Financial Performance - The company's operating revenue for the first half of 2022 was RMB 45,900,355, representing a 23.60% increase compared to RMB 37,136,606 in the same period last year[9]. - The total profit (loss) for the period was a loss of RMB 442,601, a significant decline of 129.30% from a profit of RMB 1,510,713 in the previous year[9]. - The net loss attributable to shareholders of the parent company was RMB 436,009, marking a 135.04% decrease from a profit of RMB 1,244,189 in the same period last year[9]. - Basic and diluted earnings per share were both RMB -0.040, compared to RMB 0.115 in the same period last year, indicating a significant decline[10]. - The weighted average return on net assets decreased by 5.61 percentage points to -1.448% from 4.164% in the previous year[10]. - The company's revenue for the first half of 2022 was RMB 45.859 billion, an increase of RMB 8.771 billion or 23.65% compared to the same period last year[18]. - The pre-tax loss for the first half of 2022 was RMB 433 million, a decrease of RMB 1.976 billion compared to a pre-tax profit of RMB 1.543 billion in the same period last year[18]. - The company's financial net income for the first half of 2022 was RMB 279.3 million, up from RMB 210.5 million in the same period last year[23]. - The company reported a significant increase in cash flow from investment activities, with a net inflow of RMB 1,776,708 thousand compared to an outflow of RMB -3,106,358 thousand in the previous year[33]. - The company reported a total comprehensive income of RMB (157,308) thousand for the first half of 2022, compared to RMB 1,301,800 thousand in the same period of 2021[195]. Cash Flow and Liquidity - The net cash flow used in operating activities was RMB -6,405,122, an increase of 168.05% compared to RMB -2,389,552 in the previous year[9]. - In the first half of 2022, the company's net cash outflow from operating activities was RMB 6.4556 billion, compared to a net cash outflow of RMB 2.4434 billion in the same period last year[24]. - The company generated a net cash inflow of RMB 1.7767 billion from investing activities in the first half of 2022, a significant improvement from a net cash outflow of RMB 3.1064 billion in the previous year, primarily due to net inflows from time deposits and structured deposits of RMB 2.35 billion[24]. - The net cash inflow from financing activities was RMB 1.9968 billion in the first half of 2022, compared to a net cash inflow of RMB 0.0028 billion in the same period last year, mainly due to an increase in cash flow from loans and short-term financing notes[24]. - The company's cash inflow from operating activities for the first half of 2022 was RMB 50,632,846 thousand, an increase of 31.1% compared to RMB 38,606,063 thousand in the same period of 2021[197]. - The ending cash and cash equivalents balance as of June 30, 2022, was RMB 2,438,650 thousand, compared to RMB 1,367,415 thousand at the end of June 30, 2021, showing a significant increase of 78.3%[198]. Production and Sales - The total production of main products was 5.4317 million tons, a decrease of 8.07% year-on-year[18]. - The company processed 5.7951 million tons of crude oil, a decrease of 6.68% year-on-year[18]. - The production of gasoline was 1.4483 million tons, a decrease of 0.88% year-on-year, while diesel production was 1.3112 million tons, a decrease of 15.32% year-on-year[18]. - The production of liquefied gas increased by 23.41% year-on-year to 326,300 tons[18]. - The production of ethylene was 353,500 tons, an increase of 16.67% year-on-year, and paraxylene production was 318,400 tons, an increase of 116.01% year-on-year[18]. - The company's product sales rate was 98.74%, and the collection rate of accounts receivable (excluding related parties) was 100%[18]. - The sales volume of synthetic fibers decreased by 79.89%, while the sales volume of resins and plastics and petroleum products decreased by 15.07% and 12.89%, respectively[21]. - The company's total daily remuneration for 2022 was RMB 9,428,000, an increase of 18.4% from RMB 7,954,000 in 2021[183]. Assets and Liabilities - The net assets attributable to shareholders of the parent company decreased by 4.57% to RMB 28,875,824 from RMB 30,260,172 at the end of the previous year[9]. - Total assets decreased by 9.69% to RMB 42,481,112 from RMB 47,038,622 at the end of the previous year[9]. - The total liabilities decreased to RMB 12,614,058 thousand, reflecting a strategic focus on reducing debt levels[112]. - The company's total liabilities decreased from RMB 9,400,510,000 in December 2021 to RMB 7,987,334,000 in June 2022, a reduction of approximately 15%[149]. - The company's total assets as of June 30, 2022, were RMB 629,576,000, a decrease of 18.8% from RMB 775,007,000 at the end of 2021[185]. - The company's total equity attributable to shareholders decreased to RMB 28,858,796 thousand, down 4.3% from RMB 30,242,139 thousand as of December 31, 2021[113]. Environmental