Economic Observation Network Shanghai Petrochemical Corporation (00338. HK) has released its 2026 interim report, achieving a turnaround from losses to profits in the first half of the year, but there are also related operational concerns.

Performance and business situation:
In the first half of the year, the net profit attributable to the parent company was 300 million yuan, compared to a loss of 462 million yuan in the same period last year. The core engine was a 21.87% increase in revenue from chemical products (10.403 billion yuan), but refining products were dragged down by a decline in sales (finished oil production decreased by 12.8% year-on-year) On the surface, there are hidden concerns - the net outflow of operating cash flow was 841 million yuan (year-on-year -20.841%), and the provision for inventory depreciation was 545 million yuan, both of which are eroding the quality of profits.

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