Oriental Shenghong 13.3 billion Layout Aromatics New Materials: Strategic Analysis and Market Impact

1. Project Overview: Against the trend, bet on high-end new materials.

On April 11, 2026, China's private refining and chemical giant Dongfang Shenghong (000301.SZ) announced that its third-level wholly-owned subsidiary Lianyungang Hongke New Materials Co., Ltd. signed a cooperation agreement with Lianyungang Xuwei New District Management Committee to invest 13.33 billion yuan to build an aromatic hydrocarbon industry chain quality improvement and efficiency project, located in Lianyungang Xuwei New District, a national petrochemical industry base, with phased investment. The construction is expected to be completed within 2 to 3 years.

The project plans to build 10 sets of key equipment, with core production capacity including: 150000 tons/year TDI, 50000 tons/year HDI, 300000 tons/year PC, 240000 tons/year caustic soda, 240000 tons/year bisphenol A and supporting facilities. The three industrial chain extension paths are clear: polyurethane raw materials (TDI/HDI), high-end engineering plastics (PC), and caustic soda/bisphenol A integration and synergy, together constitute the "1 N" development strategy of Oriental Shenghong to the downstream high value-added end of the system extension.

It is worth noting that these 0.1 billion investment decisions occurred in a special window under pressure on the company's performance-as of the end of the third quarter of 2025, the total debt of Oriental Shenghong was as high as 175 billion yuan; the 2025 performance forecast shows that although the net profit of the parent is expected to turn a profit, but the net profit after deduction is still in a state of loss. Against the trend of heavy bets, reflecting the management's strategic judgment on the current industry trough: active layout of high value-added products, is through the cycle, improve the full-cycle profitability of the active choice.

Competition Logic and Market Impact of the Three Industrial Chains in 2.

Polyurethane track: cost advantage cut into the tight supply and demand market. TDI and HDI are the core raw materials for the polyurethane industry. At present, global polyurethane demand continues to grow, and some overseas production capacity has been cleared, resulting in a tight supply phase. Oriental Shenghong relies on "crude oil & rarr; p-xylene (PX)& rarr; pure benzene" upstream full-chain raw material self-sufficiency capacity, in the cost side has significant competitive barriers. The new capacity of 150000 tons/year TDI and 50000 tons/year HDI will have a substantial impact on the supply and demand pattern of TDI/HDI in Asia and the world in the next 2 to 3 years. Overseas traders and purchasers need to study the potential downward pressure of medium-term pricing center in advance.

High-end PC track: systematic breakthrough of foreign monopoly.300000 tons/year PC device is equipped with 240000 tons/year bisphenol A to get through "bisphenol A & rarr;PC & rarr; Modified" complete chain. PC is widely used in electronics, automobiles, optics and other fields. High-end products have been dominated by foreign capital for a long time, and the Chinese market is highly dependent on imports. Oriental Shenghong's move is intended to compete for domestic high-end PC market share, if the product quality reaches the optical or electronic certification standards, will form a direct impact on the existing import supply pattern. For overseas suppliers of PC, the progress of this capacity delivery and the breakthrough time point of certification are competitive early warning signals that need to be tracked.

Integrated synergy: cost and supply chain dual optimization. This layout and Oriental Shenghong existing polyether polyols and other products to form a synergy, strengthen the "olefins, aromatics" double hydrocarbon industry pattern. The integration of the whole industry chain brings the optimization of logistics, raw materials and capital costs, and the supply chain toughness is significantly higher than that of a single product-based enterprise, which helps to maintain the stable operation of high load in the cycle of sharp fluctuations in raw material prices.

3. risk research: financial pressure and overcapacity double test

the risk of expansion against the trend can not be ignored, the industry chain participants have important reference value.

one of them, capacity concentration release risk: TDI, PC and other products in China has a number of projects under construction, Oriental Shenghong new capacity if the time window overlaps with other expansion plans, may accelerate the oversupply, suppress product prices, affecting the entire Asian market pricing center.

Second, financial execution risk: In the context of hundreds of billions of debt, how to balance 13.3 billion yuan of capital expenditure and daily operating cash flow is the core challenge that Oriental Shenghong must face. If there is pressure on the capital chain, the project schedule may be delayed, which will instead provide a breathing window for existing TDI and PC suppliers.

comprehensive judgment the layout of Oriental Shenghong is a representative case of China's private refining enterprises transforming to new materials, and its strategic direction is in line with the long-term trend of "removing low-end production capacity and making up for high-end shortcomings" in China's chemical industry. It is recommended that traders, manufacturers and supply chain practitioners focus on tracking the medium-term supply and demand balance evolution of TDI, HDI and PC, as well as the actual progress of the phased construction of Oriental Shenghong, which will be the key variable to judge the pricing trend of the relevant varieties from 2027 to 2028.