and Compliance - The company’s environmental performance showed a 100% compliance rate for wastewater discharge, with ammonia nitrogen and sulfur dioxide emissions decreasing by 58.93% and 8.78%, respectively[20]. - The company achieved a 100% compliance rate for wastewater discharge standards and a 100% compliance rate for controlled air emissions[77]. - The company has maintained its "Green Enterprise" title from Sinopec Group and continues to implement high standards for environmental management[76]. - The company completed the revision of the emergency response plan for environmental incidents, including 11 aspects such as environmental risk analysis and internal warning mechanisms, with a total of 157 environmental risk sources identified[81]. - The company has complied with all provisions of the Corporate Governance Code as per the Hong Kong Listing Rules during the reporting period[103]. Research and Development - The company’s research and development efforts resulted in 55 patent applications, with 39 patents granted during the reporting period[20]. - Research and development expenses increased to RMB 36,426 thousand in the first half of 2022, up from RMB 27,943 thousand in the first half of 2021[194]. - The group reported a depreciation expense of RMB 716,213,000 for property, plant, and equipment for the six months ended June 30, 2022, down from RMB 800,196,000 in 2021, a decrease of approximately 10.5%[130]. Shareholder Information - The total number of ordinary shareholders as of the end of the reporting period is 105,475[88]. - The largest shareholder, Sinopec Limited, holds 5,459,455,000 shares, representing 50.44% of the total shares[90]. - A cash dividend of RMB 0.1 per share was approved for the 2021 fiscal year, totaling RMB 1,082,381,350[57]. - The company proposed dividends of RMB 1,082,381 thousand during the reporting period[116]. Risks and Challenges - The company faced significant challenges due to the pandemic and supply chain disruptions, impacting downstream market demand[14]. - The company plans to focus on safety and environmental issues while ensuring stable production operations in the second half of 2022, amid rising inflation risks and uncertain international oil prices[30]. - The company faces risks related to the cyclical nature of the oil and petrochemical market, which may adversely affect its operations[48].

Financial Performance - The company's operating revenue for Q1 2022 was RMB 26,006,070, representing a year-on-year increase of 27.61%[4] - Net profit attributable to shareholders for the same period was RMB 213,510, reflecting a significant decrease of 81.81% compared to the previous year[4] - The basic earnings per share for Q1 2022 was RMB 0.020, down 81.48% year-on-year[4] - Net profit attributable to ordinary shareholders of the parent company decreased by 81.81% due to significant increases in crude oil prices and rising product costs[8] - Net profit attributable to ordinary shareholders of the parent company, after deducting non-recurring gains and losses, decreased by 79.14% for the same reasons[8] - Basic and diluted earnings per share for Q1 2022 were both RMB 0.020, down from RMB 0.108 in Q1 2021[13] - Net profit for Q1 2022 was RMB 214,850 thousand, a decrease from RMB 1,175,274 thousand in Q1 2021, indicating a decline of approximately 81.8%[13] Assets and Shareholder Information - The total assets at the end of the reporting period amounted to RMB 53,737,111, an increase of 14.24% from the end of the previous year[4] - The total number of shareholders at the end of the reporting period was 106,105[6] - The largest shareholder, Sinopec Limited, held 5,459,455,000 shares, accounting for 50.44% of the total shares[6] - Total assets as of March 31, 2022, amounted to RMB 53,737,111 thousand, an increase from RMB 47,038,622 thousand at the beginning of the year[11] Cash Flow Analysis - The company reported a net cash flow from operating activities of RMB -1,785,568, which is not applicable for year-on-year comparison[4] - Net cash flow from operating activities increased by 453.61%, indicating a significant outflow due to declining operational performance[8] - In Q1 2022, cash inflow from operating activities was CNY 27,467,908 thousand, up from CNY 20,475,530 thousand in Q1 2021, representing a growth of approximately 34.5%[14] - Cash outflow from operating activities increased to CNY 29,253,476 thousand in Q1 2022 from CNY 20,798,062 thousand in Q1 2021, resulting in a net cash flow from operating activities of -CNY 1,785,568 thousand, compared to -CNY 322,532 thousand in the previous year[14] - The ending cash and cash equivalents balance as of March 31, 2022, was CNY 4,987,376 thousand, compared to CNY 1,241,576 thousand at the end of Q1 2021, reflecting a significant increase[15] Investment and Financing Activities - Cash inflow from investing activities decreased to CNY 1,625,609 thousand in Q1 2022 from CNY 2,100,402 thousand in Q1 2021, while