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Sinopec Shanghai Petrochemical Co. Ltd. – ‘6-K’ for 9/14/22

On:  Thursday, 9/15/22, at 6:07am ET   ·   For:  9/14/22   ·   Accession #:  1193125-22-245118   ·   File #:  1-12158

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/15/22  Sinopec Shanghai Petrochemic… Ltd 6-K         9/14/22    3:1M                                     Donnelley … Solutions/FA

Current, Quarterly or Annual Report by a Foreign Issuer   —   Form 6-K   —   SEA’34

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Current, Quarterly or Annual Report by a Foreign    HTML    960K 
                Issuer                                                           
 2: EX-99.1     Miscellaneous Exhibit                               HTML     33K 
 3: EX-99.2     Miscellaneous Exhibit                               HTML     14K 


‘6-K’   —   Current, Quarterly or Annual Report by a Foreign Issuer


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  Form 6-K  

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of September 2022

Commission File Number: 1-12158

 

 

Sinopec Shanghai Petrochemical Company Limited

(Translation of registrant’s name into English)

 

 

No. 48 Jinyi Road, Jinshan District, Shanghai, 200540

The People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


EXHIBITS

 

Exhibit
Number

    
99.1    Resolution Passed at the Second Extraordinary General Meeting for 2022
99.2    List of Directors and their Role and Function

Disclaimer—Forward-Looking Statements

We may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, expectations, developments and business strategies. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavor”, “target”, “forecast” and “project” and similar expressions are intended to identify such forward-looking statements but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. If one or more of these risks materialize, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors and others are discussed more fully under the section titled “Item 3. Key Information—C. Risk Factors” in our most recent annual report on Form 20-F filed on April 28, 2022, and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED
Date: September 14, 2022     By:  

/s/ Wan Tao

    Name:   Wan Tao
    Title:   Chairman of the Board of Directors


LOGO

 

LOGO

(A joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 00338)

2022 Interim Results Announcement

For the Six Months Ended 30 June 2022

 

1.

IMPORTANT MESSAGE

 

1.1

This interim results summary of Sinopec Shanghai Petrochemical Company Limited (the “Company” or “Sinopec Shanghai”, together with its subsidiaries, the “Group”) for the six months ended 30 June 2022 (the “Reporting Period”) is extracted from the full text of the 2022 interim report. For detailed content, investors are advised to read the full text of the 2022 interim report which is published on the websites of the Shanghai Stock Exchange or other designated website of China Securities Regulatory Commission (“CSRC”), Hong Kong Exchanges and Clearing Limited and the Company.

 

1.2

Corporate Information

 

A Shares   

Stock Exchange Listing

Stock Short Name

Stock Code

  

Shanghai Stock Exchange

SHANGHAI PECHEM

600688

H Shares:   

Stock Exchange Listing

Stock Short Name

Stock Code

  

The Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”)

SHANGHAI PECHEM

00338

American Depository Receipts (“ADR”):   

Stock Exchange Listing

Stock Code

  

New York Stock Exchange

SHI

  

Secretary to the Board

  

Securities Affairs Representative

Name    Liu Gang    Yu Guangxian
Correspondence Address   

48 Jinyi Road, Jinshan District, Shanghai, the People’s Republic of China (the “PRC”)

Postal Code: 200540

  

48 Jinyi Road, Jinshan District, Shanghai, the PRC

Postal Code: 200540

Telephone    8621-57943143    8621-57933728
Fax    8621-57940050    8621-57940050
E-mail    liugang@spc.com.cn    yuguangxian@spc.com.cn

 

1


2.

MAJOR FINANCIAL DATA AND SHAREHOLDERS STATUS

 

2.1

Major Financial Data

Prepared under the People’s Republic of China (“China”) Accounting Standards for Business Enterprises (“CAS”)

 

  2.1.1

Major Accounting Data

Unit: RMB’ 000

 

Major accounting data

   The Reporting Period
(January to June)
     Corresponding period
of the previous year
     Increase/decrease as compared
to the corresponding period

of the previous year (%)
 

Operating income

     45,900,355        37,136,606        23.60  

Total (loss) / profit

     -442,601        1,510,713        -129.30  

Net (loss)/profit attributable to equity shareholders of the company

     -436,009        1,244,189        -135.04  

Net (loss)/profit attributable to equity shareholders of the company excluding non-recurring items

     -402,544        1,169,426        -134.42  

Net cash used in operating activities

     -6,405,122        -2,389,552        168.05  
     As at the end of the
Reporting Period
     As at the end of
the previous year
     Increase/decrease at the end
of the Reporting Period
as compared to the end
of the previous year (%)
 

Net assets attributable to equity shareholders of the Company

     28,875,824        30,260,172        -4.57  

Total assets

     42,481,112        47,038,622        -9.69  

 

2


  2.1.2

Major Financial Indicators

 

Major financial indicators

   The Reporting Period
(January to June)
     Corresponding period
of the previous year
     Increase/decrease as
compared to the
corresponding period

of the previous year (%)
 

Basic (losses)/earnings per share (RMB/Share)

     -0.040        0.115        Not applicable  

Diluted (losses)/earnings per share (RMB/Share)

     -0.040        0.115        Not applicable  

Basic (losses)/earnings per share after non-recurring items (RMB/Share)

     -0.037        0.108        Not applicable  

(Loss)/return on net assets (weighted average) (%)*

     -1.448        4.164       


Decrease 5.61

percentage
points

 

 
 

(Loss)/return on net assets after non-recurring items (weighted average) (%)*

     -1.337        3.913       


Decrease 5.25

percentage
points

 

 
 

 

*

The above-mentioned net assets do not include non-controlling interests.

 

  2.1.3

Differences between Financial Statements Prepared under CAS and those Prepared under International Financial Reporting Standards (“IFRS”)

Unit: RMB’ 000

 

     Net (loss)/profit attributable to equity
shareholders of the holding company
     Total equity attributable to
equity shareholders of the holding company
 
     The Reporting
Period
     Corresponding
period of the
previous year
     At the end of the
Reporting Period
     At the beginning of
the Reporting
Period
 

Prepared under CAS

     -436,009        1,244,189        28,875,824        30,260,172  

Prepared under IFRS

     -426,518        1,276,462        28,858,796        30,242,139  

For a detailed description of the differences between financial statements prepared under CAS and those prepared under IFRS, please refer to the Supplementary Information to the Financial Statements prepared under CAS.

 

3


  2.1.4

Non-recurring Profit and Loss Items (Prepared under CAS)

Unit: RMB’ 000

 

Non-recurring profit and loss items

   Amount  

Losses on disposal of non-current assets

     -5,960  

Government grants recorded in profit and loss

     10,905  

Employee reduction expenses

     -8,251  

Losses from changes in fair value of financial assets and liabilities

     -8,987  

Gains from structured deposits

     9,300  

Losses on disposal of derivative financial instruments

     -18,618  

Losses on selling of financial assets at fair value through other comprehensive income

     -2,187  

Entrusted loan income

     2,667  

Other non-operating income and expenses other than those mentioned above

     -20,106  

Income tax effect for the above items

     7,706  

Effect attributable to non-controlling interests (after tax)

     66  
  

 

 

 

Total

     -33,465  
  

 

 

 

 

4


2.2

Shareholding of the Top Ten Shareholders as at the end of the Reporting Period

 

Number of shareholders of ordinary shares as at the end of the Reporting Period

     105,475  

 

Shareholding of the top ten shareholders Shares    Unit:

 

Name of shareholders

(Full name)

   Class of
shares
     Increase/
decrease of
shareholding

during the
Reporting

Period (shares)
     Number of
shares held
at the end of
the Reporting
Period (shares)
     Percentage of
Shareholding

(%)
     Number of
shares held
with selling

restrictions
(shares)
     Pledged/frozen      Nature of
shareholders
 
   Status
of shares
     Number
of shares
 

China Petroleum & Chemical Corporation

     A shares        0        5,459,455,000        50.44        0        None        0       
State-owned
legal person
 
 

HKSCC (Nominees) Limited

     H shares        -1,331,000        3,452,508,030        31.90        0        Unknown        —         

Overseas

legal person

 

 

HKSCC Limited

     A shares        -37,758,402        77,391,306        0.72        0        None        0       

Overseas

legal person

 

 

Wang Lei

     A shares        -11,535,500        56,120,300        0.52        0        None        0       

Domestic
natural
person
 
 
 

GF Fund – Agricultural Bank of China – GF CSI Financial Asset Management Plan

     A shares        -19,179,415        45,222,300        0.42        0        None        0        Others  

Dacheng Fund –Agricultural Bank of China – Dacheng CSI Financial Asset Management Plan

     A shares        -1,690,831        43,531,469        0.40        0        None        0        Others  

China Southern Fund– Agricultural Bank of China – China Southern CSI Financial Asset Management Plan

     A shares        0        43,083,700        0.40        0        None        0        Others  

Yinhua Fund– Agricultural Bank of China – Yinhua CSI Financial Asset Management Plan

     A shares        -31,984        43,051,716        0.40        0        None        0        Others  

E Fund Fund– Agricultural Bank of China – E Fund CSI Financial Asset Management Plan

     A shares        -45,050        43,038,700        0.40        0        None        0        Others  

Bosera Fund –Agricultural Bank of China – Bosera CSI Financial Asset Management Plan

     A shares        -855,769        42,675,700        0.39        0        None        0        Others  

Note on connected relations or acting in concert of the above shareholders

    





Among the above-mentioned shareholders, China Petroleum & Chemical Corporation (“Sinopec
Corp.”
), a State-owned legal person, does not have any connected relationship with the other
shareholders, and does not constitute an act-in-concert party under the Administrative Measures on
Acquisition of Listed Companies. Among the above-mentioned shareholders, HKSCC (Nominees)
Limited is a nominee. Apart from the above, the Company is not aware of any connected relationship
among the other shareholders, or whether any other shareholder constitutes an acting-in-concert party
under the Administrative Measures on Acquisition of Listed Companies.

 
 
 
 
 
 
 

Note:Sinopec Group held 44,660,000 H shares of the Company through its overseas wholly-owned subsidiary Shengjun International Investment Co., Ltd., accounting for 0.4126% of the total share of the Company. These shares were included in the total shares held by HKSCC (Nominees) Limited.

 

5


2.3

Interests and short positions of the substantial shareholders of the Company in shares and underlying shares of the Company

As at 30 June 2022, so far as was known to the Directors or chief executive of the Company, the interests and short positions of the Company’s substantial shareholders (being those who are entitled to exercise or control the exercise of 5% or more of the voting power at any general meeting of the Company but excluding the Directors, chief executive and Supervisors) in the shares and underlying shares of the Company who are required to disclose their interests pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the “SFO”) or as recorded in the register of interests required to be kept under section 336 of the SFO were as set out below:

Interests in ordinary shares of the Company

 

Name of shareholder

   Interests held or
deemed as held (shares)
    Note     Percentage
of total
issued shares
of the
Company
(%)
    Percentage of
total issued
shares of the
relevant class
(%)
    Capacity

China Petroleum & Chemical Corporation (“Sinopec Corp.”)

    

5,460,000,000 A shares (L

Shares of legal person


 

    (1     50.44(L     74.50(L   Beneficial owner

The Bank of New York Mellon Corporation

    

302,534,137H shares (L

279,368,500H shares (S

23,159,637H shares (P


    (2    

2.80(L

2.58(S

0.21(P


   

8.66(L

7.99(S

0.66(P


  Interests of controlled corporation

Corn Capital Company Limited

    
211,008,000H shares (L)
200,020,000H shares (S)
 
 
    (3    

1.95(L

1.85(S


   

6.04(L

5.72(S


  Beneficial owner

Hung Hin Fai

    

211,008,000H shares (L

200,020,000H shares (S


    (4    

1.95(L

1.85(S


   

6.04(L

5.72(S


  Interests of controlled corporation

Yardley Finance Limited

     200,020,000H shares (L     (5     1.85(L     5.72(L   Secured equity holders

Chan Kin Sun

     200,020,000H shares (L     (5     1.85(L     5.72(L   Interests of controlled corporation

(L): Long position; (S): Short position; (P): Lending Pool

 

6


Note:

 

  (1)

Based on the information obtained by the Directors from the website of The Hong Kong Stock Exchange and as far as the Directors are aware, China Petrochemical Corporation directly and indirectly owned 68.31% of the issued share capital of Sinopec Corp as at 30 June 2022. By virtue of such relationship, Sinopec Group is deemed to have an interest in the 5,460,000,000 A shares of the Company directly owned by Sinopec Corp.

