Splashing 26.7 billion yuan on a dual-track strategy! Hengyi Petrochemical makes moves on two major projects

On the evening of May 15, Hengyi Petrochemical (000703) released two major investment announcements, officially announcing the simultaneous advancement of major industrial projects in Xinjiang and Hubei. While deepening its presence in the upstream coal-based new materials sector, the company is increasing its investment in the green circular recycling industry. Relying on dazzling operating performance to bolster its confidence for expansion, it is comprehensively perfecting its strategic layout across the entire polyester industry chain.

The core project of this significant launch is the annual production of 2.4 million tons of high-quality coal-to-ethylene glycol for fiber use. The project is to be constructed by the company's wholly-owned subsidiary, Hengyi Energy Technology (Turpan) Co., Ltd., with a total investment of 25.7 billion yuan. Located in the Coal-based New Materials Circular Industrial Park of the Turpan Economic Development Zone, the overall construction period is set at three years, with the official production start time locked for the first half of 2028.

In terms of project construction planning, this large-scale coal chemical project features a comprehensive layout. In addition to the core main production line for 2.4 million tons of fiber-grade ethylene glycol, it includes the simultaneous construction of a full set of production units, auxiliary facilities, and utility engineering systems. This covers full-process core equipment such as gasification, gas purification, hydrogen-carbon separation, ammonia synthesis, nitric acid, DMO synthesis, ethylene glycol synthesis, and air separation. The aim is to create an integrated, mature coal chemical production base to ensure stable and efficient raw material production.

Regarding funding, the construction capital for this project is derived entirely from corporate self-owned funds and externally raised funds. Relying on the steady recovery in profitability across all product lines since 2026, combined with explosive growth in first-quarter performance, the company currently maintains ample cash reserves and a solid operational foundation. As the company's operational benefits continue to improve and expectations for the conversion of existing convertible bonds rise, there is still room for a decline in the overall asset-liability ratio. Meanwhile, Hengyi Petrochemical will strengthen the refined management and control of project investment and strictly control construction expenditures. This substantial investment will not cause a substantive impact on the company's daily production and operations or financial structure, and the enterprise will push forward with the construction and implementation of the project at full speed.

From the perspective of industrial layout logic, the current global energy market landscape is turbulent, and the stability of energy supply is being severely tested. Independent and controllable industrial chains have become a core trend in industrial development. Relying on China's resource characteristics of being rich in coal and poor in oil, the strategic value of the coal chemical industry continues to highlight itself. As an indispensable core raw material for the polyester industry, ethylene glycol has stable market demand. Hengyi Petrochemical is actively responding to national energy security strategies and industrial upgrade policies, designating coal-based new materials as a long-term core development track. By using coal raw materials to replace traditional petroleum raw materials to produce high-end chemical products, it aims to precisely fill the gap in upstream raw materials of the industrial chain.

The company's layout of a large coal-to-ethylene glycol base in Xinjiang is a key strategic move to connect upstream to the polyester industry chain and achieve self-sufficiency in core raw materials. This move will greatly enrich the company's raw material procurement channels, effectively hedge against operational risks caused by sharp fluctuations in international crude oil prices, and comprehensively enhance the profitability resilience of the entire polyester main business chain.

Upon full commissioning of the project in 2028, Hengyi Petrochemical will successfully achieve a diversified layout of production raw materials, complete the integration of upstream and downstream raw materials, and create a highly competitive new industrial model featuring “Oil, Coal, and Textiles” three-dimensional synergistic development within the industry. Relying on the vertical integrated operational advantage of “coal resources — ethylene glycol raw materials — polyester terminal manufacturing”, the company will completely break the industry's long-standing single dependence on crude oil raw materials, further stabilize profit margins in the industrial chain, improve the stability and predictability of operating profits, and comprehensively strengthen the company's market profitability and industry risk resistance.

In addition to the heavy-weight coal chemical project, Hengyi Petrochemical also finalized its green industrial layout in Central China on the same day. Its subsidiary, Hengyi Hubei, officially launched the annual production of 300,000 tons of circular new materials industrial demonstration project. Located in Jingzhou, Hubei, the project has a total investment of 1 billion yuan and a total construction cycle of only 18 months.

This recycling project relies on the dual recycling system of a national online digital platform + offline physical outlets established by the enterprise. It utilizes exclusive patented recycling process technologies independently developed by the company to carry out resource-based recycling utilization of waste textile materials. The circular new materials produced after the project is completed have very extensive application scenarios and can be deeply adapted to multiple mainstream fields such as clothing, footwear, and hats, home daily necessities, and automotive transportation accessories, helping the enterprise deeply explore the blue ocean market of the circular economy. The implementation of this project will further broaden the company's raw material supply channels, reduce dependence on petrochemical raw materials again, and help the enterprise practice green and low-carbon development concepts.

Dazzling operating performance has become a solid shield for the company's large-scale expansion. Financial data show that Hengyi Petrochemical operated steadily in 2025, achieving operating revenue of 113.527 billion yuan and net profit attributable to shareholders of 258 million yuan for the year, a year-on-year increase of 10.43%. Entering 2026, the company's profitability momentum exploded in an all-round way. The first quarter saw operating revenue of 29.948 billion yuan, a year-on-year increase of 10.23%, and net profit attributable to shareholders as high as 1.995 billion yuan, a year-on-year surge of 3773.77%. Net profit attributable to shareholders after deducting non-recurring gains and losses was 1.94 billion yuan, with a year-on-year increase reaching as high as 23640.41%. The profitability level achieved a leapfrog upgrade, laying a solid financial and operational foundation for the smooth advancement of the company's two multi-billion and billion-yuan projects.

In the future, relying on the two-wheel drive model of independent layout of coal chemical raw materials + extension of the green circular industry, Hengyi Petrochemical will continue to improve the entire industrial chain ecosystem, steadily expand industrial scale, and continuously consolidate its position as the industry leader in the polyester chemical field.