cash outflow remained relatively stable at CNY 4,450,012 thousand[15] - The net cash flow from investing activities was -CNY 2,824,403 thousand in Q1 2022, compared to -CNY 2,334,042 thousand in Q1 2021, indicating a worsening investment cash flow situation[15] - Cash inflow from financing activities significantly increased to CNY 6,454,975 thousand in Q1 2022 from CNY 890,000 thousand in Q1 2021, showing a growth of over 627%[15] - The net cash flow from financing activities was CNY 4,485,169 thousand in Q1 2022, a substantial improvement from -CNY 3,024,860 thousand in Q1 2021[15] - The cash flow from financing activities included CNY 3,455,000 thousand from loans obtained in Q1 2022, compared to CNY 890,000 thousand in Q1 2021, highlighting increased borrowing activity[15] Operational Costs and Tax Obligations - Total operating costs for Q1 2022 were RMB 25,599,241 thousand, compared to RMB 19,157,566 thousand in Q1 2021, reflecting a year-on-year increase of about 33.6%[12] - The company incurred CNY 5,589,134 thousand in tax payments in Q1 2022, which is an increase from CNY 3,491,795 thousand in Q1 2021, indicating a rise in tax obligations[14] Product Development and Market Strategy - The company has not disclosed any new product developments or market expansion strategies in the current report[3]

Financial Performance - The net profit attributable to shareholders for 2021 was RMB 2,000,506 thousand according to Chinese accounting standards, and RMB 2,073,431 thousand according to International Financial Reporting Standards[3]. - The company's profit before tax for 2021 was RMB 2,721.1 million, significantly up from RMB 590.8 million in 2020, marking a 360.5% increase[7]. - The net profit attributable to shareholders for 2021 was RMB 2,073.4 million, compared to RMB 645.1 million in 2020, representing a 221.5% increase[7]. - The company's operating income for 2021 was RMB 89,280,415 thousand, reflecting a 19.51% increase from RMB 74,705,183 thousand in 2020[10]. - The net cash flow from operating activities in 2021 was RMB 4,060,026 thousand, a 131.84% increase from RMB 1,751,217 thousand in 2020[10]. - The basic earnings per share for 2021 was RMB 0.192, up from RMB 0.060 in 2020, indicating a 213.33% increase[11]. - The company's total liabilities increased to RMB 16,543.2 million in 2021 from RMB 15,284.2 million in 2020[7]. - The weighted average return on equity for 2021 was 6.727%, up from 2.127% in 2020, showing a significant improvement[11]. - The company's revenue for 2021 was RMB 89.198 billion, an increase of 19.53% compared to the previous year[49]. - The company's net profit for 2021 was RMB 2.004 billion, representing a significant increase of 213.35% from RMB 639.436 million in 2020[103]. Dividends and Shareholder Information - The proposed final dividend for 2021 is RMB 0.1 per share (including tax), pending approval at the annual general meeting[3]. - The company plans to pay the final dividend to H-share shareholders around July 28, 2022, based on the share register as of July 5, 2022[4]. - The company will suspend H-share transfer registration from June 30, 2022, to July 5, 2022, to confirm the rights to receive the final dividend[4]. - The company had a total of 104,031 common shareholders at the end of the reporting period, an increase from 102,649 at the end of the previous month[22]. - The top ten shareholders held a total of 50.44% of the shares, with China Petroleum & Chemical Corporation being the largest shareholder[24]. - The controlling shareholder is China Petroleum & Chemical Corporation, holding 68.31% of the shares[32]. - The actual controller is China Petroleum Group, which holds 68.83% of the shares[33]. Operational Highlights - In 2021, the company's net sales amounted to RMB 75,888.8 million, a 23.3% increase from RMB 61,560.9 million in 2020[7]. - The company generated 55.19% of its sales from petroleum products, with gasoline contributing 22.70% and diesel 18.13%[16][18]. - The sales of synthetic fibers accounted for 1.81% of total sales, with polyester short fibers at 0.22% and acrylic short fibers at 1.52%[17]. - The company reported a net gain from the disposal of non-current assets of RMB 48,671 thousand in 2021, down from RMB 72,296 thousand in 2020[14]. - The company processed a total of 13.76 million tons of crude oil in 2021, a decrease of 6.18% year-on-year, and produced 7.97 million tons of refined oil, down 4.90%[49]. - The company achieved a product sales rate of 100.05% and a receivables turnover rate of 100% in 2021, maintaining high product quality[49]. Risk Management and Compliance - The company has detailed risk descriptions regarding potential future development risks in the management discussion and analysis section of the report[5]. - The company does not have any violations of decision-making procedures for external guarantees[5]. - The company is continuously evaluating its accounting estimates and judgments, which may affect its