March 21st 2015 Hong Kong
2015 Annual Results Presentation
Sinopec Engineering (Group) Co., Ltd.
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Disclaimer
1
Company Overview
Operation Overview
Financial Performance
2
Contents
Company Overview
Improve core
competitiveness
Better
understanding
customer demand
Generate stable
demand
Provide high-quality
equipment
Provide stable, high
quality construction
services
Generate stable
demand
EPC Constructing
Equipment Manufacturing
Construction
Our licensing business
further facilitates our
engineering, consulting and
EPC contracting business.
Clean Energy Oil Refining Inorganic
Chemicals
The Environment,
Energy-Saving
and Others
New Coal
Chemicals
3
An International Oil Refining and Chemical Engineering Company with the Leading Edge in the PRC
Leading
Engineering
and R&D
Capacity with
Technological
Strength
Petrochemical
En
gin
ee
rin
g, C
on
su
ltin
g a
nd
Lic
en
sin
g
Unit: RMB billion
The GDP Growth of the PRC Remains Moderate
FAIs for the PRC Oil Refining and
Chemical Industry
Key Economic Status and
Industry Indicators in the 1H2015
Urbanization and Industrialization
Investment Opportunity
Outdated Refinery Updating
Acceleration
Petrochemical Products
Moving to High-End
Environment and Energy
Saving Market Possess
Broad Prospects
4
Difficulties Implies Long-Term Growth
Unit: RMB billion
China’s gross GDP China’s GDP Growth Global GDP Growth
FAIs for China oil refining and chemical engineering industry as a percentage of GDP
Source: SSB, NDRC, MIIT, CPCIF and ICIS
The GDP growth of the PRC was 6.9% during
2015, domestic economy remaining steady
growth.
In 2015 , the Chinese domestic refined oil
output was 300 million tonnes (an increase of
5.4%). The estimated amount of refined oil
apparent consumption was 276 million tonnes
, representing an increase of 1.2% of which
the estimated amount of gasoline was 110
million tonnes(an increase of 7.0%).
In the 2015, the cumulative Chinese domestic
ethylene output was 17.15 million tonnes, an
increase of 1.6% . The amount of ethylene
apparent consumption was 18.89 million
tonnes, representing an increase of 1.9%.
In 2015, the oil and chemical industry fixed
asset investment (“FAI”) totaled around RMB
2,320 billion, an decrease of 0.5%.
2,000
2,600
2013 2018E 2014
2,330
0.00%
6.00%
12.00%
2012 2013 2014 2015 2016E
0
40,000
80,000
120,000
2012
1,475
2017E 2018E 2015
2,318
“Belt and Road”(一带一路) Projects are Approaching
5
Aromatics Project and FCC Project
of Kazakhstan Atyrau Refinery
Saudi Sulfuric Acid and Power Plant EPC Project
Saudi Phosphate Fertiliser Utilities Project
Kuwait Al-Zour New Oil Refinery
Malaysia Oil Refining Project
Thailand PP Project
“The Silk Road Economic Belt”
“The 21th Century Maritime Silk Road”
“SEG Overseas Project”
SEG overseas development agrees with the “Belt and Road”.
SEG follow closely to the “Belt and Road ” and its implementation.
Some “Belt and Road ” projects are expected to reach substantive milestones.
Operation Overview
2014 2015
42,507 36,407
6,839
9,091
Revenue(RMB mn)
7
Revenue by
Domestic/Overseas (RMB mn)
13.9% (Overseas)
86.1% (Domestic)
20.0% (Overseas)
80.0% (Domestic)
Steady Progresses Made in Reform, Development, Production and Operations
on-site work has commenced
and the progress, cost,
quality and safety of this
project were under control
Eight tenths of the
overall progress of the
project had been
completed
U.S. JUMBO PTA and PET
Project
Zhongtian Hechuang
Coal Chemical Project
Eight tenths of the overall
progress of the project has
been completed
Over two tenths of the
overall progress has been
completed
Six tenths of the overall
progress of the project has
been completed
Handover of the project
is finished
Inner Mongolia
Sinocoal Plastic Project
The handover for the
project has been fulfilled
and all units have been
put into operation.
Aromatics Project of
Kazakhstan Refinery
2014 2015
49,346 45,498
Malaysia Oil Refining
Project Guangxi LNG Project
Tianjin LNG Project
Seven tenths of the
overall progress of the
project has been
completed.