 

  (2)

All the 302,534,137 H shares (long position) and 279,368,500 H shares (short position) are deemed to be held by The Bank of New York Mellon Corporation, due to control of multiple companies (among which 279,368,500 H shares (short position) are held through physical-settlement unlisted derivatives). Below are the companies indirectly or wholly owned by The Bank of New York Mellon Corporation:

 

  (2.1)

All the 6,000 H shares (long position) are held by BNY Mellon, National Association. Since BNY Mellon, National Association is wholly owned by The Bank of New York Mellon Corporation, The Bank of New York Mellon Corporation is deemed to have an interest in the 6,000 H shares (long position) of the Company held by BNY Mellon, National Association.

 

  (2.2)

302,534,137 H shares (long position) and 279,368,500 H shares (short position) of the Company are held directly or indirectly by The Bank of New York Mellon. The Bank of New York Mellon is wholly owned by The Bank of New York Mellon Corporation. Therefore, The Bank of New York Mellon Corporation was deemed to be interested in 302,534,137 H shares (long position) and 279,368,500 H shares (short position) held by The Bank of New York Mellon.

 

  (3)

These shares were held by Corn Capital Company Limited. Hung Hin Fai held 100% interests in Corn Capital Company Limited. Pursuant to the SFO, Hung Hin Fai was deemed to be interested in the shares held by Corn Capital Company Limited.

 

  (4)

These shares were held by Yardley Finance Limited. Chan Kin Sun held 100% interests in Yardley Finance Limited. Pursuant to the SFO, Chan Kin Sun was deemed to be interested in the shares held by Yardley Finance Limited.

Save as disclosed above, as at 30 June 2022, the Directors have not been notified by any person (other than the Directors, chief executive and Supervisors) who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO or as recorded in the register of interests required to be kept by the Company under Section 336 of the SFO.

 

7


2.4

Interests and Short Positions of the Directors, Chief Executive and Supervisors in Shares and Underlying Shares and Debentures of the Company or its Associate Corporation

As at 30 June 2022, the interests and short positions of the Directors, chief executive and Supervisors of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or to be recorded in the register of interests required to be kept under Section 352 of the SFO; or as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant the “Model Code for Securities Transactions” set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Hong Kong Listing Rules”) were as follows:

Interests in the Shares and Underlying Shares of the Company

 

Name

   Position    Number of
shares
(shares)
  Percentage
of total issued
shares (%)
     Percentage
of total issued
A shares (%)
     Capacity  

Huang Xiangyu

   Executive Director and
Vice President
   140,000 A

shares (L)

    0.0013        0.0019        Beneficial owner  

Zhang Feng

   Supervisor    10,000 A

shares (L)

    0.0001        0.0001        Beneficial owner  

Chen Hongjun

   Supervisor    31,400 A

shares (L)

    0.0003        0.0004        Beneficial owner  

(L): Long position

Save as disclosed above, as at 30 June 2022, so far as was known to the Directors, chief executive and Supervisors of the Company, none of the Directors, chief executive or Supervisors of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or its associated corporations which were required to be disclosed or recorded pursuant to the SFO and the Hong Kong Listing Rules as mentioned above.

 

8


3.

REPORT OF THE DIRECTORS

 

3.1

Management Discussion and Analysis of the Overall Operations during the Reporting Period

(The following discussion and analysis should be read in conjunction with the unaudited financial report of the Group and the notes in the 2022 interim report. Unless otherwise specified, certain financial data involved the 2022 interim report hereinafter are extracted from the unaudited interim financial report of the Group prepared in accordance with IFRS.)

Review and Discussion of Operating Results

In the first half of 2022, the global economic growth slowed down, and China effectively coordinated COVID-19 prevention and control and economic and social development. The nation managed to achieve the gross domestic product (GDP) growth of 2.5% year-on-year in the first half of this year

In the first half of 2022, in the face of high and violent energy prices, increasing industrial competition pressure, supply chain congestion caused by the Shanghai epidemic, and shrinking downstream market demand, the Group adhered to the principle of “pursuing the advanced standards and keeping up with the highest standards”. While taking measures to prevent the pandemic, it ensured that the production and operation was uninterrupted and various operational targets were met in an orderly manner. For the six months ended 30 June 2022, the Group generated revenue of RMB45.859 billion, representing an increase of RMB8.771 billion or a growth rate of 23.65%. Loss before taxation amounted to RMB0.433 billion (1H2021: profit before taxation of RMB1.543 billion), representing a decrease of RMB1.976 billion from the same period of last year. Loss after taxation and excluding non-controlling shareholders’ interests was RMB0.427 billion (1H2021: profit after taxation and excluding non-controlling shareholders’ interests of RMB1.276 billion), representing a decrease of RMB1.703 billion.

 

9


Dragged by the pandemic as well as repair and maintenance work, the total volume of goods within the main commodity categories produced by the Group reduced by 8.07% year-on-year to 5.4317 million tons in the first half of 2022. For the period between January and June, it processed a total of 5.7951 million tons of crude oil (of which 172.8 thousand tons were processed on order), down 6.68% year-on-year. Refined oil output amounted to 3.1534 million tons, representing a 12.85% year-on-year decrease. The gasoline production reduced by 0.88% year-on-year to 1.4483 million tons, the diesel production reduced by 15.32% year-on-year to 1.3112 million tons, the jet fuel production cut by 35.32% year-on-year to 393.8 thousand tons, while the liquefied gas production increased by 23.41% year-on-year to 326.3 thousand tons. Ethylene production increased by 16.67% year-on-year to 353.5 thousand tons, p-xylene production jumped by 116.01% year-on-year to 318.4 thousand tons. Production of plastics, resins and copolymers (excluding polyester and polyvinyl alcohol) reduced by 0.16% year-on-year to 450.5 thousand tons, production of raw materials of synthetic fibers reduced by 54.62% year-on-year to 60.9 thousand tons, production of synthetic fiber polymers dropped by 60.09% year-on-year to 68.6 thousand tons, and production of synthetic fibers dropped by 80.55% year-on-year to 10.6 thousand tons. The Group’s product sale rate for the first half of this year was 98.74% and the payment return rate was 100% (excluding connected companies).

 

10


The Group focused on epidemic prevention and control to ensure production and operation. In the first half of the year, the Group strictly implemented the epidemic prevention and control measures, and “zero infection” was achieved among the resident employees, successfully completed various anti epidemic tasks. It strongly supported the local anti-epidemic and was highly praised by the local government and medical team members. The Company optimized and adjusted the maintenance equipment and material control, strengthened the balance and operation coordination of public works, and continued to strengthen the process technology management and energy saving management. Among the 56 major technical and economic indicators under monitoring, 17 items reached the advanced level of the industry while the performance of 30 items was better than last year, with a year-on-year progress rate of 53.57%. Practicing the concept of green development, for the period between January and June, the compliance rate of waste water treatment reached 100% and the total mission volume of ammonia, nitrogen and sulphur dioxide dropped by 58.93% and 8.78% year-on-year respectively. The average contraction rate of volatile organic compounds (VOCs) at plant boundary reduced by 25.76% from a year ago. Continuously promoting the implementation of HSE management system, unfortunately, an explosion occurred at the Company’s 1# ethylene glycol equipment on 18 June. Afterwards, the Company’s major production facilities were forced to shut down. Up to now, the cause of the accident is under investigation and the production facilities have resumed production in an orderly manner.

Persistent efforts were made to construct project and to optimize the operating system. In the first half of the year, the Group persistently pushed for the 48K large tow carbon fiber project, the 250,000 ton/year elastomer project and the plant distributed photovoltaic power generation project, etc.. The Group took the effect-oriented approach and insisted on dynamic optimization. By tracking and predicting the crude oil market movement, it adjusted the crude oil mix procured and hence lowering the procurement costs. Refined oil and chemical product structure was vigorously adjusted and the grading of plastic and chemical fiber products was optimized. The diesel-gasoline ratio for the first half was 0.91, representing a year-on-year decrease of 0.15. The market-oriented approach facilitated the linkage between production and marketing. Three-month rolling price forecast was persistently promoted in the practice and application of production optimization. Meanwhile, budget and fee management was enhanced, and the cost input-output efficiency continuously improved, leading to effective fund utilization.

 

11


The Group focused on scientific and technological innovation and promoted industrial application. In the first half of the year, efforts to drive breakthroughs in the core technology for carbon fibers and composite materials as well as their application and mass production were sped up, the 100 ton high-performance test device project were steadily promoted and the R&D, mass production and service support tasks of the torch for Beijing 2022 Winter Olympic Games and Winter Paralympic Games were successfully completed. The Group awarded by the CPC Central Committee and the State Council as “outstanding contribution collective for the Beijing Winter Olympic Games and the Winter Paralympic Games”. The Group deepened the legal and compliance management of scientific research, strengthened the protection of intellectual property rights, a total of 55 items were submitted for patent application and 39 items were granted patent licences. The standards of informatization management were persistently improved. In the first half, the Company produced a total of 65.8 thousand tons of new products. Output of new synthetic resin products and high value-added polyolefin products amounted to 363.4 thousand tons.

While deepening reform, the Group promoted management improvement. In the first half of the year, the Group relentlessly promoted the three-year action plan to deepen reform, and 55 work tasks and 238 action projects were fully completed. The Group strengthened benchmarking and first-class management to improve action process management, and completed all of the 115 action projects. Its management system was optimized and the organization structure was transformed from the one driven by traditional functional management to the one driven by businesses and values. A new carbon fiber business unit was set up and new units for “triple news” (new energy, new materials and new economy) were established to support the development of carbon fibers and new energy operations. The Group comprehensively launched the pilot and promote 5S (SEIRI, SEITON, SEISO, SEIKETSU and SHITSUKE) management work and carried out the “compliance management enhancement year” activity. The Group optimized workforce development, enhanced basic staff trainings, raised operating staff’s awareness of the code on work safety and operation procedures, and strove hard to improve their work safety know-how. It enhanced talent selection and encouraged high-level personnel to exert their potentials. Through standardized management, it stepped up efforts to attract and retain talents.

 

12


The following table sets forth the Group’s sales volume and net sales after business tax and surcharges for the Reporting Period:

 

     For the six months ended 30 June  
     2022      2021  
     Sales volume
(‘000 tons)
     Net sales
(RMB million)
     %      Sales volume
(‘000 tons)
     Net sales
(RMB million)
     %  

Synthetic fibers

     11.3        230.0        0.6        56.2        728.7        2.3  

Resins and plastics

     502.1        4,300.4        10.7        591.2        4,657.6        14.7  

Intermediate petrochemicals

     908.9        6,409.2        16.0        771.3        3,839.8        12.2  

Petroleum products

     3,940.9        21,846.7        54.4        4,528.8        17,005.9        53.8  

Trading of petrochemical products

     —          6,950.7        17.3        —          5,042.7        15.9  

Others

     —          405.2        1.0        —          360.8        1.1  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     5,363.2        40,142.2        100.0        5,947.5        31,635.5        100.0  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

13


In the first half of 2022, the Group achieved a total net sales of RMB40.142 billion, an increase of 26.89% compared with the same period last year, of which the net sales of intermediate petrochemical products, petroleum products and trading of petrochemical products increased by 66.91%, 28.47% and 37.84% respectively. The net sales of synthetic fibers, resins and plastics fell by 68.44% and 7.67% respectively. Affected by plant shutdowns and rising product prices, except for intermediate petrochemical products, the sales volume of each sector dropped significantly. Synthetic fibers, resins and plastics, and petroleum products decreased by 79.89%, 15.07% and 12.89% respectively. The weighted average selling prices of all sectors increased over the same period of last year due to the increase in crude oil prices. In the first half of 2022, the Group’s cost of sales was RMB40.681 billion, an increase of 31.95% from the same period last year and accounting for 101.34% of net sales.

In the first half of 2022, the Group’s crude oil unit processing cost was RMB4,540.43/ton, an increase of RMB1,691.30/ton or 59.36% compared to the same period last year. The crude oil processing capacity of the Group was 5,795,100 tons (including 172,800 tons of processing materials supplied), a decrease of 415,000 tons from the same period last year (including a decrease of 390,300 tons in the Group’s self produced crude oil processing capacity). From January to June this year, the cost of crude oil processing increased by RMB8.397 billion. Among them, the decrease of crude oil processing volume resulting in the cost decreased by RMB1.112 billion, and the unit processing cost increased resulting in the cost increased by RMB9.509 billion. Crude oil costs accounted for 62.75% of the Group’s cost of sales in the first half of the year.