financial performance[56]. - The company is assessing the recoverable amount of non-current assets to determine any impairment losses[59]. - The company is subject to stringent environmental regulations, which may lead to additional compliance costs in the future[141]. - The company faces risks related to the cyclical nature of the oil and petrochemical markets, which can significantly impact revenue and pricing[138]. Research and Development - The company has a strong focus on research and development in alternative energy products and technologies[29]. - Research and development expenses for 2021 amounted to RMB 0.0943 billion, a decrease from RMB 0.1106 billion in 2020[93]. - The company is focused on R&D innovation as part of its strategic initiatives[160]. - The company is exploring a new compensation distribution mechanism for research personnel and has implemented a project responsibility incentive plan[55]. - The company employed 169 R&D personnel, representing 2.02% of total staff, with 12 holding doctoral degrees and 30 holding master's degrees[114]. Environmental and Safety Initiatives - The company emphasizes safety and environmental protection as foundational elements of its operational strategy[132]. - The total environmental protection investment was RMB 393 million, accounting for 0.50% of operating revenue[173]. - The company is committed to achieving carbon neutrality goals by reducing coal consumption and increasing the use of renewable energy sources[136]. - The company is adapting to the "plastic limit order" and increasing the application of biodegradable plastics in response to environmental regulations[147]. - The company reported that there were no significant safety production accidents during the period[173]. Strategic Initiatives and Future Plans - The company plans to continue optimizing its product structure and enhancing the quality and variety of existing products to meet the growing market demand for petrochemical products in China[6]. - The company aims to enhance its competitive advantage by integrating upstream and downstream operations and optimizing product structures[130]. - The company has initiated several major capital projects, including a 2.4 million tons/year carbon fiber project and a 400,000 tons/year clean gasoline project, with varying stages of completion[126]. - The projected capital expenditure for 2022 is approximately RMB 3.5 billion[127]. - The company plans to process a total of 13.65 million tons of crude oil in 2022, with production targets of 7.57 million tons for refined oil, 825,200 tons for ethylene, and 1,021,000 tons for polypropylene[132]. Related Party Transactions - The company engaged in related party transactions with Sinopec Group, with raw material procurement amounting to RMB 51,521,921, representing 74.21% of similar transactions[191]. - The sales of petroleum and petrochemical products to Sinopec Group amounted to RMB 60,926,642, accounting for 68.30% of similar transactions[191]. - The independent non-executive directors confirmed that the related party transactions were conducted on normal commercial terms and did not significantly affect the company's independence[192]. - The auditors did not find any issues that would lead them to believe that the disclosed related party transactions were not approved by the company's board[192].

Financial Performance - The company's operating revenue for the first half of 2021 was RMB 37,136,606 thousand, representing a 4.13% increase compared to RMB 35,663,352 thousand in the same period last year[7]. - The total profit for the reporting period was RMB 1,510,713 thousand, a significant recovery from a loss of RMB 2,354,618 thousand in the previous year[7]. - Net profit attributable to shareholders of the parent company was RMB 1,244,189 thousand, compared to a loss of RMB 1,716,072 thousand in the same period last year[7]. - Basic earnings per share for the reporting period were RMB 0.115, a recovery from a loss of RMB 0.159 in the same period last year[9]. - The weighted average return on net assets increased to 4.164%, up 10.75 percentage points from -6.588% in the previous year[9]. - The net profit attributable to shareholders was RMB 1.2765 billion, up RMB 2.9473 billion from a loss of RMB 1.6708 billion in the previous year[16]. - The gross profit margin for oil products was 31.9%, reflecting an increase of 8.39 percentage points year-on-year[36]. - The net profit for the six months ended June 30, 2021, was RMB 1,276,462 thousand, contributing to a total comprehensive income of RMB 1,328,893 thousand[115]. Revenue and Sales - The company's revenue for the first half of 2021 was RMB 37.0885 billion, an increase of RMB 1.461 billion or 4.10% year-on-year[16]. - In the first half of 2021, the company achieved a net sales amount of RMB 31.636 billion, an increase of 5.71% compared to the same period last year[21]. - The sales revenue for synthetic fibers, resins and plastics, and petroleum