FCC Project of Kazakhstan
Atyrau Refinery
The detailed design of
project has been started,
critical equipment requisition
has been commenced
Kuwait Oil Refining Project
26,640 32,951
23,600 22,731
47,262 37,346
6,420 18,072
6,515 6,936
82,080 89,776
15,191
14,273 137
115
By Business Segment (RMB mn) By Industry Sector (RMB mn)
8
Backlog Grow Steadily
2015/12/31
80.8%
12.9%
6.2%
0.1%
111,100 111,100
2015/12/31
33.6%
16.2%
20.5%
29.7%
2014/12/31
79.0%
14.6%
6.3%
0.1%
103,922 103,922
2014/12/31
45.5%
6.2%
22.7%
25.6%
Engineering, consulting and licensing 、 EPC contracting
Construction Equipment manufacturing
Oil refining Petrochemicals New coal chemicals Other industries
17,894 13,995
12,336
11,112
23,041
7,516
7,429
20,053
4,110 3,047
38,173 35,535
18,299
13,996
118
98
By Business Segment (RMB mn) By Industry Sector (RMB mn)
52,676
2015
67.5%
26.5%
5.8%
0.2%
9
New Contracts Practically Achieved the Target for 2015
52,676
2015
26.6%
21.0%
14.3%
38.1%
29.5%
38.0%
12.2%
60,700 60,700
2014 2014
62.9%
30.1%
6.8%
0.2%
20.3%
Engineering, consulting and licensing 、 EPC contracting
Construction Equipment manufacturing
Oil refining Petrochemicals New coal chemicals Other industries
Market Development Braved Difficulties
10
Tianjin LNG
Project
Maoming
Ethylene Oxide
Project
Saudi Phosphate
Fertiliser Project
Kuwait Oil
Refining Project
Thailand PP
Project Guangxi LNG
Project
Shenhua Coal
Direct to Liquids
Project
Chongqing LNG
Liquefaction
Project
Shenhua Ningxia
Coal Polyethylene
Project
Oil Refining
Petrochemical
New Coal Chemical
Others
• Tests have been completed for the Fluidized-bed Methanol To Gasoline (FMTG) pilot device; detail design of the project has been generally
completed for the R&D project of using biological fluidized bed to treat PTA sewage; the pilot project of moving bed is in full-scale installation and
construction. The technical plan of development and industrial test project of the advanced delayed coking process (ADCP) with higher liquid yield
has passed review and the experimental base has been ascertained for the project. the second-generation technology for the refinery corrosion
protection, the researches on the anti-corrosion technology for the use of syngas to ethylene glycol unit, the anti-corrosion plan and materials
selection studies for the pulverized coal gasification unit and pipeline are in orderly progress;
• Steady progress of the collaborative R&D projects: the R&D center carried out different forms of R&D activities with the subsidiaries to support the
enhancement of their engineering technology in the aspects of the R&D on packaged technology, engineering and technical services. All of the 29
projects are operating well and have been showing the preliminary benefits of synergy.
Technological innovation of Luoyang Technology Research and Development Center (R&D Center) achieved effect.
Development of the new technology for medium-low-temperature extraction of phenol from coal tar and hydrogenation for making clean fuels:
Detailed design is underway for the hydrocracking device of coal tar suspension bend of Inner Mongolian Qinghua Group with a capacity of 500
Ktpa. The compilation of process package has been completed for 4 million Nm3/d SNG.
The packaged technological development has been completed for the two projects of packaged process for fluidized bed polyethylene in gas-liquid
state and the industrial application of IHCC technology for prolific light oil, with the packaged technologies having been in the stage of promotion. As
for the development of packaged technology for fluid bed residual hydrogenation and for high-quality needle-like cokes and industrial testing for
hydrogenated production of China V RS-2200 low-cost diesel fuel, their technical stability has been verified and conditions are available for
promotion thereof.
As packaged technologies for the pure epoxy ethane, the SE coal slurry gasification, the large LNG receiving terminals, the premium
hydroisomerization dewax base oil, their principal parts have been completed, which have entered the stage of construction.
Steady progress of the R&D of major technologies developed along with the key projects.
11
Achieving Numerous Fruitful Results in Technology Innovation
On 8th January 2016, at the National Science and Technology Awards Conference , the project “Development and Application
of Complete Set of Technology for Efficient and Environmental-Friendly Aromatics” engaged by the Group won the 2015
National Special Award for Scientific and Technological Progress. In the project, the Group made outstanding contributions in
aspects such as innovations in process and engineering technology, energy utilisation, smart control, safety and
environmental protection and work implementation through the pioneering work it did in green new technology for refinement
of raw materials, new molecular sieve materials of efficient transformation and separation, and the new technology for in-
depth integration of aromatics complex that can substantially lower energy consumption, innovative integrated control
methods, design methods and manufacturing processes, which achieved smart control, the long-cycle essential safety of the
unit, localization of key equipment and other targets. The technological achievement has markedly improved China’s
technology for the production of aromatics and its international competitiveness.
Won the 2015 National Special Award for Scientific and Technological Progress
Vision:Establishing
World Class
Engineering Company
12
Business Prospects
Continuously Promote In-depth Reform and Accelerate the Optimisation
of Internal Resources.
Exploring Transformational Development To Open Up New Business
Scopes And Modes.
Strengthen Process Management and Project Control , Take Multiple
Measures Simultaneously, and Reduce Cost While Increasing Efficiency.