 

14


In the first half of 2022, the Group’s expenditure on other excipients was RMB4.886 billion, a decrease of 6.22% from the same period last year. During the Reporting Period, the Group’s depreciation and amortization expenses and maintenance expenses were RMB876 million and RMB834 million respectively. Depreciation and amortization expenses dropped by 6.60% year-on-year mainly due to the expiration of the depreciation period of some fixed assets from the second half of last year to the first half of this year; maintenance costs decreased by 17.20% year-on-year mainly because a major overhaul was carried out in the same period last year, with a large overhaul expenditure.

In the first half of 2022, the Group recorded sales expenses of RMB174.6 million, a decrease of 16.74% from RMB209.7 million in the same period last year mainly because the freight of RMB54.7 million in the handling and incidental expenses was accounted as the contract performance cost in the sales cost.

In the first half of 2022, the Group’s income from other business was RMB47.7 million, a decrease of RMB8.5 million over the same period last year mainly due to a decrease in rental income of RMB7.0 million and a decrease in other income such as government subsidy income of RMB1.5 million during the Reporting Period.

In the first half of 2022, the Group reported a financial net income of RMB279.3 million, compared to financial net income of RMB210.5 million in the same period last year. The increase was mainly due to an increase in interest income of RMB80.5 million during the Reporting Period. In the first half of 2022, the Group achieved a loss after taxation excluding non-controlling interests of RMB426.5 million, a decrease of RMB1,703.0 million from the profit of RMB1,276.5 million in the same period last year.

 

15


Liquidity and Capital Resources

In the first half of 2022, the Group’s net cash outflow from operating activities was RMB6,455.6 million, compared with a net cash outflow of RMB2,443.4 million in the same period last year.

In the first half of 2022, the Group’s net cash inflow from investment activities was RMB1,776.7 million, compared with a net cash outflow of RMB3,106.4 million in the same period last year. This is mainly due to the net cash inflow of the Group’s term deposit, structured deposit investment and recovery during the Reporting Period of RMB2.350 billion, an increase of RMB4.300 billion over the same period of last year, and the dividend received from the joint venture during the Reporting Period of RMB576.1 million, an increase of RMB521.1 million over the same period of last year.

In the first half of 2022, the Group generated a net cash inflow of RMB1,996.8 million from financing activities, compared with a net cash inflow of RMB2.8 million in the same period last year. This is mainly due to the increase of net cash flow generated by borrows and short-term bonds obtained and repaid by the Group during the Reporting Period of RMB1,999.8 million compared with the same period last year.

Borrowings and Debts

The Group’s long-term borrowings are mainly used for capital expansion projects. The Group generally arranges long-term borrowings in accordance with capital expenditure plans. The short-term debt is used to supplement the working capital required by the normal production and operation of the Group. As of 30 June 2022, the total loan balance of the Group increased by RMB500 million from the opening balance to RMB2.760 billion. The balance of the Group’s short-term bonds increased by RMB1.510 billion compared with the opening balance to RMB1.510 billion. The Group’s total borrows at fixed interest rates are RMB3.54 billion.

Capital Expenditures

In the first half of 2022, the Group’s capital expenditure was RMB972 million. It was mainly used for the preliminary work and construction of raw silks (24,000 tons/year) and 48K large tow carbon fiber (12,000 ton/year) project and 100 ton high performance carbon fiber test plant.

In the second half of the year, the Group will continue to promote the raw silks (24,000 tons/year) and 48K large tow carbon fiber (12,000 tons/year) project, and 100 ton high performance carbon fiber test plant. The projects to be commenced will include compliance transformation project of control room of synthetic resin department and improvement transformation project of clean water and sewage separation of Shanghai Petrochemical. The planned capital expenditure of the Group can be financed from operating cash and bank credit.

Gearing Ratio

As of 30 June 2022, the Group’s gearing ratio was 31.58% (as of 30 June 2021: 36.65%). The gearing ratio was calculated as: total liabilities/total assets.

 

16


The Group’s Employees

As of 30 June 2022, the number of registered employees of the Group was 8,039, among which 4,921 were production personnel, 2,026 were sales, finance and other personnel, and 1,037 were administrative personnel. 61.38% of the Group’s employees were college graduates or above.

The Group determines the remuneration of its employees and directors on the basis of their position, performance, experience and current market pay trends. Other benefits include equity incentive plans and state-administered pension plans. The Group also provides professional and vocational training for its employees.

Income Tax

The Enterprise Income Tax Law of the PRC took effect from 1 January 2008, subsequent to which the income tax rate for enterprises was uniformly adjusted to 25%. As of the half year ended 30 June 2022, the income tax rate applicable to the Group is 25%.

Disclosure Required by the Hong Kong Listing Rules

Save as disclosed herein, pursuant to paragraph 40 of Appendix 16 to the Hong Kong Listing Rules, the Company confirms that there were no material differences between the existing information of the Company relating to the matters as set out in paragraph 32 of Appendix 16 to the Hong Kong Listing Rules and the relevant information disclosed in the Company’s 2021 annual report.

Market Outlook and Work Plans for the Second Half of the Year

Looking ahead to the second half of 2022, the risk of global economic stagflation will rise, and China’s economic growth is expected to rebound and remain within a reasonable range. As demand recovers and stabilization policies take effect, demand of automobiles, real estate and home appliances is expected to rise. It is expected that the demand for domestic refined oil and chemical products will recover, and the price pass-through of the petrochemical industrial chain will normalize. The overall outlook of the industry is positive. However, due to the increased uncertainty of the international oil price trend, the domestic refining and chemical production capacity is released in a concentrated manner, and the pressure on the Company’s efficiency will be further increased.

 

17


In the second half of the year, the Group will attach great importance to safety and environmental protection issues, be well prepared for the worst scenarios, implement all aspects of production recovery in a strict, detailed, scientific and orderly manner, devote every effort to reverse the passive situation of safety production, consolidate the Company’s high-quality development foundation, and focus on the following four aspects.

 

  1.

Focus on the restore production and strive to keep the production running smoothly. Deeply learn the lessons of the “6 • 18” accident, pay attention to the implementation of the HSE management system, strictly implement the HSE responsibilities of all employees, strengthen the implementation of safety production measures, pay attention to the restorative maintenance of the unit, implement the commencement plan in stages, and steadily implement all tasks for the recovery of production to ensure the safe and stable operation of the unit. The Group will continue to improve the ability of environmental protection facilities to prevent impact and high standard emissions, put an end to excessive emissions and pollution incidents, and firmly adhere to the bottom line of safe and green development.

 

  2.

Focus on the “three basics” management and strive to build a solid foundation for development. The Group will pay close attention to basic construction, basic work and basic skills training, persist in concentrating energy and strength at the basic level, fully implement the focus of “three basics” work at the “three basics” level, and promote the improvement of basic management work. The Group will strengthen special projects, organically integrate them with professional management and “three basics” work, establish a responsibility system of joint management, and form a working force. The Group will carry out the construction of intelligent change management system to improve the “three basics” management level intelligently.

 

18


  3.

Focus on dynamic optimization and strive to ensure the improvement of operating efficiency. The Group will resolutely overcome the adverse effects of the “6·18” accident. On the basis of ensuring the smooth start-up and smooth operation of the unit, The Group will track the market dynamics, optimize the procurement strategy, the product structure, the production and marketing connection, and strive to improve the operating efficiency. The Group will deepen the integration of industry and finance, continue to carry out budget management such as rolling prediction of marginal benefits of the product chain, analysis of all factors of production and operation, target control of all staff costs, and internal market simulation, and strictly control costs.

 

  4.

Focus on reform and innovation, and strive to promote the high-quality development of the Company. The Group will consolidate the results of the three-year action to deepen reform and constantly enhance the effectiveness of reform in promoting development. In depth implementation of the Company’s continuous benchmarking management improvement plan to achieve normalization of benchmarking improvement. The Group will accelerate the process of tackling key problems of carbon fiber and its composites, promote the safety and environmental protection data governance project, promote the Company’s digital transformation, and give play to the effectiveness of scientific and technological innovation. The Group will strengthen the project construction management to ensure that the large tow carbon fiber project (phase I) is completed and put into operation with high quality, and the 100 ton high-performance carbon fiber test device project is handed over. The Group will accelerate the construction of new energy projects such as photovoltaic.

 

19


3.2

Analysis of the Company’s Principal Performance during the Reporting Period (Certain of the following financial data is extracted from the unaudited interim report prepared under CAS)

 

  3.2.1

Analysis of Changes in the Company’s Related Financial Data

Unit: RMB’ 000

 

Item

  

For the six months

ended 30 June

     Change
(%)
    

Reason for change

   2022      2021  

Operating Costs

     39,118,453        28,849,768        35.59      The rise of unit price of crude oil and purchased coal led to the rise of raw material cost and power cost.

Investment income (“-” for losses)

     -50,675        602,510        -108.41      The operating loss of the associated company resulted in investment losses.

Impairment losses of assets

     -177,777        -80,093        121.96      The increase of inventory provision resulted from the gross profit margin of chemical products decreased.

Gains from asset disposals (“-” for losses)

     -1,062        79,085        -101.34      Gains from disposal of fixed assets decreased.

Income tax (benefits) / expenses

     -11,780        261,344        -104.51      The Company made losses resulted in income tax benefits

Net (loss) / profit attributable to shareholders of the Company

     -436,009        1,244,189        -135.04      In the Reporting Period, the price rise of petrochemical products was less than that of crude oil, resulting in operating losses.

Other comprehensive income, net of tax

     273,513        52,431        421.66      Price rise of crude oil led to increase of gains in fair value of commodity swap contracts applied hedge accounting.

Net cash used in operating activities

     -6,405,122        -2,389,552        168.05      The cash paid for purchasing goods and receiving services and the taxes paid in the current period increased compared with the same period last year.

Net cash flows generated from / (used in) investing activities

     1,776,708        -3,106,358        -157.20      The net investment and recovery of time deposits and structured deposits in the current period increased compared with the same period of last year, and the dividends received from joint ventures in the current period increased compared with the same period of last year.

Net cash flows generated from / (used in) financing activities

     1,946,321        -51,020        -3,914.82      The net cash flow generated by borrows and short-term bonds obtained and repaid by the Group during the Reporting Period increased compared with the same period last year.

 

20


  3.2.2

Analysis of Business Operations by Industry, Product or Geographical Location Segment

 

  (1)

Principal Operations by Industry or Product

Unit: RMB’ 000

 

Business Segment/Product Segment

   Revenue      Cost
of sales
     Gross
profit
margin
(%)
     Increase/
decrease in
revenue
compared to
corresponding
period of the
previous

year (%)
     Increase/
decrease in
cost of sales
compared to
corresponding
period of the
previous year
(%)
     Increase/
decrease in gross
profit margin
compared

to last year
(percentage
point)
 

Synthetic fibers

     230,723        388,301        -68.30        -68.46        -55.14       

Decrease 49.96
percentage
points
 
 
 

Resins and plastics

     4,314,408        4,345,070        -0.71        -7.71        9.10       

Decrease 15.51
percentage
points
 
 
 

Intermediate petrochemicals

     6,432,577        6,361,481        1.11        66.81        87.25       

Decrease 10.80
percentage
points
 
 
 

Petroleum products

     27,517,541        20,704,410        24.76        22.76        35.63       

Decrease 7.14
percentage
points
 
 
 

Trading of petrochemical products

     6,955,959        6,898,958        0.82        37.82        38.67       

Decrease 0.61
percentage
points
 
 
 

Others

     260,149        296,886        -14.12        26.46        27.91       

Decrease 1.29
percentage
points
 
 
 

 

Note:

This gross profit margin is calculated according to the price of petroleum products which includes consumption tax. Gross profit margin of petroleum products after consumption tax was 7.95%.

 

(2)

Revenue by Geographical Location

Unit: RMB’ 000

 

Geographical

location segment

   Revenue      Increase/decrease
in revenue
as compared to
the same period
last year (%)
 

Eastern China

     40,160,926        24.21

Other regions in the PRC

     527,859        -15.18

Exports

     5,022,572        26.29

 

21


  3.2.3

Analysis of Assets and Liabilities

Unit: RMB’ 000

 

Item

   As at 30 June
2022
     As at 31 December
2021
     Change of
amount
on 30
June

2021
compared
to 31
December
2021 (%)
    

Main reason for change

   Amount      % of
total
assets
     Amount      % of
total
assets
 

Derivative financial assets

     240,953        0.57        81,405        0.17        195.99      The fair value at the end of the period of the commodity swap contract applied hedge accounting increased.