products increased by 1.55%, 5.58%, and 15.84% respectively, while intermediate petrochemical products and petrochemical product trading decreased by 6.23% and 11.43%[21]. - Oil product sales revenue reached RMB 19,501,406 thousand for the six months ended June 30, 2021, an increase from RMB 18,977,693 thousand in the same period of 2020[183]. Production and Operations - The total production of main products decreased by 11.19% year-on-year to 5.9085 million tons due to major maintenance activities[16]. - The crude oil processing volume was 6.2101 million tons, a decrease of 11.52% compared to the same period last year[16]. - The production of finished oil was 3.6183 million tons, down 8.34% year-on-year, with gasoline production decreasing by 0.86% and diesel by 15.67%[16]. - Ethylene production fell by 25.92% to 303,000 tons, while synthetic fiber polymer production increased by 3.80% to 171,900 tons[16]. - The company completed its largest historical maintenance project, involving 58 units over a period of nearly three and a half months[16]. Cash Flow and Financial Position - The net cash flow from operating activities improved to RMB -2,389,552 thousand, a 17.72% reduction in cash outflow compared to RMB -2,904,166 thousand in the previous year[7]. - The company's cash and cash equivalents decreased significantly to RMB 1,367,415 thousand from RMB 6,916,408 thousand, a decrease of about 80.24%[110]. - The company's cash and cash equivalents included short-term deposits of RMB 9,087,104,000 as of June 30, 2021, down from RMB 11,092,283,000 as of December 31, 2020[142]. - The company's operating cash outflow was RMB 2.4434 billion, an improvement from RMB 2.9389 billion in the same period last year[24]. Assets and Liabilities - The total assets at the end of the reporting period were RMB 46,829,792 thousand, reflecting a 4.65% increase from RMB 44,749,173 thousand at the end of the previous year[7]. - The total liabilities increased to RMB 17,224,087 thousand, an increase from RMB 15,394,155 thousand, which is a rise of about 11.9%[200]. - The asset-liability ratio as of June 30, 2021, was 36.65%, up from 35.92% on June 30, 2020[27]. - The company's total liabilities increased to RMB 10,199,742,000 as of June 30, 2021, from RMB 6,476,924,000 as of December 31, 2020, indicating a growth of 57.0%[153]. Environmental and Regulatory Compliance - The company maintained a 100% compliance rate for wastewater discharge in the first half of the year, with significant reductions in emissions of COD, ammonia nitrogen, and nitrogen oxides by 32.36%, 39.59%, and 18.79% respectively[17]. - The company has received multiple environmental certifications, including ISO 14001, and continues to promote green development initiatives[68]. - The company has established a comprehensive emergency response plan for environmental incidents, which includes 11 aspects such as risk analysis and emergency response measures[72]. - The company has not faced any administrative penalties due to environmental issues during the reporting period[76]. Investment and Capital Expenditure - The group's capital expenditure in the first half of 2021 was RMB 1.193 billion, primarily for projects including 24,000 tons/year raw silk and 12,000 tons/year 48K tow carbon fiber[26]. - The capital expenditure for 2021 is estimated to be around RMB 3.25 billion, funded through self-owned funds and bank loans[47]. - The company has ongoing projects including a 24,000 tons/year carbon fiber project with an investment of RMB 3.489638 billion, which is currently under construction[43]. Risks and Challenges - The company has outlined potential risks in its report, advising investors to be aware of investment risks[5]. - The company faces risks from the cyclical nature of the oil and petrochemical market, which may adversely affect its operations due to price fluctuations[45]. - The company relies on imported crude oil for over 95% of its needs, exposing it to procurement risks and potential cost increases due to rising oil prices[46]. - Currency fluctuations, particularly the depreciation of the RMB, could negatively impact the company's costs and profitability, especially since a portion of its procurement is denominated in foreign currencies[49]. Shareholder Structure and Governance - The company has a controlling shareholder, Sinopec Limited, holding 5.46 billion shares, accounting for 50.44% of the total shares, which may influence the company's operations and financial distribution negatively for minority shareholders[51]. - The company maintained a stable shareholder structure with no new major shareholders entering during the reporting period[86]. - The top ten shareholders include China Petroleum & Chemical Corporation holding 50.44% of shares, and Hong Kong Central Clearing Limited holding 31.91%[83]. - The company has complied with all provisions of the Corporate Governance Code as per the Hong Kong Listing Rules during the reporting period[102].

