Donghai Securities issues research on Rongsheng Petrochemical, citing an attractive investment.

Jul 05, 2023 (China Knowledge) - Donghai Securities has issued an in-depth research report on Rongsheng Petrochemical (002493), citing the company an attractive investment. The report says the attractiveness was further reinforced in March 2023 when Saudi Aramco strategically invested '10% + 1 share' stake in Rongsheng, establishing a cooperative partnership in crude oil procurement, raw material supply, and sales of petrochemical products. As a result, the company's prospects have garnered significant attention and its value has been reassessed.

Benefiting from its majority stake in Zhejiang Petroleum and Chemical (ZPC), Rongsheng Petrochemical has created a robust strategy. ZPC which is strategically located in Zhoushan's petrochemical hub, is well-positioned to be a world-leading refining and chemical production facility, and to establish itself as a comprehensive industry chain encompassing a variety of chemical products. This integrated approach enhances the company's ability to withstand market fluctuations and mitigate risks.

Rongsheng Petrochemical has also achieved international competitiveness through the establishment of a complete polyester industry chain. Holding proprietary PTA production technology, it has benefitted from significant cost reduction, making it globally competitive. With high self-sufficiency in raw materials such as PX and PTA and leading production capacities for downstream products like films, filament, and bottle-grade chips, Rongsheng Petrochemical maintains a favorable position in the polyester industry. Moreover, the company anticipates further concentration of polyester production capacity in the future, solidifying its position as a market leader.

The company's focus on new materials serves as a catalyst for long-term growth. Leveraging its integrated refining and chemical...