Financial assets at fair value through profit or loss

     1,009,300        2.38        —          —          —        The balance of structured deposits increased.

Other receivables

     192,186        0.45        108,728        0.23        76.76      The export increased during the Reporting Period, and the export tax refund receivable increased; Receivables related to hedging instruments increased.

Other current assets

     582,136        1.37        17,329        0.04        3,259.32      The value-added tax to be deducted increased significantly.

Right-of-use assets

     20,697        0.05        4,879        0.01        324.21      New lease contracts were added in the current period, resulting in an increase in the right-of-use assets - houses and buildings.

Derivative financial liabilities

     —          —          23,804        0.05        -100.00      As of the end of the current period, all derivative financial liabilities have been settled.

Bills payable

     152,564        0.36        830,006        1.76        -81.62      Bills payable matured in the current period.

Employee benefits payable

     552,062        1.30        260,096        0.55        112.25      The employee benefits payable of the Reporting Period increased.

Taxes payable

     79,705        0.19        4,070,663        8.65        -98.04      Taxes paid in the current period.

Other payables

     2,590,054        6.10        1,287,064        2.74        101.24      At the end of the period, the dividend payable increased by RMB1.082 billion.

Other current liabilities

     2,789,182        6.57        1,441,320        3.06        93.52      The balance of short-term bonds increased by RMB1.510 billion.

Lease liabilities

     10,350        0.02        1,384        0.01        647.83      With the increase of the leased right-of-use assets in the current period, the lease liabilities also increased accordingly.

Other comprehensive income

     181,121        0.43        59,425        0.13        204.79      Price rise of crude oil led to increase of gains in fair value of commodity swap contracts applied hedge accounting.

As of the end of the Reporting Period, there was no case where the Company’s main assets were sealed up, seized, frozen, mortgaged or pledged, and there was no case or arrangement where the possession, use, income and disposal rights of main assets were subject to other restrictions.

 

22


  Overseas

assets

During the Reporting Period, the Group’s overseas assets were RMB15,758 thousand, accounting for 0.04% of the total assets.

 

23


  3.2.4

Analysis of Core Competitiveness

As one of the major integrated petrochemical enterprises in China with an integrated refinery and petrochemical capacity, the Company possesses competitive business scale and strength, which made it a major manufacturer of refined oil, intermediate petrochemicals, synthetic resins and synthetic fibers in China. The Company also has self-owned utilities and environmental protection systems, as well as sea transport, inland shipping, rail transport and road transport ancillary facilities.

The Company’s major competitive advantages include quality, geographical location and its vertically integrated production. The Company has 50 years of petrochemical production and management experience, and has accumulated extensive resources in the petrochemical industry. The Company has won several quality product awards from the central and local governments. Located at the core region of Yangtze River Delta, the most economically active region in China with a strong demand for petrochemical products, the Company has built a comprehensive logistics system and supporting facilities with close geographic proximity with most of its clients which enables the Company to enjoy the convenience of coastal and inland shipping. This gives the Company a competitive edge in terms of transportation costs and timely delivery. The Company has leveraged its advantages in integrated refinery and petrochemical capacity to actively strengthen product structure, while continuously improving products quality and variety. The Company has also improved production technology and boosted capacity of key upstream units to maximize the use and the efficiency in the utilization of its corporate resources, and is therefore able to achieve strong and sustainable development.

 

3.3

Analysis of Investments

 

  3.3.1

Entrusted Wealth Managements and Entrusted Loans

(1) Entrusted Wealth Management

The Company did not engage in entrusted wealth management during the Reporting Period.

(2) Entrusted Loans

During the Reporting Period, the Company provided entrusted loans to Shanghai Jinshan Baling New Material Co., Ltd. (“Baling New Materials”) through Sinopec Finance Co., Ltd., with a total loan amount of RMB300 million, which was used for styrene thermoplastic elastomer project. The loan term is 6 months and the annual interest rate is 3.80%. During the six months ended June 30 2022, the entrusted loan of RMB150 million has been issued.

 

24


  3.3.2

Projects funded by Fund Raising Capital

 

    

During the Reporting Period, the Company did not raise funds, nor has it used the funds raised from the previous reporting periods.

 

  3.3.3

Analysis of the Companies in which the Company has Controlling Interests or Investment Interests

 

  As

at 30 June 2022, the Company had more than 50% equity interest in the following principal subsidiaries:

 

Company name

   Place of
registration
   Principal activities    Place for
principal
activities
   Type of legal
person
   Percentage of
equity held by
the Company
(%)
     Percentage
of equity
held by the
Group
(%)
     Registered capital
(RMB’ 000)
     Net
profit/(loss) for
the year 2022
(RMB’ 000)
 

Shanghai Petrochemical Investment Development Company Limited (“Shanghai Investment Development”)

   China    Investment
management
   China    Limited
company
     100.00        100.00        RMB2,100,000        61  

China Jinshan Associated Trading Corporation (Jinshan Associated Trading)

   China    Import and
export of
petrochemical
products
and
equipment
   China    Limited
company
     67.33        67.33        RMB25,000        13,351  

Shanghai Jinchang Engineering Plastics Company Limited (“Shanghai Jinchang”)

   China    Production of
polypropylene
compound
products
   China    Limited
company
     —          74.25        USD9,154        (12,977

Shanghai Golden Phillips Petrochemical Company Limited (“Shanghai Golden Phillips”)

   China    Production of
polypropylene
products
   China    Limited
company
     —          100.00        RMB415,623        (11,301

Shanghai Jinshan Trading Corporation (“JMGJ”)

   China    Import and
export of
petrochemical
products
and
equipment
   China    Limited
company
     —          67.33        RMB100,000        12,757  

Zhejiang Jinlian Petrochemical Storage and Transportation Co., Ltd. (“Jinlian”)

   China    Trading of
Petrochemical
Products
   China    Limited
company
     —          100.00        RMB400,000        (6,975

Note: None of the subsidiaries have issued any debt securities.

The Group’s share of interests in associates comprises a 38.26% interest in the Shanghai Chemical Industry Park Development Co., Ltd (“Chemical Industrial Park”) established in the PRC in the amount of RMB2,085.3 million, and a 20% interest in the Shanghai SECCO Petrochemical Company Limited (“Shanghai SECCO”) established in the PRC in the amount of RMB587.2 million. The principal businesses of the Chemical Industry Park include the planning, development and operation of a chemical industrial park located in Shanghai of the PRC. The principal business of the Shanghai SECCO is the production and distribution of petrochemical products.

 

25


  (1)

Explanation of profits of major controlling companies and investing companies affecting more than 10% of the net profit of the Group

In the first half of 2022, Shanghai SECCO recorded a revenue of RMB12.9273 billion, and its loss after tax reached RMB663.0 million, among which RMB132.6 million was attributed to the Company.

In the first half of 2022, Chemical Industrial Park recorded a revenue of RMB815.9 million, and its profit after tax reached RMB247.5 million, among which RMB84.3 million was attributed to the Company.

 

  (2)

Analysis of operational performance of major controlling companies and investing companies with a 30% or more year-on-year change

 

  (a)

In the first half of 2022, the operating results of Shanghai Investment Development decreased by 99.95% year on year, which was mainly due to the decrease of investment income in the current period, resulting in a decrease in the operating profit in the first half of 2022.

 

  (b)

In the first half of 2022, the operating results of Shanghai Jinchang decreased by 71.45% year on year which was primarily due to the increase in price of the raw materials required by Shanghai Jinchang. This resulted in a decrease in operating results for the first half of 2022.

 

  (c)

In the first half of 2022, the operating results of Shanghai Golden Phillips has seen a decrease of 182.37% year on year, which was mainly due to the increase in price of raw materials required by Shanghai Golden Phillips. This resulted in a decrease in operating results for the first half of 2022.

 

  (d)

In the first half of 2022, the operating results of JMGJ has seen an increase of 88.76% year on year, which was mainly due to the increase in export sales in the current period. This resulted in an increase in operating results for the first half of 2022.

 

26


  3.3.4

Projects funded by Non-fund Raising Capital

Unit: RMB’ 000

 

Major Project

   Estimated total
project investment
     Project investment
in the Reporting Period
     Status as at
30 June 2022
 

Shanghai Jinshan Baling New Material Co., Ltd.

     400,000        50,000       
Paid in RMB100
million
 
 

Shanghai Shidian Energy Co., Ltd.

     400,000        80,000       
Paid in RMB400
million
 
 

Sinopec Shanghai 24000 T/A precursor fiber and 12000 T/a 48K large tow carbon fiber project

     3,489,638        604,470       

Under

construction

 

 

100 ton high performance carbon fiber test plant

     566,183        54,026       

Under

construction

 

 

Controlling room project of 1#, 2#, 3#, 4# refining combined unit of oil refining department

     97,689        37,862       

Under

construction

 

 

Sinopec Shanghai test line project of aviation carbon fibre reinforced thermoplastic composite material

     87,682        15,458       

Under

construction

 

 

Rectification project of hidden danger in central control room of olefin Department

     44,298        16,152       

Under

construction

 

 

Oil refining department upgrading project of high pressure air cooling materials for medium pressure hydrocracking unit

     32,829        15,941       

Under

construction

 

 

 

27


3.4

Plan for Profit Distribution or Capital Reserves Capitalization

 

  3.4.1

Implementation of or Amendment to Profit Distribution Plan during the Reporting Period

 

    

The 2021 Profit Distribution Plan was considered and approved at the 2021 Annual General Meeting held on 22 June 2022 to distribute a dividend of RMB0.1 per share (including tax) totaling RMB1,082,381,350 based on the total issued share of 10,823,813,500 as at dividend payout date. The relevant announcement was published in Shanghai Securities News, China Securities Journal and Securities Times on 23 June 2022 and was uploaded to the websites of the Hong Kong Stock Exchange and Shanghai Stock Exchange on 22 June 2022. The Final Dividend was distributed on or around Thursday, 28 July 2022 to shareholders whose names appear on the register of members of the Company’s H shares at the close of business on Tuesday, 5 July 2022. On 20 July 2022, the Company published an announcement on the implementation of profit distribution for A shares for the year 2021. The record date for A shares dividend payment was 27 July 2022 and the ex-dividend date was 28 July 2022. The dividend payment date for A shares was 28 July 2022. The Profit Distribution Plan was implemented as scheduled.

 

  3.4.2

Plan for Profit Distribution or Capital Reserves Capitalization during the Reporting Period

 

    

Nil.

 

28


4.

OTHER MATTERS

 

4.1

Corporate Governance

The Company acted in strict compliance with regulatory legislations such as the PRC Company Law, the PRC Securities Law, the Corporate Governance Principles for Listed Companies and the Guidelines for Establishing the Independent Directors System for Listed Companies issued by the CSRC, as well as the relevant requirements of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the New York Stock Exchange to push forward the innovation of the Company’s system and management, to improve the corporate governance structure, and to strengthen the establishment of the Company’s system in order to enhance the overall image of the Company.

 

4.2

Audit Committee

On 24 August 2022, the Audit Committee of the Tenth Session of the Board held its eleventh meeting, primarily to review the financial report of the Group for the Reporting Period, and discussed matters relating to the risk management, internal control and financial reporting.

 

4.3

Purchase, Sale and Redemption of the Company’s Securities

During the Reporting Period, the Company did not purchase, sell or redeem any of the Company’s securities (for the definition of “securities”, please refer to paragraph 1 of Appendix 16 to the Hong Kong Listing Rules).

 

4.4

Compliance with Corporate Governance Code

During the Reporting Period, the Company applied and complied with all code provisions as set out in the Corporate Governance Code contained in Appendix 14 to the Hong Kong Listing Rules.

 

4.5

Compliance with Model Code for Securities Transactions

The Company has adopted and implemented the Model Code for Securities Transactions to regulate the securities transactions of the Directors and Supervisors of the Company. After making specific enquiries with all Directors and Supervisors of the Company and having obtained written confirmations from each Director and Supervisor, the Company is not aware of any incident of non-compliance with the Model Code for Securities Transactions by the Directors and Supervisors of the Company during the Reporting Period.

The Model Code for Securities Transactions is also applicable to the senior management who may be in possession of unpublished inside information of the Company. The Company is not aware of any incident of non-compliance with the Model Code for Securities Transactions by the senior management of the Company.

 

29


5.

