Sinopec Shanghai Petrochemical Company Limited (SHANGHAI PECHEM) reported a return to profitability for the six months ended 30 June 2026, reversing the prior-year loss as operating efficiencies offset softer revenue.

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1H26 revenue slipped 1.34% year on year to RMB38.99 billion, yet gross profit improved to RMB367.28 million from a RMB640.54 million loss in 1H25. Net profit attributable to equity shareholders reached RMB300.43 million, compared with a RMB462.13 million loss a year earlier. Profit before tax stood at RMB387.22 million versus a RMB595.62 million loss in the comparative period.

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Cost control drove the turnaround: cost of sales declined 2.68% to RMB33.23 billion, lifting gross margin to 0.94% (1H25: –1.62%). Operating expenses were broadly stable, while provision for inventory write-downs rose to RMB545.27 million.

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Cash flow was mixed. Operating activities recorded a RMB0.84 billion outflow (1H25: RMB0.78 billion inflow), weighed by higher payments for supplies and taxes. Capital spending totaled RMB925 million, focused on the cogeneration upgrade and large-tow carbon-fiber expansion. Financing activities generated RMB1.86 billion, driven by RMB1.40 billion in new borrowings and a RMB600 million minority capital injection into the Inner Mongolia carbon-fiber subsidiary.

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Balance-sheet metrics remained solid: total assets edged up 0.85% to RMB42.92 billion, while the gearing ratio improved to 42.85% (end-2025: 44.42%). Net assets attributable to shareholders stood at RMB23.42 billion. The board did not propose an interim dividend.

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Business mix was stable. Petroleum products contributed 62.83% of net sales, chemical products 30.85%, and trading activities 5.56%. First-half output included 5.68 million tonnes of processed crude (-10.16% YoY), 3.48 million tonnes of refined oil (-12.80%), and 327,300 tonnes of ethylene (+19.79%).

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Management flagged a “complex and volatile” external environment for 2H26, citing geopolitical tensions, continued oil-price swings and new domestic capacity additions. Strategic priorities include further cost efficiency, progression of the comprehensive technological transformation project, acceleration of high-end materials expansion—particularly carbon fiber—and disciplined capital management.