Financial Performance - The net profit attributable to the parent company's shareholders for 2020 was RMB 628,110 thousand, while the net profit according to IFRS was RMB 645,072 thousand[6]. - The company's net sales for 2020 were RMB 61,560.9 million, a decrease from RMB 88,055.7 million in 2019, representing a decline of approximately 30%[11]. - The company's profit before tax for 2020 was RMB 590.8 million, down from RMB 2,656.1 million in 2019, indicating a decrease of about 77.8%[11]. - The net profit attributable to shareholders for 2020 was RMB 645.1 million, a significant drop from RMB 2,215.7 million in 2019, reflecting a decline of approximately 70.9%[11]. - The total operating income for 2020 was RMB 74,705.2 million, down 25.55% from RMB 100,346.0 million in 2019[14]. - The net cash flow from operating activities for 2020 was RMB 1,751.2 million, a decrease of 65.80% compared to RMB 5,121.2 million in 2019[14]. - The total assets as of the end of 2020 were RMB 44,749.2 million, a slight decrease of 1.94% from RMB 45,636.1 million at the end of 2019[14]. - The net assets attributable to shareholders at the end of 2020 were RMB 29,218.0 million, down 2.23% from RMB 29,885.3 million at the end of 2019[14]. - Basic earnings per share decreased by 71.71% to RMB 0.058 from RMB 0.205 in the previous year[15]. - The weighted average return on equity dropped by 5.02 percentage points to 2.127% from 7.143% in the previous year[15]. - Net profit for the year under Chinese accounting standards was RMB 639,436 thousand, down from RMB 2,225,153 thousand in the previous year[16]. - The company's total sales revenue for the year 2020 was RMB 61,560.9 million, a decrease from RMB 88,055.7 million in 2019[66]. - The net profit for the year 2020 was RMB 656.4 million, down from RMB 2,227.1 million in 2019[66]. Dividends and Shareholder Information - The proposed final dividend for 2020 is RMB 0.1 per share (including tax), pending approval at the annual general meeting[6]. - The company plans to distribute dividends to H-share shareholders around July 20, 2021, based on the shareholder registry as of June 28, 2021[166]. - The total number of ordinary shareholders increased to 87,627 by the end of the reporting period, up from 86,305 at the end of the previous month[25]. - The top ten shareholders hold a total of 5,460,000,000 shares, representing 50.44% of the total shares outstanding[26]. - Hong Kong Central Clearing (Agent) Limited holds 3,453,881,030 shares, accounting for 31.91% of the total shares[33]. - China Petroleum & Chemical Corporation is the controlling shareholder, holding 82,709,227,393 shares, which is 68.31% of the total shares[29]. Operational Highlights - The company aims to enhance its operational efficiency and is focused on becoming a "domestically leading, world-class" energy and chemical company[9]. - The company has a strong market presence in East China, which is one of the fastest-growing regions in China for petrochemical products[9]. - The company is actively adjusting its product structure and improving the quality and variety of existing products to meet the growing market demand for petrochemical products in China[9]. - The company produced over 60 different products, with a significant portion used in downstream production[20]. - The company achieved a product sales rate of 100.11% and a receivables collection rate of 100%[52]. - The overall operation of the company's facilities was stable, with a facility stability rate of 98%, an increase of 0.36 percentage points[51]. - The company implemented effective pandemic prevention measures, ensuring zero input, zero spread, and zero infection[50]. Market and Economic Conditions - In 2020, the average price of WTI crude oil was $39.51 per barrel, a decrease of 30.7% year-on-year; Brent crude averaged $41.74 per barrel, down 35.1%[54]. - The company anticipates that global economic recovery will drive an increase in oil demand, despite challenges from geopolitical tensions and supply pressures[126]. - The company faces risks from the cyclical nature of the oil and petrochemical markets, which can significantly impact its operating performance due to price volatility[134]. - The company relies on imported crude oil for over 95% of its production, exposing it to procurement risks and potential cost increases due to fluctuating oil prices[135]. Environmental and Social Responsibility - The company published its 2020 Corporate Social Responsibility report, detailing its efforts in environmental, social, and governance aspects[184]. - The company achieved a 100% compliance rate for wastewater discharge and hazardous waste disposal in 2020[186]. - Total emissions of sulfur dioxide, nitrogen oxides, and volatile organic compounds decreased by 4.74%, 3.37%, and 7.50% year-on-year, respectively[186]. - The company has been recognized as a "Green Enterprise" in 2020, maintaining its status from previous years[185]. - The company has implemented a comprehensive environmental monitoring plan covering seven areas, including water quality and air quality[190]. Governance and Management - The company has maintained its accounting firm, PwC Zhong Tian, for 8 years, with an audit fee of RMB 4,800,000 for domestic services and RMB 3,000,000 for international services[172]. - The company has a focus on strategic development within the chemical industry, as evidenced by Wu Haijun's various roles in related organizations[200]. - The company has seen a significant turnover in its board members, with several directors and supervisors stepping down after the annual general meeting on June 18, 2020[199]. - The company’s strategic committee is chaired by Wu Haijun, who also serves on the nomination committee, indicating a strong leadership role in corporate governance[200]. Risks and Challenges - The company may encounter challenges from stricter environmental regulations that could lead to additional costs[137]. - Currency fluctuations, particularly the depreciation of the RMB, could adversely affect the company's costs and profitability due to its foreign currency transactions[138]. - The company faces risks if Sinopec Limited refuses to conduct transactions or modifies agreements unfavorably, potentially impacting business operations[139]. - The company is subject to stringent environmental policies, including the prohibition and restriction of certain plastic products, which may affect operational costs[141].