INTERIM FINANCIAL STATEMENTS

 

5.1

Interim financial statements prepared under China Accounting Standard for Business Enterprise

CONSOLIDATED AND COMPANY BALANCE SHEETS

AS AT 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     30 June 2022
(unaudited)
     31 December
2021
     30 June 2022
(unaudited)
     31 December
2021
 
     Consolidated      Consolidated      Company      Company  

ASSETS

           

Current Assets

           

Cash at bank and on hand

     6,668,215        12,498,617        6,282,196        12,314,124  

Derivative Financial assets

     240,953        81,405        240,953        81,405  

Financial assets at fair value through profit or loss

     1,009,300        —          1,009,300        —    

Accounts receivable

     737,098        1,169,405        441,274        1,014,787  

Receivables under financing

     680,269        1,072,690        157,249        624,584  

Prepayments

     43,117        60,577        37,178        42,024  

Other receivables

     192,186        108,728        143,834        69,053  

Inventories

     6,547,699        5,923,525        6,245,392        5,726,264  

Other current asset

     582,136        17,329        559,051        4,009  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Current Assets

     16,700,973        20,932,276        15,116,427        19,876,250  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-Current Assets

           

Long-term equity investments

     3,691,515        4,188,888        4,915,783        5,492,265  

Investments in other equity instruments

     5,000        5,000        —          —    

Investment properties

     344,525        352,188        373,343        381,540  

Fixed assets

     10,814,793        11,328,065        10,446,222        10,933,023  

Construction in progress

     4,040,406        3,293,177        3,939,223        3,201,111  

Right-of-use assets

     20,697        4,879        18,893        2,205  

Intangible assets

     382,624        392,608        267,576        273,719  

Long-term deferred expenses

     785,681        775,963        779,918        769,492  

Deferred tax assets

     209,195        184,143        199,935        178,084  

Other non-current assets

     5,485,703        5,581,435        5,232,014        5,381,149  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Non-Current Assets

     25,780,139        26,106,346        26,172,907        26,612,588  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

     42,481,112        47,038,622        41,289,334        46,488,838  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

30


CONSOLIDATED AND COMPANY BALANCE SHEETS (CONTINUED)

AS AT 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     30 June 2022
(unaudited)
     31 December
2021
     30 June 2022
(unaudited)
     31 December
2021
 
     Consolidated      Consolidated      Company      Company  

Liabilities and shareholders’ equity

           

Current Liabilities

           

Short-term loans

     2,040,000        1,540,000        2,000,000        1,500,000  

Derivative financial liabilities

     —          23,804        —          23,804  

Bills payable

     152,564        830,006        75,370        720,513  

Accounts payable

     4,005,985        5,888,879        2,806,121        5,198,489  

Contract liabilities

     375,012        430,882        295,080        383,624  

Employee benefits payable

     552,062        260,096        529,603        253,800  

Taxes payable

     79,705        4,070,663        62,116        4,043,002  

Other payables

     2,590,054        1,287,064        3,629,769        2,499,313  

Non-current liabilities due within one year

     29,494        23,029        9,174        1,604  

Other current liabilities

     2,789,182        1,441,320        2,782,804        1,438,157  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Current Liabilities

     12,614,058        15,795,743        12,190,037        16,062,306  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-Current Liabilities

           

Long-term loans

     700,000        700,000        700,000        700,000  

Lease liabilities

     10,350        1,384        9,612        399  

Deferred income

     119,920        112,720        119,920        112,720  

Defer tax liabilities

     31,947        33,344        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Non-Current Liabilities

     862,217        847,448        829,532        813,119  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

     13,476,275        16,643,191        13,019,569        16,875,425  
  

 

 

    

 

 

    

 

 

    

 

 

 

Shareholders’ equity

           

Share capital

     10,823,814        10,823,814        10,823,814        10,823,814  

Capital reserve

     614,187        610,327        604,628        600,768  

Other comprehensive income

     181,121        59,425        181,121        59,425  

Specific reserve

     224,998        216,512        224,830        216,508  

Surplus reserve

     6,672,639        6,672,639        6,672,639        6,672,639  

Retained earnings

     10,359,065        11,877,455        9,762,733        11,240,259  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total equity attributable to shareholders of the Company

     28,875,824        30,260,172        28,269,765        29,613,413  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-controlling interests

     129,013        135,259        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Shareholders’ Equity

     29,004,837        30,395,431        28,269,765        29,613,413  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities and Shareholders’ Equity

     42,481,112        47,038,622        41,289,334        46,488,838  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

31


CONSOLIDATED AND COMPANY INCOME STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     Six months ended 30 June     Six months ended 30 June  
     2022     2021     2022     2021  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Items    Consolidated     Consolidated     Company     Company  

I. Operating income

     45,900,355       37,136,606       39,106,248       31,978,683  

Less: Operating costs

     39,118,453       28,849,768       32,381,777       23,808,137  

Taxes and surcharges

     5,717,033       5,453,022       5,710,416       5,446,828  

Selling and distribution expenses

     171,259       206,782       127,442       164,841  

General and administrative expenses

     1,347,594       1,905,002       1,292,155       1,848,744  

Research and development expenses

     36,426       27,943       32,725       22,860  

Finance expenses (“-“ for income)

     (295,996     (206,583     (271,812     (203,124

Including: interest expense

     50,043       38,299       48,935       37,149  

interest income

     329,305       248,813       320,891       240,798  

Add: Other income

     5,905       6,412       4,524       6,263  

Investment income (“-”for losses)

     (50,675     602,510       (46,913     556,932  

Including: Income from investment in associates and joint ventures (“-” for losses)

     (32,537     582,548       (53,346     539,533  

Gains from changes in fair value

     313       23,343       313       19,151  
  

 

 

   

 

 

   

 

 

   

 

 

 

Credit losses (“-” for losses)

     (4,887     —         (4,877     —    

Impairment losses of assets (“-” for losses)

     (177,777     (80,093     (177,777     (80,093

Gains from asset disposals (“-” for losses)

     (1,062     79,085       —         79,085  
  

 

 

   

 

 

   

 

 

   

 

 

 

II. Operating profit (“-” for loss)

     (422,597     1,531,929       (391,185     1,471,735  
  

 

 

   

 

 

   

 

 

   

 

 

 

Add: Non-operating income

     11,594       6,660       11,594       6,436  

Less: Non-operating expenses

     31,598       27,876       31,510       27,186  

III. Profit before income tax (“-” for loss)

     (442,601     1,510,713       (411,101     1,450,985  
  

 

 

   

 

 

   

 

 

   

 

 

 

Less: Income tax expenses

     (11,780     261,344       (15,956     251,634  

IV. Net profit (“-” for net loss)

     (430,821     1,249,369       (395,145     1,199,351  
  

 

 

   

 

 

   

 

 

   

 

 

 

(1) Net profit classified by continuity of operations (“-” for net loss)

        

1. Net profit from continuing operations (“-” for net loss)

     (430,821     1,249,369       (395,145     1,199,351  

2. Net profit from discontinued operations (“-” for net loss)

     —         —         —         —    

(2) Net profit classified by ownership (“-” for net loss):

        

1. Shareholders of the Company (“-” for net loss)

     (436,009     1,244,189       —         —    

2. Non-controlling interests (“-” for net loss)

     5,188       5,180       —         —    

 

32


CONSOLIDATED AND COMPANY INCOME STATEMENTS (CONTINUED)

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     Six months ended 30 June      Six months ended 30 June  
     2022     2021      2022     2021  
     (unaudited)     (unaudited)      (unaudited)     (unaudited)  
Items    Consolidated     Consolidated      Company     Company  

V. Other comprehensive income, net of tax

     273,513       52,431        273,513       52,431  
  

 

 

   

 

 

    

 

 

   

 

 

 

(1) Other comprehensive income (net of tax) attributable to shareholders of the Company

     273,513       52,431        273,513       52,431  

Items that may be reclassified to profit or loss

     273,513       52,431        273,513       52,431  

a. Other comprehensive income recognised under equity method

     (22,558     702        (22,558     702  

b. Cash flow hedge reserve

     296,071       51,729        296,071       51,729  

(2) Other comprehensive income (net of tax) attributable to non-controlling interests

     —         —          —         —    

VI. Total comprehensive income

     (157,308     1,301,800        (121,632     1,251,782  
  

 

 

   

 

 

    

 

 

   

 

 

 

(1) Attributable to shareholders of the Company

     (162,496     1,296,620        —         —    

(2) Attributable to non-controlling interests

     5,188       5,180        —         —    
  

 

 

   

 

 

    

 

 

   

 

 

 

VII. (Losses)/Earnings per share

         

(1) Basic (losses)/earnings per share (RMB Yuan)

     (0.040     0.115        —         —    

(2) Diluted (losses)/earnings per share (RMB Yuan)

     (0.040     0.115        —         —    
  

 

 

   

 

 

    

 

 

   

 

 

 

 

33


CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     Six months ended 30 June     Six months ended 30 June  
     2022     2021     2022     2021  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Items    Consolidated     Consolidated     Company     Company  

I. Cash flows from operating activities

        

Proceeds from sales of goods and rendering of services

     50,088,166       38,434,207       43,170,120       33,292,256  

Refund of taxes

     432,955       57,673       289,064       —    

Proceeds from other operating activities

     111,725       114,183       108,602       107,181  
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash inflows

     50,632,846       38,606,063       43,567,786       33,399,437  
  

 

 

   

 

 

   

 

 

   

 

 

 

Payment for goods and services

     (45,620,035     (31,630,427     (38,852,353     (26,320,863

Payment to and for employees

     (1,526,165     (1,381,271     (1,443,976     (1,300,205

Payment of various taxes

     (9,728,629     (7,824,819     (9,693,475     (7,764,804

Payment for other operating activities

     (163,139     (159,098     (299,371     (139,895
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash outflows

     (57,037,968     (40,995,615     (50,289,175     (35,525,767
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows used in operating activities

     (6,405,122     (2,389,552     (6,721,389     (2,126,330
  

 

 

   

 

 

   

 

 

   

 

 

 

II. Cash flows from investing activities

        

Cash received from structured deposits

     —         2,700,000       —         2,200,000  

Cash received from returns on investments

     584,002       54,893       561,947       —    

Net cash received from disposal of fixed assets and intangible assets

     8,882       46,860       8,877       46,576  

Proceeds from other investing activities

     6,168,238       3,235,749       6,164,397       3,226,832  
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash inflows

     6,761,122       6,037,502       6,735,221       5,473,408  
  

 

 

   

 

 

   

 

 

   

 

 

 

Payment for acquisition of fixed assets and other long-term assets

     (1,048,727     (1,493,860     (1,037,357     (1,475,605

Payment of structured deposits

     (1,000,000     (6,650,000     (1,000,000     (5,500,000

Payment for establishing of a subsidiary and an associate

     (130,000     —         (50,000     —    

Payment for other investing activities

     (2,805,687     (1,000,000     (2,750,827     (800,000
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash outflows

     (4,984,414     (9,143,860     (4,838,184     (7,775,605
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows generated from / (used in) investing activities

     1,776,708       (3,106,358     1,897,037       (2,302,197
  

 

 

   

 

 

   

 

 

   

 

 

 

 

34


CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS (CONTINUED)

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

     Six months ended 30 June     Six months ended 30 June  
     2022     2021     2022     2021  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Items    Consolidated     Consolidated     Company     Company  

III. Cash flows from financing activities

        

Proceeds from borrowings

     9,455,000       11,879,423       9,435,000       11,839,423  

Proceeds from short-term bonds

     3,000,000       —         3,000,000       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash inflows

     12,455,000       11,879,423       12,435,000       11,839,423  
  

 

 

   

 

 

   

 

 

   

 

 

 

Repayments of borrowings

     (8,955,200     (11,867,423     (8,935,000     (11,839,423
  

 

 

   

 

 

   

 

 

   

 

 

 

Repayments of short-term bonds

     (1,500,000     —         (1,500,000     —    

Payment for dividends, profit distributions or interest

     (50,488     (53,489     (49,419     (52,429

Payment for other financing activities

     (2,991     (9,531     (1,115     (6,879
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total of cash outflows

     (10,508,679     (11,930,443     (10,485,534     (11,898,731
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash flows generated from / (used in) financing activities

     1,946,321       (51,020     1,949,466       (59,308
  

 

 

   

 

 

   

 

 

   

 

 

 

IV. Effect of foreign exchange rate changes on cash and cash equivalents

     8,733       (2,063     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

V. Net increase in cash and cash equivalents (“-” for decrease)

     (2,673,360     (5,548,993     (2,874,886     (4,487,835

Add: Cash and cash equivalents at beginning of the period

     5,112,010       6,916,408       4,927,519       5,460,067  
  

 

 

   

 

 

   

 

