Hengyi Petrochemical Co Ltd

Hengyi Petrochemical Co Ltd exhibits a capital structure characterized by high leverage and constrained liquidity. The company reports total assets of CNY 109.6 billion against total liabilities of CNY 85.2 billion, resulting in a debt-to-equity ratio of 2.75. Long-term debt stands at CNY 67.1 billion, significantly outweighing total equity of CNY 24.4 billion. Liquidity is tight, with a current ratio of 0.55, indicating that current liabilities exceed current assets. The risk assessment flags medium liquidity risk and notes that net cash is negative after subtracting total debt. Operating cash flow is positive at CNY 4.6 billion, but free cash flow is negative at CNY -4.0 billion due to capital expenditures of CNY 5.5 billion.

Profitability metrics are weak, with a return on equity (ROE) of -0.53% and a return on assets (ROA) of -0.12%. The company generated a net income of CNY 258.3 million on revenue of CNY 113.5 billion, implying a net margin of approximately 0.23%. Gross profit is CNY 5.1 billion, yielding a gross margin of roughly 4.5%. The enterprise value to EBITDA ratio is negative at -328.17, reflecting low or negative EBITDA relative to the enterprise value. The price-to-book ratio is 2.15, and the EV-to-revenue ratio is 0.99.

Segment and geographic data are not provided in the available input, preventing a detailed analysis of revenue concentration or regional exposure. The company is classified as an integrated oil and gas entity, suggesting a diversified operational footprint across upstream and downstream activities, but specific segment contributions are absent from the dataset.

Growth trajectory analysis is limited by the absence of historical period data in the input. The financial snapshot provides only the latest normalized period figures, with no 5-year annual or 8-quarter quarterly trends available to assess revenue or net income momentum. Consequently, the direction of growth cannot be determined from the provided data.

Risk factors include medium liquidity risk and low dilution risk. A key flag indicates that net cash is negative after subtracting total debt, highlighting balance sheet pressure. The high debt-to-equity ratio of 2.75 and low current ratio of 0.55 further underscore financial leverage risks. Dilution risk is assessed as low, with basic and diluted shares outstanding being identical at 3.82 billion.

Recent events are reflected in analyst estimates, which show a mean price target of CNY 18.70, with all estimates (mean, median, high, low) converging at this value. The mean recommendation is 1.50, indicating a strong buy consensus, supported by 2 strong-buy and 2 buy ratings, with no hold ratings. Competitor context lists Chevron, Shell, and BP, but no specific comparative data is provided.

Analysts assign a strong buy rating with a mean price target of 18.7, implying 26% upside from the current market price of 14.84.

Operating income surged 598.8% year-over-year to 443.97 million CNY in FY2026, signaling a significant operational turnaround.

Gross profit improved to 5.07 billion CNY in FY2026, up from 4.55 billion CNY in FY2025, indicating better cost management.

Net income increased 10.4% year-over-year to 258.33 million CNY in FY2026, demonstrating modest profitability recovery.

Free cash flow stabilized with a negligible 0.1% year-over-year change in FY2026, suggesting cash burn is plateauing.

The company carries a high credit risk flag, reflecting significant concerns regarding its ability to meet debt obligations.

Revenue declined 3.1% annually over four years, dropping from 128.98 billion CNY in FY2022 to 113.53 billion CNY in FY2026.

The debt-to-equity ratio stands at 2.75, placing it in the bottom quartile compared to the 0.49 median of its peer cohort.

Operating and net margins are negative at -0.3% and -0.1% respectively, ranking in the bottom quartile of the Integrated Oil & Gas cohort.

Free cash flow remains deeply negative at -3.97 billion CNY in FY2026, indicating persistent cash generation issues.

Revenue ¥113.53B, −9,5% YoY; Operating income +598,8% YoY.

• ▍Revenue ¥113.53B, −9,5% YoY
• ▍Operating income +598,8% YoY
• ▍Net income +10,4% YoY
• ▍Free cash flow +0,1% YoY
• ▍Net margin 0.2%

Revenue ¥125.46B, −7,8% YoY; Operating income −85,0% YoY.

• ▍Revenue ¥125.46B, −7,8% YoY
• ▍Operating income −85,0% YoY
• ▍Net income −46,3% YoY
• ▍Free cash flow −2,2% YoY
• ▍Net margin 0.2%

Revenue ¥136.15B, −10,5% YoY; Operating income +138,2% YoY.

• ▍Revenue ¥136.15B, −10,5% YoY
• ▍Operating income +138,2% YoY
• ▍Net income +140,3% YoY
• ▍Free cash flow −11,5% YoY
• ▍Net margin 0.3%

Revenue ¥152.05B, +17,9% YoY; Operating income −125,9% YoY.

• ▍Revenue ¥152.05B, +17,9% YoY
• ▍Operating income −125,9% YoY
• ▍Net income −131,7% YoY
• ▍Free cash flow −65,0% YoY
• ▍Net margin -0.7%

Revenue ¥128.98B; Operating income ¥4.29B.

• ▍Revenue ¥128.98B
• ▍Operating income ¥4.29B
• ▍Net margin 2.6%