Financial Performance - The net profit attributable to the parent company's shareholders for 2019 was RMB 2,213,716 thousand, while the net profit according to IFRS was RMB 2,215,728 thousand[6]. - The proposed dividend for 2019 is RMB 0.12 per share (including tax), pending approval at the annual general meeting[6]. - The net sales for 2019 were RMB 88,055.7 million, a decrease from RMB 95,613.5 million in 2018[12]. - The profit before tax for 2019 was RMB 2,656.1 million, down from RMB 6,808.1 million in 2018, representing a decline of approximately 61.0%[12]. - The net profit attributable to shareholders for 2019 was RMB 2,215.7 million, a significant drop of 58.5% compared to RMB 5,336.3 million in 2018[12]. - Basic earnings per share for 2019 were RMB 0.205, down 57.99% from RMB 0.488 in 2018[16]. - The total revenue for 2019 was RMB 100.27 billion, a decrease of 6.89% compared to the previous year[163]. - The operating profit for 2019 was RMB 1,320.5 million, representing 1.5% of total sales revenue[180]. - The net profit attributable to shareholders for the year was RMB 2,215.7 million, accounting for 2.5% of total sales revenue[180]. Assets and Liabilities - The total assets as of December 31, 2019, were RMB 45,494.1 million, an increase from RMB 44,385.9 million in 2018[12]. - The total liabilities as of December 31, 2019, were RMB 15,500.2 million, up from RMB 13,923.5 million in 2018[12]. Cash Flow - The cash flow from operating activities for 2019 was RMB 5,121.2 million, a decrease of 23.51% from RMB 6,695.1 million in 2018[15]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 87,549, down from 90,981 at the end of the previous month[27]. - The largest shareholder, Sinopec Limited, held 5,460,000,000 shares, representing 50.44% of the total shares[28]. - The company did not issue any securities during the reporting period, and there were no changes in the total number of shares or shareholder structure[26]. Corporate Governance - The company has improved its corporate governance structure in compliance with relevant laws and regulations[84]. - The board of directors consists of 10 members, including 4 executive directors, 2 non-executive directors, and 4 independent non-executive directors[102]. - The board held 5 meetings in 2019, with all meetings attended by a majority of directors either in person or by proxy[104]. - The company has established a comprehensive internal control system since 2004, covering production, operations, finance, investment, human resources, and information disclosure[93]. - The company has adopted and implemented the "Code of Conduct for Securities Transactions" to regulate securities trading by directors and supervisors[75]. Risk Management - The company has established risk management and internal control systems to manage business risks and ensure the protection of shareholder assets[142]. - The comprehensive risk management program was established in 2011, with a focus on risk identification, assessment, response, monitoring, and improvement[145]. - The internal audit department is responsible for independent supervision and evaluation of the effectiveness of risk management systems, reporting to the board of directors[146]. Employee Information - The total number of employees in the group is 8,878, with 8,790 in the company and 88 in subsidiaries[78]. - The total compensation for employees during the reporting period amounted to RMB 3,147,372.16 thousand[79]. - The company has implemented a training program aimed at enhancing employee skills and supporting talent development[80]. Market and Product Information - The main products of the group accounted for 100% of the net sales in 2019, with petroleum products making up 48.98% and petrochemical product trading at 24.63%[25]. - The group produced over 60 different products, including synthetic fibers, resins, plastics, and intermediate petrochemical products[24]. - The company actively adjusts its product structure and continuously improves product quality and variety to meet the growing market demand for petrochemical products in China[158]. Audit and Compliance - The financial statements were audited by PwC and Deloitte, both issuing standard unqualified opinions[5]. - The company has not faced any penalties from securities regulatory authorities in the past three years[77]. - The external auditor, PwC, issued an internal control audit report for the financial report as of December 31, 2019, confirming the effectiveness of internal controls[97]. Strategic Goals - The company aims to enhance operational efficiency and aims to become a "domestically leading, world-class" energy and chemical company[11]. - The strategic committee aims to build a "domestically leading, world-class" energy chemical and new materials company, focusing on hydrogen energy and other green energy market research[136]. - The company plans to enhance its development strategy for energy, chemicals, and new materials, with a goal to establish international competitiveness within approximately "two three-year" and "two ten-year" timeframes[136].