 

   

 

 

 

VI. Cash and cash equivalents at end of the period

     2,438,650       1,367,415       2,052,633       972,232  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

35


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

Items    Attributable to equity shareholders of the Company                    
   Share
capital
     Capital
surplus
     Other
comprehensive
income
    Specific
reserve
    Surplus
reserve
     Undistributed
profits
    Sub-total     Non-
controlling
interests
    Total
equity
 

Balance at 1 January 2022

     10,823,814        610,327        59,425       216,512       6,672,639        11,877,455       30,260,172       135,259       30,395,431  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Changes in equity for the six months ended 30 June 2022 (unaudited) (“-” for decreases)

                     

Total comprehensive income

                     

Net profit (“-” for net loss)

     —          —          —         —         —          (436,009     (436,009     5,188       (430,821

Other comprehensive income

     —          —          273,513       —         —          —         273,513       —         273,513  

Amounts transferred from hedging reserve to initial carrying amount of hedged items

           (151,817     —         —          —         (151,817     —         (151,817

Appropriation of profits

                     

Distributions to shareholders

     —          —          —         —         —          (1,082,381     (1,082,381     (11,434     (1,093,815

Specific reserve

                     

Accrued

     —          —          —         68,912       —          —         68,912       —         68,912  

Utilized

     —          —          —         (60,426     —          —         (60,426     —         (60,426

Others

        3,860        —         —         —          —         3,860       —         3,860  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 30 June 2022 (unaudited)

     10,823,814        614,187        181,121       224,998       6,672,639        10,359,065       28,875,824       129,013       29,004,837  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 1 January 2021

     10,823,814        610,327        6,326       145,597       6,474,103        11,157,866       29,218,033       136,985       29,355,018  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Changes in equity for the six months ended 30 June 2021 (unaudited) (“-” for decreases)

                     

Total comprehensive income

                     

Net profit

     —          —          —         —         —          1,244,189       1,244,189       5,180       1,249,369  

Other comprehensive income

     —          —          52,431       —         —          —         52,431       —         52,431  

Appropriation of profits

                     

Distributions to Shareholders

     —          —          —         —         —          (1,082,381     (1,082,381     —         (1,082,381

Specific reserve

                     

Accrued

     —          —          —         54,842       —          —         54,842       —         54,842  

Utilized

     —          —          —         (23,574     —          —         (23,574     —         (23,574
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 30 June 2021 (unaudited)

     10,823,814        610,327        58,757       176,865       6,474,103        11,319,674       29,463,540       142,165       29,605,705  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

36


COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2022

(All amounts in thousands of Renminbi Yuan unless otherwise stated)

 

Items    Share
capital
     Capital
surplus
     Other
comprehensive
income
    Specific
reserve
    Surplus
reserve
     Undistributed
profits
    Total
equity
 

Balance at 1 January 2022

     10,823,814        600,768        59,425       216,508       6,672,639        11,240,259       29,613,413  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Changes in equity for the six months ended 30 June 2021 (unaudited) (“-” for decreases)

                 

Total comprehensive income

                 

Net profit (“-” for net loss)

     —          —          —         —         —          (395,145     (395,145

Other comprehensive income

     —          —          273,513       —         —          —         273,513  

Amounts transferred from hedging reserve to initial carrying amount of hedged items

           (151,817            (151,817

Appropriation of profits

                 

Distributions to shareholders

     —          —          —         —         —          (1,082,381     (1,082,381

Specific reserve

                 

Accrued

     —          —          —         65,279       —          —         65,279  

Utilized

     —          —          —         (56,957     —          —         (56,957

Others

        3,860                 3,860  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at 30 June 2022 (unaudited)

     10,823,814        604,628        181,121       224,830       6,672,639        9,762,733       28,269,765  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at 1 January 2021

     10,823,814        600,768        6,326       145,597       6,474,103        10,535,813       28,586,421  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Changes in equity for the six months ended 30 June 2021 (unaudited) (“-” for decreases)

                 

Total comprehensive income

                 

Net profit

     —          —          —         —         —          1,199,351       1,199,351  

Other comprehensive income

     —          —          52,431       —         —          —         52,431  

Appropriation of profits

                 

Distributions to shareholders

     —          —          —         —         —          (1,082,381     (1,082,381

Specific reserve

                 

Accrued

     —          —          —         51,600       —          —         51,600  

Utilized

     —          —          —         (20,332     —          —         (20,332
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Balance at 30 June 2021 (unaudited)

     10,823,814        600,768        58,757       176,865       6,474,103        10,652,783       28,787,090  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

37


5.2

Interim financial information prepared under International Financial Reporting Standard (Unaudited)

Consolidated statement of profit or loss for the six months ended 30 June 2022 - unaudited

(Expressed in Renminbi Yuan)

 

     Six months ended 30 June  
     2022     2021  
     RMB’000     RMB’000  

Revenue

     45,859,205       37,088,509  

Taxes and surcharges

     (5,717,033     (5,453,022
  

 

 

   

 

 

 

Net sales

     40,142,172       31,635,487  

Cost of sales

     (40,681,204     (30,831,925
  

 

 

   

 

 

 

Gross (loss) / profit

     (539,032     803,562  

Selling and administrative expenses

     (179,494     (209,674

Other operating income

     47,661       56,169  

Other operating expenses

     (9,448     (9,689

Other gains – net

     (4,522     104,556  
  

 

 

   

 

 

 

(Loss) / profit from operations

     (684,835     744,924  

Finance income

     329,305       248,813  

Finance expenses

     (50,043     (38,299
  

 

 

   

 

 

 

Finance income – net

     279,262       210,514  
  

 

 

   

 

 

 

Share of net (losses) / profits of associates and joint ventures accounted for using the equity method

     (27,537     587,548  
  

 

 

   

 

 

 

(Loss) / profit before taxation

     (433,110     1,542,986  

Income tax benefit / (expense)

     11,780       (261,344
  

 

 

   

 

 

 

(Loss) / profit for the period

     (421,330     1,281,642  
  

 

 

   

 

 

 

Attributable to:

    

– Equity shareholders of the Company

     (426,518     1,276,462  

Non-controlling interests

     5,188       5,180  
  

 

 

   

 

 

 
     (421,330)     1,281,642  
  

 

 

   

 

 

 

(Losses) /earnings per share

    

Basic

     RMB (0.039     RMB 0.118  

Diluted

     RMB (0.039     RMB 0.118  

 

38


Consolidated statement of profit or loss and other comprehensive income for the six months ended 30 June 2022 - unaudited

(Expressed in Renminbi Yuan)

 

     Six months ended 30 June  
     2022     2021  
     RMB’000     RMB’000  

(Loss) / profit for the period

     (421,330     1,281,642  
  

 

 

   

 

 

 

Other comprehensive income for the period (after tax and reclassification adjustments)

    

Items that are or may be reclassified subsequently to profit or loss

    

Share of other comprehensive income of associates accounted for using the equity method

     (22,558     702  

Cash flow hedges: net movement in hedging reserve

     296,071       51,729  
  

 

 

   

 

 

 

Other comprehensive income for the period

     273,513       52,431  
  

 

 

   

 

 

 

Total comprehensive income for the period

     (147,817     1,334,073  
  

 

 

   

 

 

 

Attributable to:

    

– Equity shareholders of the Company

     (153,005     1,328,893  

Non-controlling interests

     5,188       5,180  
  

 

 

   

 

 

 

Total comprehensive income for the period

     (147,817     1,334,073  
  

 

 

   

 

 

 

 

39


Consolidated statement of financial position at 30 June 2022 - unaudited

(Expressed in Renminbi Yuan)

 

     At 30 June
2022
    

At 31 December

2021

 
     RMB’000      RMB’000  

Non-current assets

     

Property, plant and equipment

     10,797,765        11,310,032  

Right-of-use assets

     392,939        385,643  

Investment property

     344,525        352,188  

Construction in progress

     4,040,406        3,293,177  

Investments accounted for using the equity method

     3,596,515        4,088,888  

Deferred tax assets

     209,195        184,143  

Financial assets at fair value through other comprehensive income

     5,000        5,000  

Time deposits with banks

     5,432,203        5,581,435  

Other non-current assets

     849,563        787,807  
  

 

 

    

 

 

 
     25,668,111        25,988,313  
  

 

 

    

 

 

 

Current assets

     

Derivative financial assets

     240,953        81,405  

Inventories

     6,547,699        5,923,525  

Trade receivables

     67,574        77,425  

Other receivables

     138,828        47,597  

Amounts due from related parties

     934,313        1,212,331  

Prepayments

     413,822        43,686  

Financial assets at fair value through other comprehensive income

     680,269        1,047,690  

Financial assets measured at fair value through profit or loss

     1,009,300        —    

Time deposits with banks

     4,229,565        7,386,607  

Cash and cash equivalents

     2,438,650        5,112,010  
  

 

 

    

 

 

 
     16,700,973        20,932,276  
  

 

 

    

 

 

 

 

40


Consolidated statement of financial position at 30 June 2022 - unaudited (continued)

(Expressed in Renminbi Yuan)

 

 

     At 30 June
2022
    

At 31 December

2021

 
     RMB’000      RMB’000  

Current liabilities

     

Trade and other payables

     3,832,648        3,095,694  

Contract liabilities

     371,143        424,607  

Amounts due to related parties

     4,154,686        6,304,816  

Staff salaries and welfares payable

     552,062        260,096  

Borrowings

     2,059,600        1,559,800  

Short-term bonds

     1,509,581        —    

Lease liabilities

     9,894        3,229  

Derivative financial liabilities

     —          23,804  

Income tax payable

     5,994        258,466  

Current tax liabilities

     118,450        3,865,231  
  

 

 

    

 

 

 
     12,614,058        15,795,743  
  

 

 

    

 

 

 

Net current assets

     4,086,915        5,136,533  
  

 

 

    

 

 

 

Total assets less current liabilities

     29,755,026        31,124,846  
  

 

 

    

 

 

 

Non-current liabilities

     

Borrowings

     700,000        700,000  

Lease liabilities

     10,350        1,384  

Deferred tax liabilities

     31,947        33,344  

Deferred income

     24,920        12,720  
  

 

 

    

 

 

 
     767,217        747,448  
  

 

 

    

 

 

 

NET ASSETS

     28,987,809        30,377,398  
  

 

 

    

 

 

 

 

41


Consolidated statement of financial position at 30 June 2022 - unaudited (continued)

(Expressed in Renminbi Yuan)

 

 

     At 30 June
2022
    

At 31 December

2021

 
     RMB’000      RMB’000  

CAPITAL AND RESERVES

     

Share capital

     10,823,814        10,823,814  

Reserves

     18,034,982        19,418,325  
  

 

 

    

 

 

 

Total equity attributable to equity shareholders of the Company

     28,858,796        30,242,139  

Non-controlling interests

     129,013        135,259  
  

 

 

    

 

 

 

TOTAL EQUITY

     28,987,809        30,377,398  
  

 

 

    

 

 

 

 

42


Consolidated statement of changes in equity

for the six months ended 30 June 2022 - unaudited

(Expressed in Renminbi Yuan)

 

     Attributable to equity shareholders of the Company              
    

Share

capital

    

Other

reserves

    Retained
earnings
    Total    

Non-

controlling

interests

    Total
equity
 
     RMB’000      RMB’000     RMB’000     RMB’000     RMB’000     RMB’000  

Balance at 1 January 2021

     10,823,814        4,446,339       13,927,837       29,197,990       136,985       29,334,975  

Changes in equity for the six months ended 30 June 2021:

             

Profit for the period

     —          —         1,276,462       1,276,462       5,180       1,281,642  

Other comprehensive income

     —          52,431       —         52,431       —         52,431  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     —          52,431       1,276,462       1,328,893       5,180       1,334,073  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transfer to other reserves

     —          2,300,272       (2,300,272     —         —         —    

Dividends proposed and approved

     —          —         (1,082,381     (1,082,381     —         (1,082,381

Appropriation of safety production fund

            31,268       (31,268     —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 30 June 2021 and 1 July 2021

     10,823,814        6,830,310       11,790,378       29,444,502       142,165       29,586,667  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Changes in equity for the six months ended 31 December 2021:

             

Profit for the period

     —          —         796,969       796,969       (2,005     794,964  

Other comprehensive income

     —          89,367       —         89,367       —         89,367  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     —          89,367       796,969       886,336       (2,005     884,331  

Transfer to other reserves

     —          198,536       (198,536     —         —         —    

Amounts transferred from hedging reserve to initial carrying amount of hedged items

