controllers
1. Number of shareholders and shareholding of the Company
Unit: Share
Total number of ordinary shareholders at the end of the Total number of shareholders as of March 31,
33,917 44,831
reporting period 2021
Shareholding of shareholders holding more than 5% or the top 10 shareholders
Changes of Pledge or freeze
Number of Number of
increase and Number of situation
Sharehol shares held at shares with
Nature of decrease in shares with
Name of shareholders ding the end of the restricted
shareholders the unrestricted
Ratio reporting sale Share
reporting sale conditions Quantity
period conditions status
period
Domestic
Pledg
Zhejiang Hengyi Group Co., Ltd. non-state legal 40.86% 1,504,313,458 337,458,714 209,172,454 1,295,141,004 1,129,851,061
ed
person
Domestic
Hangzhou Hengyi Investment Co.,
non-state legal 6.96% 256,338,027 59,154,929 0 256,338,027
Ltd.
person
Guangdong Fuye Shengde Asset
Management Co., Ltd.-Fuye Shengde
Others 4.30% 158,382,926 158,382,926 0 158,382,926
No. 1 Private Securities Investment
Fund
159
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Huaneng Guicheng Trust Co.,
Ltd.-Huaneng TrustJinyi Xincheng Others 3.61% 132,801,538 132,801,538 0 132,801,538
Accumulative Fund Trust
Domestic
Xinghui Chemical Fiber Group Co.,
non-state legal 2.65% 97,662,383 22,537,473 65,111,511 32,550,872
Ltd.
person
Hong Kong Securities Clearing Foreign legal
1.85% 68,121,317 68,121,317 0 68,121,317
Company Limited person
Chang’an International Trust Co.,
Ltd.-Chang’an Trust-Hengyi
Others 1.74% 64,236,044 -24,752,451 0 64,236,044
Petrochemical Phase III Employee
Stock Ownership Trust Plan
Domestic
Kingold Group Co., Ltd. non-state legal 1.52% 55,787,988 55,787,988 0 55,787,988
person
Domestic
Freez
Fulida Group Holding Co., Ltd. non-state legal 1.04% 38,421,512 -36,703,398 38,421,512 0 34,093,512
ed
person
Domestic natural
Wang Li 0.83% 30,395,693 30,395,693 0 30,395,693
person
Strategic investors or general legal persons become the top 10
None
shareholders due to the placement of new shares (if any) (see Note 3)
Among the top 10 shareholders, Hangzhou Hengyi Investment Co., Ltd. is a holding
Description of the above-mentioned shareholders' connected
subsidiary of Hengyi Group. As of the disclosure date of this report, the Company's
relationship or concerted action
controlling shareholder Hengyi Group and its concerted parties pledged 1,129,851,061
160
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
shares of the Company, accounting for 64.17% of its shares, of which 872,634,523 shares
(accounting for 49.56% of its shares) are the credit enhancement guarantee provided by
company's controlling shareholders for Hengyi Brunei for a project loan of US$1. 75
billion or equivalent overseas RMB, the above pledge does not involve the obligation of
stock covering position, and there is no liquidation risk.
Continued
Shareholdings of the top 10 shareholders with unrestricted sales conditions
Name of shareholders Number of unrestricted shares held at the end of the reporting period Types of shares
Zhejiang Hengyi Group Co., Ltd. 1,295,141,004 RMB ordinary shares
Hangzhou Hengyi Investment Co., Ltd. 256,338,027 RMB ordinary shares
Guangdong Fuye Shengde Asset Management Co., Ltd.-Fuye
158,382,926 RMB ordinary shares
Shengde No. 1 Private Securities Investment Fund
Huaneng Guicheng Trust Co., Ltd.-Huaneng TrustJinyi
132,801,538 RMB ordinary shares
Xincheng Accumulative Fund Trust
Hong Kong Securities Clearing Company Limited 68,121,317 RMB ordinary shares
Chang’an International Trust Co., Ltd.-Chang’an
Trust-Hengyi Petrochemical Phase III Employee Stock 64,236,044 RMB ordinary shares
Ownership Trust Plan
Kingold Group Co., Ltd. 55,787,988 RMB ordinary shares
Xinghui Chemical Fiber Group Co., Ltd. 32,550,872 RMB ordinary shares
Wang Li 30,395,693 RMB ordinary shares
China Life Asset Management-Bank of China-China Life
30,191,379 RMB ordinary shares
Assets-Phoenix Series Special Products (Phase 5)
161
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Explanation of the related relationship or concerted action
among the top 10 shareholders of unlimited tradable shares, Among the top 10 shareholders, Hangzhou Hengyi Investment Co., Ltd. is a holding subsidiary of
and between the top 10 shareholders of unlimited tradable Hengyi Group.