Financial Performance - For the first half of 2019, the company's operating revenue was RMB 51,992,583, a decrease of 0.37% compared to RMB 52,187,640 in the same period last year[10]. - The total profit for the same period was RMB 1,359,243, reflecting a significant decline of 69.90% from RMB 4,515,157 in the previous year[10]. - Net profit attributable to shareholders of the parent company was RMB 1,137,241, down 67.73% from RMB 3,524,131 year-on-year[10]. - The net cash flow from operating activities was RMB 245,974, a drastic decrease of 94.18% compared to RMB 4,227,404 in the previous year[10]. - Basic earnings per share for the first half of 2019 were RMB 0.105, a decline of 67.79% compared to RMB 0.326 in the same period last year[10]. - The weighted average return on net assets was 3.676%, down from 11.618% in the previous year, indicating a significant drop in profitability[10]. - The company's net profit after tax and non-controlling interests for the first half of 2019 was RMB 1.1436 billion, a decrease of RMB 2.4077 billion compared to RMB 3.5513 billion in the same period last year[26]. - The company's cash inflow from operating activities in the first half of 2019 was RMB 220.4 million, down from RMB 4.2135 billion in the same period last year[27]. - The company's total borrowings increased by RMB 555.4 million to RMB 1.0526 billion as of June 30, 2019, primarily due to an increase in short-term debt[28]. - The company's capital expenditure in the first half of 2019 was RMB 350 million, mainly for various oil product clean-up projects and other infrastructure improvements[29]. Industry Context - The petrochemical industry in China experienced a revenue of RMB 6.1 trillion in the first half of 2019, with a year-on-year growth of 2.2%, while total profit decreased by 18.3% to RMB 359.6 billion[15]. - The refining industry reported a revenue of RMB 1.91 trillion, with a profit decline of 62.4% to RMB 41.28 billion[15]. - The chemical industry achieved a revenue of RMB 3.5 trillion, with profits decreasing by 13.1% to RMB 208.54 billion[15]. - The company faced increased downward pressure in the petrochemical industry due to intensified market competition and external uncertainties[16]. Operational Highlights - The total production volume of the group in the first half of 2019 was 6.8779 million tons, an increase of 2.53% year-on-year[20]. - The sales revenue for the first half of 2019 reached RMB 46.1251 billion, a slight increase of 0.17% compared to the same period last year[22]. - The production of aviation kerosene increased by 25.10% year-on-year, while diesel production decreased by 4.94%[20]. - The sales volume of synthetic fibers was 93.7 thousand tons, with a net sales amount of RMB 1,198.6 million, reflecting a year-on-year increase of 6.68%[22]. - The group achieved a product sales rate of 99.77% and a cash collection rate of 100% in the first half of 2019[20]. Environmental Performance - The average concentration of VOCs at the factory boundary decreased by 11.55% year-on-year, indicating improved environmental performance[20]. - The company reported a 26.52% year-on-year reduction in sulfur dioxide emissions and a 23.67% reduction in nitrogen oxides emissions in the first half of 2019[68]. - The company achieved a 100% compliance rate for wastewater discharge and hazardous waste disposal during the reporting period[68]. - The company has committed to green development and environmental management, obtaining ISO 14001 certification and continuing to promote pollution prevention initiatives[67]. Risks and Challenges - The company has outlined potential risks in its report, advising investors to be cautious regarding investment risks[7]. - The company is currently facing risks related to the cyclical nature of the oil and petrochemical market, which may adversely affect its operations due to price volatility[44]. - The company relies on imports for over 95% of its crude oil, exposing it to procurement risks and potential supply disruptions due to fluctuating prices[45]. - Environmental regulations may impact the company's operations, as stricter standards could lead to additional compliance costs[47]. Shareholder Information - The controlling shareholder, Sinopec Limited, holds 5.46 billion shares, representing 50.44% of the total shares, indicating absolute control over the company[50]. - The company reported a cash dividend of RMB 2.50 per 10 shares for the 2018 fiscal year, totaling RMB 2,705,953.375 thousand[52]. - The company has not experienced any major litigation or arbitration matters during the reporting period[55]. - The company has complied with commitments made during the equity division reform and has not found any violations by the controlling shareholder[54]. Future Outlook - The company plans to enhance operational efficiency by optimizing product structure and reducing low-value product yields[34]. - The company aims to complete over 1 million LDAR coverage points within the year as part of its environmental initiatives[34]. - The company plans to focus on new product development and market expansion strategies to enhance future growth prospects[103]. - The group plans to invest RMB 400,000 thousand in a new company, Shanghai Shidian Energy Co., Ltd., to acquire a 40% stake, with the payment still pending as of June 30, 2019[190].