     —          (88,699     —         (88,699     —         (88,699

Dividends paid by subsidiaries to non-controlling interests

     —          —         —         —         (4,901     (4,901

Appropriation of safety production fund

     —          9,461       (9,461     —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 31 December 2021

     10,823,814        7,038,975       12,379,350       30,242,139       135,259       30,377,398  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

43


Consolidated statement of changes in equity

for the six months ended 30 June 2022 – unaudited (continued)

(Expressed in Renminbi Yuan)

 

     Attributable to equity shareholders of the Company              
    

Share

capital

    

Other

reserves

    Retained
earnings
    Total    

Non-

controlling

interests

    Total
equity
 
     RMB’000      RMB’000     RMB’000     RMB’000     RMB’000     RMB’000  

Balance at 1 January 2022

     10,823,814        7,038,975       12,379,350       30,242,139       135,259       30,377,398  

Changes in equity for the six months ended 30 June 2022:

             

(Loss)/ profit for the period

     —          —         (426,518     (426,518     5,188       (421,330

Other comprehensive income

     —          273,513       —         273,513       —         273,513  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     —          273,513       (426,518     (153,005     5,188       (147,817
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amounts transferred from hedging reserve to initial carrying amount of hedged items

     —          (151,817     —         (151,817     —         (151,817

Dividends proposed and approved

     —          —         (1,082,381     (1,082,381     (11,434     (1,093,815

Appropriation of safety production fund

     —          38,672       (38,672     —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Others

     —          3,860       —         3,860       —         3,860  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at 30 June 2022

     10,823,814        7,203,203       10,831,779       28,858,796       129,013       28,987,809  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

44


Condensed consolidated cash flow statement

for the six months ended 30 June 2022 – unaudited

(Expressed in Renminbi Yuan)

 

     Six months ended 30 June  
     2022     2021  
     RMB’000     RMB’000  

Operating activities

    

Cash used in operations

     (6,035,723     (2,155,135

Interest paid

     (39,711     (53,828

Income tax paid

     (369,399     (234,417
  

 

 

   

 

 

 

Net cash used in operating activities

     (6,444,833     (2,443,380
  

 

 

   

 

 

 

Investing activities

    

Dividends received from joint ventures and associates

     576,138       55,044  

Interest received

     218,238       235,749  

Net proceeds from disposal of property, plant and equipment

     8,882       46,860  

Cash received from time deposits with maturity less than one year

     5,950,000       3,000,000  

Cash received from maturity of structured deposits

     —         2,700,000  

Cash payment for investment in structured deposits

     (1,000,000     (6,650,000

Cash payment for investment in time deposits

     (2,600,000     (1,000,000

Cash payment for investment in entrusted loans

     (150,000     —    

Cash payment for investment deposits

     (53,500     —    

Payment for the purchase of property, plant and equipment and other long-term assets

     (1,059,504     (1,493,860

Payment for investment in an associate and a joint venture

     (130,000     —    

Other cash flows arising from investing activities

     5,677       (151
  

 

 

   

 

 

 

Net cash generated from/(used in) investing activities

     1,765,931       (3,106,358
  

 

 

   

 

 

 

 

 

45


Condensed consolidated cash flow statement

for the six months ended 30 June 2022 – unaudited (continued)

(Expressed in Renminbi Yuan)

 

     Six months ended 30 June  
     2022     2021  
     RMB’000     RMB’000  

Financing activities

    

Proceeds from borrowings

     9,455,000       11,879,423  

Proceeds from short-term bonds

     3,000,000       —    

Repayments of borrowings

     (8,955,200     (11,867,423

Repayments of short-term bonds

     (1,500,000     —    

Principal elements of lease payments

     (2,991     (9,192
  

 

 

   

 

 

 

Net cash generated from financing activities

     1,996,809       2,808  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (2,682,093     (5,546,930

Cash and cash equivalents at 1 January

     5,112,010       6,916,408  

Effect of foreign exchange rates changes

     8,733       (2,063
  

 

 

   

 

 

 

Cash and cash equivalents at 30 June

     2,438,650       1,367,415  
  

 

 

   

 

 

 

 

46


Notes to the condensed unaudited interim financial report

(Expressed in Renminbi Yuan unless otherwise indicated)

 

1

General information and basis of preparation

Sinopec Shanghai Petrochemical Company Limited (the Company), located in Jinshan District of Shanghai, is one of the largest refining-chemical integrated petrochemical companies in China. It is one of the subsidiaries of China Petroleum & Chemical Corporation (“Sinopec Corp.”). The Company and its subsidiaries (“the Group”) are principally engaged in processing the crude oil into synthetic fibres, resins and plastics, intermediate petrochemical and petroleum products.

This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, adopted by the International Accounting Standards Board (“IASB”). It was authorized for issue on 25 August 2022.

The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2021 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2022 annual financial statements. Details of any changes in accounting policies are set out in note 2.

The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.

This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2021 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for a full set of financial statements prepared in accordance with International Financial Reporting Standards (“IFRSs”).

The interim financial report is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the Hong Kong Institute of Certified Public Accountants.

 

47


2

Changes in accounting policies

The Group has applied the following amendments to IFRSs issued by the IASB to this interim financial report for the current accounting period:

- Amendments to IAS 16, Property, plant and equipment: Proceeds before intended use

- Amendments to IAS 37, Provisions, contingent liabilities and contingent assets: Onerous contracts — cost of fulfilling a contract

None of these developments have had a material effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented in this interim financial report. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

 

3

Segment information and revenue

 

3.1

Segment information

The Group manages its business by divisions, which are organized by business lines. In view of the fact that the Company and its subsidiaries operate mainly in the PRC, no geographical segment information is presented.

In a manner consistent with the way in which information is reported internally to the Group’s chief operating decision maker, Board of Directors, for the purposes of resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been aggregated to form the following reportable segments.

The basis of segmentation and the basis of measurement of segment profits or losses, and assets and liabilities are consistent with those of the annual financial statements for the year ended 31 December 2021.

 

48


3

Segment information and revenue (continued)

 

3.1

Segment information (continued)

 

Six months

ended

30 June 2022

   Petroleum
products
    Intermediate
petrochemicals
    Trading of
petrochemical
product
    Resins and
plastics
    Synthetic
fibres
    Others     Total  
     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000  

Total segment revenue

     34,221,223       11,911,697       7,484,773       4,350,398       230,753       730,640       58,929,484  

Inter segment revenue

     (6,703,682     (5,479,120     (528,814     (35,990     (30     (322,643     (13,070,279
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenue from external customers

     27,517,541       6,432,577       6,955,959       4,314,408       230,723       407,997       45,859,205  

Timing of revenue recognition

              

At a point in time

     27,517,541       6,432,577       6,915,528       4,314,408       230,723       407,997       45,818,774  

Over time

     —       —       40,431       —       —       —       40,431  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     27,517,541       6,432,577       6,955,959       4,314,408       230,723       407,997       45,859,205  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment result – profit/(loss) from operations

     464,776       (556,193     19,821       (220,997     (320,684     (71,558     (684,835
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Impairment of plant and machinery

     —         —         —         —         —         —         —    

As at 30 June 2022

 

           

Segment assets

     13,099,536       4,021,519       1,680,894       1,288,776       2,135,243       2,345,589       24,571,557  

Segment liabilities

     3,798,267       1,008,218       1,309,209       1,226,642       549,547       38,952       7,930,835  

 

49


3

Segment information and revenue (continued)

 

3.1

Segment information (continued)

 

Six months ended

30 June 2021

   Petroleum
products
    Intermediate
petrochemicals
    Trading of
petrochemical
product
    Resins and
plastics
    Synthetic
fibres
    Others     Total  
     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000     RMB’000  

Total segment revenue

     26,212,341       9,267,436       5,893,808       4,731,109       781,301       667,721       47,553,716  

Inter segment revenue

     (3,796,123     (5,411,135     (846,683     (56,452     (49,850     (304,964     (10,465,207
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenue from external customers

     22,416,218       3,856,301       5,047,125       4,674,657       731,451       362,757       37,088,509  

Timing of revenue recognition

              

At a point in time

     22,416,218       3,856,301       5,036,097       4,674,657       731,451       362,757       37,077,481  

Over time

     —         —         11,028       —         —         —         11,028  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     22,416,218       3,856,301       5,047,125       4,674,657       731,451       362,757       37,088,509  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment result – profit/(loss) from operations

     942,353       (92,569     33,650       300,703       (374,788     (64,425     744,924  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Impairment of plant and machinery

     15,000       —         —         —         1,803       —         16,803  

As at 31 December 2021

 

           

Segment assets

     13,317,338       3,781,785       1,348,751       1,395,867       1,919,194       2,700,327       24,463,262  

Segment liabilities

     9,749,806       1,257,436       1,257,750       1,327,587       490,211       112,876       14,195,666  

 

50


     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Segment result – (loss)/profit from operations

     

Petroleum products

     464,776        942,353  

Intermediate petrochemicals

     (556,193      (92,569

Trading of petrochemical products

     19,821        33,650  

Resins and plastics

     (220,997      300,703  

Synthetic fibres

     (320,684      (374,788

Others

     (71,558      (64,425
  

 

 

    

 

 

 

Segment result – (loss)/profit from operations

     (684,835      744,924  
  

 

 

    

 

 

 

Finance income – net

     279,262        210,514  

Share of net (losses)/profits of associates and joint ventures accounted for using the equity method

     (27,537      587,548  
  

 

 

    

 

 

 

(Loss)/profit before income tax

     (433,110      1,542,986  
  

 

 

    

 

 

 

 

3

Segment information and revenue (continued)

 

3.2

Revenue

The Group’s revenue from external customers are substantially all within Mainland China for the six months ended 30 June 2022 and 2021. As at 30 June 2022 and 31 December 2021, assets are also substantially all within Mainland China.

Revenue of approximate RMB 29,555,589 thousand (six months ended 30 June 2021: RMB 25,082,208 thousand) are derived from a single customer. These revenues are attributable to the petroleum products and other segments.

 

51


4

(Loss) / profit before taxation

(Loss) / profit before taxation is arrived at after charging/(crediting):

 

  (a)

Finance income – net

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Interest income from time deposits with maturity more than 3 months

     261,964        202,251  

Interest income from time deposits with maturity less than 3 months

     62,652        40,451  

Others

     4,689        6,111  
  

 

 

    

 

 

 

Finance income

     329,305        248,813  
  

 

 

    

 

 

 

Interest and finance charges paid/payable for lease liabilities and financial liabilities not at fair value through profit or loss

     (60,820      (41,887

Less: interest expense capitalized into construction in progress

     10,777        3,588  
  

 

 

    

 

 

 

Finance expenses

     (50,043      (38,299
  

 

 

    

 

 

 

Finance income – net

     279,262        210,514  
  

 

 

    

 

 

 

 

  (b)

Other gains – net

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Gains from structured deposits (note i)

     9,300        45,552  

Net (losses)/gains on disposal of property, plant and equipment (note ii)

     (5,960      62,290  

Net gains/(losses) on foreign exchange option/forward contracts

     7,583        (151

Net losses on commodity swaps contracts not qualified for hedging accounting

     (35,188      —    

Net foreign exchange gains/ (losses)

     20,082        (1,039

Net losses on selling of financial assets at fair value through other comprehensive income (“FVOCI”)

     (2,187      (2,096

Net losses on disposal of inventory (note ii)

     (819      —    

Gains from entrusted loan receivable

     2,667        —    
  

 

 

    

 

 

 
     (4,522      104,556  
  

 

 

    

 

 

 

 

52


(i)

Gains from structured deposits

Structured deposits are financial products issued by banks, return of which are linked to the performance of the embedded index, like foreign exchange rate, interest rate and etc..

 

(ii)

The effect of “6.18” No.1 ethylene glycol plant explosion accident

On 18 June 2022, a fire broke out in No.1 ethylene glycol plant of the intermediate petrochemicals segment of the Company, causing a fire on surrounding individual pipelines. The main production facilities of the Group had been shut down after the fire occurred. Net losses due to the fire, including writing off of damaged fixed assets and inventories with amount of RMB7,676 thousand and RMB819 thousand respectively, have been recorded in the account other gains – net, and compensation to casualties amounting to RMB1,010 thousand have been recorded in the account other operating expenses (Six months ended 30 June 2021: Nil).

As of the date of this report, the cause of the accident is under investigation and the production facilities have resumed production.