shares and the top 10 shareholders
1. The Company's shareholder Zhejiang Hengyi Group Co., Ltd. holds 1,465,851,272 shares through
ordinary securities accounts, and also holds 38,462,186 shares through customer credit transaction
guarantee securities accounts of CITIC Securities Co., Ltd., a total of 1,504,313,458 shares.
2. The Company's shareholder Hangzhou Hengyi Investment Co., Ltd. holds 76,338,027 shares
through ordinary securities accounts, and also holds 180,000,000 shares through customer credit
transaction guarantee securities accounts of Soochow Securities Co., Ltd., a total of 256,338,027
shares.
Explanation on the participation of the top 10 ordinary 3. The Company’s shareholder Guangdong Fuye Shengde Asset Management Co., Ltd.-Fuye
shareholders in margin trading and securities lending Shengde Shengde No. 1 Private Securities Investment Fund holds 0 shares through an ordinary
business (if any) (see Note 4) securities account, and also holds 158,382,926 shares through a customer credit transaction guarantee
securities account of Huatai Securities, holding a total of 158,382,926 shares.
4. The Company's shareholder Kingold Group Co., Ltd. holds 0 shares through ordinary securities
accounts, and also holds 55,787,988 shares through customer credit transaction guarantee securities
accounts of China Merchants Securities Co., Ltd., holding a total of 55,787,988 shares.
5. The Company's shareholder Wang Li holds 0 shares through an ordinary securities account, and
also holds 30,395,693 shares through the customer credit transaction guarantee securities account of
Zheshang Securities Co., Ltd., holding a total of 30,395,693 shares.
162
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Whether the Company’s top 10 common stock shareholders and top 10 common stock
shareholders with unrestricted sales conditions conducted agreed repurchase transactions
during the reporting period
The Company's top 10 common stock shareholders and the top 10 common stock shareholders
with unrestricted sales conditions did not engage in an agreed repurchase transaction during the
reporting period.
2. The Company’s controlling shareholder
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Legal person
Legal
Date of
Name of controlling shareholder representative/p Organization Code Main business
establishment
erson in charge
Industrial
investment,
October 18,
Hengyi Group Qiu Jianlin 91330109143586141L production and sales
1994
of textile materials
and products, etc.
The controlling shareholder's
equity of other domestic and As of the disclosure date of this report, Hengyi Group currently holds
overseas listed companies that 494,655,630 shares of Zheshang Bank Co., Ltd. (stock code: 601916. SH,
hold or participate in shares during 02016.HK), Accounting for 2.33% of its total share capital
the reporting period
Change of controlling shareholder during the reporting period
The controlling shareholder of the Company remained unchanged during the reporting period.
3. The actual controller of the Company and those acting in concert
Nature of actual controller: domestic natural person
Type of actual controller: natural person
163
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Relationship with Whether to obtain the right of
Actual controller Nationality
actual controller abode in other countries or regions
Qiu Jianlin Personally China No
Since 1994, Mr. Qiu Jianlin has been the chairman of Zhejiang Hengyi
Main occupations and Group Co., Ltd. In addition, Qiu Jianlin also served as the vice
positions chairman of China Chemical Fiber Industry Association and other social
appointments.
As of the disclosure date of this report, Mr. Qiu Jianlin is the actual
Status of domestic and
controller of Hengyi Group. Hengyi Group directly holds 40.86% of the
overseas listed
Company’s shares, holds 6.96% of the Company’s shares through
companies that have held
Hengyi Investment, the holding subsidiary of Hengyi Group (Hengyi
holdings in the past 10
Group holds 60% of Hengyi Investment shares), therefore, Mr. Qiu
years
Jianlin is the actual controller of the Company
Change of actual controller during the reporting period
There was no change in the actual controller of the Company during the reporting period.
Block diagram of the property rights and control relationship between the Company and the
actual controller
164
2020 Annual Report of Hengyi Petrochemical Co., Ltd.
Sibling relationship
Nephew与邱利荣系
relationship 与邱祥娟系 Qiu
邱建林
Qiu Jianlin
between Qiu Jianli
