Soochow Securities maintains "Buy" rating for Rongsheng Petrochemical.

Jul 17, 2023 (China Knowledge) - Soochow Securities maintains a "Buy" rating for Rongsheng Petrochemical (002493) in a report published over the weekend. The report detailed the petrochemical giant's first half financial results to pivot towards positive trajectory.

The stockbroker cited the margin on oil refining has shown improvement since the beginning of the year, particularly in finished oil products and aromatics, leading to stronger overall turnaround in petrochemicals. Price differentials for gasoline, diesel, PX, pure benzene, polyethylene, and polypropylene compared to crude oil have reached favorable percentiles in the past years.

The profitability of PX has seen significant improvement, with the domestic PX-naphtha price differential increasing. Refinery catalytic reforming units, the main source of PX supply, are expected to remain unchanged or reduction in production capacity. Therefore, Rongsheng Petrochemical, with its substantial PX production capacity, is well-positioned to benefit from...