 

53


  (c)

Other items

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Depreciation of property, plant and equipment

     716,213        800,196  

Depreciation of right-of-use assets

     16,130        17,134  

Depreciation of investment properties

     7,661        7,663  

Amortization of other non-current assets

     136,125        112,998  

Research and development costs (other than depreciation and amortization)

     34,884        25,208  

Impairment losses on property, plant and equipment

     —          16,803  

Provision of inventory write-down

     177,777        63,290  

 

54


5

Income tax

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Current tax:

     

Provision for PRC current income tax for the period

     (8,737      (136,869

Tax filing difference

     (54,017      —    
  

 

 

    

 

 

 
     (62,754      (136,869

Deferred tax:

     

Origination and reversal of temporary differences

     74,534        (124,475
  

 

 

    

 

 

 
     11,780        (261,344
  

 

 

    

 

 

 

The provision for PRC income tax is calculated at the rate of 25% (six months ended 30 June 2021: 25%) on the estimated taxable income of the six months ended 30 June 2022 determined in accordance with relevant income tax rules and regulations. The Company did not carry out business overseas and therefore does not incur overseas income taxes.

 

6

(Losses) / earnings per share

 

  (a)

Basic (losses)/ earnings per share

The calculation of basic (losses) / earnings per share is based on the loss attributable to equity shareholders of the Company for the six months ended 30 June 2022 of RMB 426,518 thousand (six months ended 30 June 2021: profit of RMB 1,276,462 thousand) and 10,823,813,500 shares (six months ended 30 June 2021: 10,823,813,500 shares) in issue during the interim period.

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

(Loss) / profit attributable to equity shareholders of the Company

     (426,518      1,276,462  
  

 

 

    

 

 

 

Weighted average number of ordinary shares in issue (thousands of shares)

     10,823,814        10,823,814  
  

 

 

    

 

 

 

Basic (losses) / earnings per share (RMB per share)

     RMB (0.039      RMB 0.118  
  

 

 

    

 

 

 

 

55


  (b)

Diluted (losses) / earnings per share

There were no dilutive potential ordinary shares for the six months ended 30 June 2022 and 2021, therefore diluted (losses) / earnings per share is the same as basic (losses) / earnings per share.

 

56


7

Dividends

 

  (i)

Dividends payable to equity shareholders of the Company attributable to the interim period

The Board of Directors did not propose any dividend in respect of the six months ended 30 June 2022 (six months ended 30 June 2021: Nil).

 

  (ii)

Dividends payable to equity shareholders of the Company attributable to the previous financial year, approved during the interim period

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Final dividend in respect of the previous financial year, approved during the following interim period, of RMB 0.10 per ordinary share (six months ended 30 June 2021: RMB 0.10 per ordinary share)

     1,082,381        1,082,381  
  

 

 

    

 

 

 

Pursuant to a resolution passed at the Annual General Meeting held on 22 June 2022, a total dividend of RMB 1,082,381 thousand was declared for the year ended 31 December 2021 and subsequently paid in July 2022.

Pursuant to a resolution passed at the Annual General Meeting held on 16 June 2021, a total dividend of RMB 1,082,381 thousand was declared for the year ended 31 December 2020 and subsequently paid in July 2021.

 

57


8

Trade and other receivables

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Trade receivables

     69,721        79,413  

Less: loss allowance

     (2,147      (1,988
  

 

 

    

 

 

 
     67,574        77,425  
  

 

 

    

 

 

 

Amounts due from related parties excluded prepayments and bills receivable

     929,853        1,153,111  
  

 

 

    

 

 

 

Less: loss allowance

     (2,798      —    
  

 

 

    

 

 

 
     927,055        1,153,111  
  

 

 

    

 

 

 

Other receivables

     140,898        47,737  

Less: loss allowance

     (2,070      (140
  

 

 

    

 

 

 
     138,828        47,597  
  

 

 

    

 

 

 

Financial assets measured at amortized cost

     1,133,457        1,278,133  
  

 

 

    

 

 

 

Amounts due from related parties - prepayments

     7,258        34,220  

Amounts due from related parties - bills receivables

     —          25,000  
  

 

 

    

 

 

 
     1,140,715        1,337,353  
  

 

 

    

 

 

 

Amounts due from related parties mainly represent trade-related balances and dividends receivable, unsecured in nature and bear no interest.

 

58


  8

Trade and other receivables (continued)

 

The aging analysis based on invoice date of trade receivables and amounts due from related parties excluded prepayments and bills receivable (net of allowance for doubtful debts) is as follows:

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Within 1 year

     994,629        1,230,360  

1-2 year

     —          27  

Over 2 years

     —          149  
  

 

 

    

 

 

 
     994,629        1,230,536  
  

 

 

    

 

 

 

Movements in the loss allowance account in respect of trade and other receivables during the period is as follows:

 

     Six months ended 30 June  
     2022      2021  
     RMB’000      RMB’000  

Balance at 1 January

     2,128        773  

Impairment losses recognized during the period

     4,887        —    
  

 

 

    

 

 

 

Balance at 30 June

     7,015        773  
  

 

 

    

 

 

 

As at 30 June 2022 and 31 December 2021, no trade receivable was pledged as collateral. Sales to third parties are generally on cash basis or on letter of credit. Subject to negotiation, credit is generally only available for major customers with well-established trading records.

 

59


9

Trade and other payables

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Trade payables

     2,166,862        1,527,706  

Bills payable

     130,464        562,593  

Amounts due to related parties exclude advances received

     2,915,955        4,910,255  
  

 

 

    

 

 

 
     5,213,281        7,000,554  
  

 

 

    

 

 

 

Dividends payable

     570,512        30,577  

Construction payable

     348,350        487,283  

Accrued expenses

     552,070        400,391  

Other liabilities

     64,390        87,144  
  

 

 

    

 

 

 
     1,535,322        1,005,395  
  

 

 

    

 

 

 

Financial liabilities measured at amortized cost

     6,748,603        8,005,949  

Amounts due to related parties – advances received

     3,869        6,275  

Amounts due to related parties – measured at fair value through profit or loss (FVPL) (i)

     1,234,862        1,388,286  
  

 

 

    

 

 

 
     7,987,334        9,400,510  
  

 

 

    

 

 

 

Including: total amount due to related parties

     4,154,686        6,304,816  
  

 

 

    

 

 

 

 

  (i)

Amounts due to related parties – measured at FVPL represents the obligation that the Company needs to return the crude oil to its related party with maturity of less than 1 year, which is measured at fair value through profit or loss.

As at 30 June 2022 and 31 December 2021, all trade and other payables of the Group were non-interest bearing, and their fair value, approximated their carrying amounts due to their short maturities.

As at 30 June 2022 and 31 December 2021, the ageing analysis of the trade payables (including amounts due to related parties of trading in nature) and bills payable based on invoice date were as follows:

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Within one year

     5,202,374        6,990,653  

Between one and two years

     1,657        9,527  

Over two years

     9,250        374  
  

 

 

    

 

 

 
     5,213,281        7,000,554  
  

 

 

    

 

 

 

 

60


  10

Borrowings

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Credit loans due within one year

     

- Short-term bank loan

     2,059,600        1,559,800  

Credit loans due over one year but within three years

     

- Long-term borrowings from a related party

     700,000        700,000  
  

 

 

    

 

 

 
     2,759,600        2,259,800  
  

 

 

    

 

 

 

 

  (a)

The analysis of the repayment schedule of borrowings are as follows:

 

    

As at 30 June

2022

     As at 31 December
2021
 
     RMB’000      RMB’000  

Within 1 year or on demand

     2,059,600        1,559,800  

Over one year but within two years

     —          —    

Over two years but within three years

     700,000        700,000  
  

 

 

    

 

 

 
     2,759,600        2,259,800  
  

 

 

    

 

 

 

The weighted average interest rate for the Group’s short-term bank loan was 2.63% as at 30 June 2022 (31 December 2021: 2.74%). The interest rate of the Group’s long-term borrowings was 1.08% as at 30 June 2022 (31 December 2021: 1.08%).

As at 30 June 2022 and 31 December 2021, no borrowings were secured by property, plant and equipment.

 

61


  11

Reserves

 

    

Legal

surplus
(note(a))

    

Capital

surplus
(note(b))

    

Surplus

reserve
(note(c))

    

Other

reserve
(note(d))

    Hedging    

Share

premium
(note(e))

    

Safety

production

fund
(note(f))

    

Retained

earnings
(note(g))

    Total  
     RMB’000      RMB’000      RMB’000      RMB’000     RMB’000     RMB’000      RMB’000      RMB’000     RMB’000  

Balance at 1 January 2021

     4,072,476        13,739        101,355        6,326       —         106,846        145,597        13,927,837       18,374,176  

Total comprehensive income for the period attributable to shareholders of the Company

     —          —          —          702       51,729       —          —          1,276,462       1,328,893  

Dividends declared and approved in respect of previous year

     —          —          —          —         —         —          —          (1,082,381     (1,082,381

Transfer to legal surplus

     2,300,272        —          —          —         —         —          —          (2,300,272     —    

Appropriation of safety production fund

     —          —          —          —         —         —          31,268        (31,268     —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance at 30 June 2021 and 1 July 2021

     6,372,748        13,739        101,355        7,028       51,729       106,846        176,865        11,790,378       18,620,688  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total comprehensive income for the period attributable to shareholders of the Company

     —          —          —          15,937       73,430       —          —          796,969       886,336  

Amounts transferred from hedging reserve to initial carrying amount of hedged items

     —          —          —          —         (88,699     —          —          —         (88,699

Transfer to legal surplus

     198,536        —          —          —         —         —          —          (198,536     —    

Appropriation of safety production fund

     —          —          —          —         —         —          9,461        (9,461     —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance at 31 December 2021 and 1 January 2022

     6,571,284        13,739        101,355        22,965       36,460       106,846        186,326        12,379,350       19,418,325  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Total comprehensive income for the period attributable to shareholders of the Company

     —          —          —          (22,558     296,071       —          —          (426,518     (153,005

Amounts transferred from hedging reserve to initial carrying amount of hedged items

     —          —          —          —         (151,817     —          —          —         (151,817

Dividends declared and approved in respect of previous year

     —          —          —          —         —         —          —          (1,082,381     (1,082,381

Appropriation of safety production fund

     —          —          —          —         —         —          38,672        (38,672     —    

Others

     —          3,860        —          —         —         —          —          —         3,860  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balance at 30 June 2022

     6,571,284        17,599        101,355        407       180,714       106,846        224,998        10,831,779       18,034,982  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

62


  11

Reserves (continued)

 

Notes:

 

  (a)

Under PRC rules and regulations, the Company and its PRC subsidiaries are required to set aside 10% of the net income determined in accordance with the PRC accounting rules and regulations to a legal surplus reserve. The transfer to this reserve must be made before distribution of any dividend to shareholders.

The legal surplus reserve is non-distributable other than in liquidation and can be used to make good of previous years’ losses, if any, and may be utilized for business expansion or converted into ordinary shares by the issuance of new shares to shareholders in proportion to their existing shareholdings or by increasing the par value of the shares currently held by the shareholders, provided that the balance after such issuance is not less than 25% of the registered capital.

In accordance with PRC rules and regulations, the Company has set aside RMB6,571,284 thousand of legal surplus as of 30 June 2022.

 

  (b)

This reserve represents gifts or grants received from China Petrochemical Corporation, the ultimate parent company and which are required to be included in this reserve fund by PRC regulations.

 

  (c)

The transfer to this reserve from the retained profits is subject to the approval by shareholders at general meetings. Its usage is similar to that of legal surplus reserve.

 

  (d)

Other reserve comprises share of post-acquisition movements in other comprehensive income from associates and joint ventures using the equity methods of accounting with a corresponding adjustment to the carrying amount of the investment.

 

  (e)

The application of the share premium account is governed by Sections 167 and 168 of the PRC Company Law.

 

  (f)

According to the relevant PRC regulations, the Group is required to transfer an amount to specific reserve for the safety production fund based on the turnover of certain refining and chemicals products. This reserve represents unutilized safety production fund.

 

  (g)

According to the Company’s Articles of Association, the reserve available for distribution is the lower of the amount determined under China Accounting Standards for Business Enterprises and the amount determined under IFRS. The Board of Directors did not propose any dividend in respect of the six months ended 30 June 2022 (six months ended 30 June 2021: Nil).

 

63


By Order of the Board

Sinopec Shanghai Petrochemical Company Limited

Liu Gang

Joint Company Secretary

Shanghai, the PRC, 25 August 2022

 

64


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘6-K’ Filing    Date    Other Filings
Filed on:9/15/22
For Period end:9/14/22
4/28/2220-F,  IRANNOTICE
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