China is further promoting production capacity, accelerating the exit of 'zombie' enterprises, establishing a sound withdrawal mechanism for backward production capacity, and the petrochemical industry is an important part of the implementation of the capacity reduction policy.
From 2016 to 2017, China's State Council, the Ministry of Environmental Protection and other departments issued a number of environmental protection policies and laws, among which the petrochemical industry is the focus of monitoring and rectification. It is expected that in 2018, with the implementation of the national environmental tax collection policy, environmental protection will be mandatory to include chemical industry. Within the new threshold of China-made industries, supply-side reforms are being coordinated with chemical-related policies to accelerate the elimination of backward production capacity.
Due to the country’s adjustment of the high-energy-consuming and highly polluting heavy chemical industry policies, the chlor-alkali chemical industry is facing the influence of overcapacity, energy conservation, and environmental protection. This has led to fiercer competition among companies in the industry. On the other hand, Increased the degree of concentration in the chemical industry and elimination of outdated production capacity will help improve the effective operating rate of the industry, optimize the allocation of resources, and increase the profitability of the industry.
Benefited from the continuous deepening of supply-side reforms and the upgrading of environmental protection regulations to enhance the market concentration of the chemical industry, the overall profitability of chemical companies improved significantly in 2017. According to the analysis of market demand forecast and investment strategic planning of the fluorine industry According to the report, in 2017, listed companies in the basic chemical industry achieved a total operating revenue of 40,512.61 billion yuan, a year-on-year increase of 25.52%, an operating profit of 209.833 billion yuan, a year-on-year increase of 43.70%, and a net profit of 168.556 billion yuan, a year-on-year increase of 39.23%. Industry profitability is upward trend.
The overall operating profit margin of the industry was 5.18%, which represented an increase of 14.60% over the same period of last year. The overall sales margin was 4.16%, an increase of 10.93% year-on-year. Soda ash, nitrogen fertilizer, and polyurethane profit increased significantly and is expected to continue its booming market in 2018. Benefit from the contraction of raw material prices at the supply end. Rising, prices of chemical products rose significantly, and all 17 sub-sectors achieved growth in revenue this year.
Among them, the net profit of sub-sectors such as soda ash, nitrogen fertilizer, carbon black, and polyurethane increased year-on-year; the viscose, tire, compound fertilizer, chlor-alkali and modified plastic industries experienced different degrees of decline in performance. The supply-side reform and downstream demand With the deepening of supply-side reforms, the pattern of supply and demand in some sub-sectors has improved substantially, such as polyester, polyurethane, and chlor-alkali industries. The prosperity of 2018 is expected to continue.
In the long run, the leverage ratio has been significantly reduced, and the balance sheet has been continuously rectified. In 2017, with the continuous improvement of the economic prosperity of the chemical industry and continuous improvement in corporate earnings, the balance sheet of the industry was significantly restored, and the asset operating level was greatly improved. 2. The turnover rate of total assets of carbon black, nitrogen fertilizer, polyurethane and other industries changed greatly.
From the perspective of asset-liability ratio, the asset-liability ratio of the basic chemical industry in 2017 was 49.47%, which was a decrease of 1.52% compared to the same period of last year. The lower debt ratio in the sub-sector was polyurethane (-22.35%), nitrogen fertilizer (-11.12%), and soda ash. (-8.35%), etc. Construction in progress has been reduced year by year in recent years. The industry's new production capacity has been declining year by year, the industry concentration has been further enhanced, and the leading position has been further consolidated.
In the long run, the growth rate of investment in the chemical industry has been declining year by year, the supply of new capacity has been limited, and the high pressure of domestic environmental protection has been normalized. The supply side is expected to continue to contract. At the same time, in the context of increasingly strict environmental protection, backward and medium-sized production capacity has closed down. The phenomenon of 'bad money driving out good money' has been improved. With the increase of industry concentration, the market share of leading enterprises has been continuously expanding, and the industry supply and demand pattern will continue to improve.