Capture the Strategic Opportunity Of The “Belt and Road” Initiative for
Development.
Focus On Advancing Technology Progress To Maintain And Increase
Technology Leading Advantages.
Vigorously Exploit Environmental Protection and Energy Saving Sectors,
and Create New Business Growth .
Establish Modern Human Resource Management System and
Management Incentive Mechanism.
Set up an Integrated Management Information System
Financial Performance
Financial Overview
Dec 31st 2015
29,212
22,869
22,873
Dec 31st 2014
58,404
33,766
24,635
24,639
(RMB million)
Equity Attributable to Shareholders of the Company
Total Assets
Total Liabilities
Net Assets
52,085
Operation Performance Indicators
Assets and Liabilities
Other Key Financial Indicators
14
Gross Profit
ROA1
ROE2
Net Profit Margin
2015 2014
ROIC3
12.7%
7.0%
15.3%
7.1%
15.3%
13.5%
6.0 %
7.3 %
13.5%
Dividend 0.297
2015 2014
2015
45,498
6,157
3,845
3,318
2014 Change Rate
(7.8%)
(2.1%)
(4.8%)
(4.9%)
(RMB/Share) Change Rate
(4.8%)
Operational Profit
Net Profit
Gross Profit
Revenue 49,346
6,291
4,039
3,490
0.312
12.1%
7.7%
15.6%
7.7%
Change Rate
13.5%
(RMB million)
Notes: 1. ROA=Net Profit/((Opening Balance of Total Asset + Closing Balance of Total Asser)/2)
2. ROE=Net Profit/Closing Balance of Total Equity
3. ROIC=EBIT x(1-Effective Tax rate)/ (Closing Balance of Total Interest Bearing Debt- Credit Loans + Closing Balance of Total Equity)
2013 2014 2015
12,299 10,007
7,683
16,703
16,011
11,983
8,855 14,938
17,432
5,715
8,390
8,400
2013 2014 2015
4,354 3,645 2,626
23,560 30,132
27,838
15,215
15,325
14,914
497
244
120
By Industry Sector (RMB mn)
15
Revenue
5.3%
56.5%
36.8%
1.4%
38.3%
26.3%
16.9%
18.5%
By Business Segment (RMB mn)
43,572 49,346 45,498 43,572 49,346 45,498
6.8%
56.2%
35.7%
1.3% 17.0%
30.3%
32.4%
20.3%
Engineering, consulting and licensing 、 EPC contracting
Construction Equipment manufacturing Oil refining Petrochemicals New coal chemicals Other industries
Note: Total amounts of revenue are after inter-segment elimination;
2013 2014 2015
2,017 1,597
926
3,312 3,590
3,848
1,079 1,072 1,242
31
2013 2014 2015
3,657 3,490
3,318
Gross Profit (RMB mn) and Gross Profit Margin Net Profit (RMB mn) and Net Profit Margin
16
8.4% 7.1%
Gross Profit and Gross Profit Margin, Net Profit and Net Profit Margin
62.5%
15.0%
20.2%
2.3%
6,406 6,291 6,157
7.3%
3,657 3,490 3,318
12.7% 14.7%
13.5%
0.5%
17.0%
57.1%
25.4%
Engineering, consulting and licensing 、 EPC contracting
Construction Equipment manufacturing
Gross profit margin
Net profit margin
Total Assets (RMB mn) Equity Attributable to Shareholders of the Company
(RMB mn)
17
Total Assets and Equity
2013/12/31 2014/12/31 2015/12/31
47,365 52,085
58,404
2013/12/31 2014/12/31 2015/12/31
20,977 22,869
24,635
Current Ratio
Asset-Liability Ratio Operating Current Liabilities/Total Liabilities
Note: operating current liability includes notes and trade payables, other payables and amount due to customers for contract work.
Quick Ratio
18
Assets Structure
2013/12/31 2014/12/31 2015/12/31
55.7% 56.1% 57.8%
2013/12/31 2014/12/31 2015/12/31
88.9% 89.4% 90.4%
2013/12/31 2014/12/31 2015/12/31
1.7 1.7 1.6
2013/12/31 2014/12/31 2015/12/31
1.6 1.6 1.6
Net Cash Flow Generated for Operating Activities
(RMB mn) Cash and Cash Equivalent (RMB mn)
19
Cash Flow
2013 2014 2015
-86
333
5,793
2013 2014 2015
5,514
9,182
11,406
Turnover Days of Notes and Trade Receivables Turnover Days of Notes and Trade Payables
Operating Cycle Turnover Days of Inventories
Note: Operating cycle= Turnover days of notes and trade receivables + Turnover days of inventories
Unit: Day Unit: Day
Unit: Day Unit: Day
20
Capital Turnover
2013 2014 2015
55 67
92
2013 2014 2015
91 95
134
2013 2014 2015
64 79 108
2013 2014 2015
10 12
16
创建世界一流工程公司 Build a World-Class Engineering Company
打造更美好的世界 Engineering a better world