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SHANGHAI PETROCHEMICAL ANNOUNCES 1993 INTERIM RESULTS

 HONG KONG, Oct. 28 /PRNewswire/ -- Shanghai Petrochemical Company Limited today announces that the Company has experienced strong growth in the six months ended June 30, 1993. Turnover for the half year increased by 90.8 percent compared to the same period last year to RMB4,652,053,000 (equivalent: US$434,771,000). The net profit after tax was RMB573,893,000 (equivalent: US$53,635,000). This represents a 168 percent increase over the same period last year, and is 67.7 percent of the forecast profit of RMB848,311,000 for the full year ending December 31, 1993 set out in the prospectus for the issue of the new 'H' shares in July. Earnings per share for the six months were RMB0.143 (equivalent: US$0.013). (The Company's interim results were calculated in Renminbi according to International Accounting Standards.)
 As stated in the prospectus, the Board of Directors have declared a special interim dividend of RMB0.05 (unaudited equivalent: US$0.005) per share payable to China Petrochemical Corporation ("Sinopec"). This represents an aggregate dividend payment of RMB200,000,000 (equivalent: US$18,692,000) in respect of the six months ended June 30, 1993. Sinopec was the sole shareholder of the Company up to the half year ended June 30, 1993.
 The Company's excellent performance can be attributed to improved production efficiency and higher sales. Industrial output in the first half year registered a significant rise compared to the same period last year. The volume of processed crude oil grew by 35.81 percent to 2,466,000 tons, which led to a correspondingly strong performance in the output of related petroleum products.
 Production of ethylene, the principal raw material of petrochemical by-products, increased by 88,100 tons to 212,400 tons, representing a 70.79 percent increase over the previous period. Output of synthetic fibres and polyester rose by 24.9 percent to 266,100 tons, while plastics output increased 79,700 tons to 148,900 tons, up by over 100 percent compared to the same period in 1992.
 During the period, the third stage of the Company's construction program became fully operational. This includes a 300,000-ton ethylene unit and production units for monoethylene glycol, polypropylene, low density polyethylene and polyester filaments. Increases in utilization rates at all production units led to substantial improvements in operational efficiency, with the value of total industrial output for the facilities covered by the third stage rising by 153.42 percent over the same period last year. Additionally, no major repair work was required to facilities in the third stage during the period, thus helping to enhance production.
 Strong sales growth was also reported. Driven by China's economic expansion, demand for the Company's products continued to exceed levels of supply. Sales as a percentage of total production for the first half year averaged 99.85 percent, and peaked at 100.88 percent and 105.71 percent during the months of May and June respectively.
 The Company achieved a healthy growth in operating profits despite an increase in crude oil prices from an average of RMB458.2 per ton during the year ended December 31, 1992 to RMB660 per ton in the first six months of 1993. This was due to the reduced allocation (from 59 percent in 1992 to 37 percent in 1993) of the Company's products sold within the government plan and a corresponding increase in the proportion of the Company's products sold at market prices. In addition, the Company registered increases in the market prices of its products. The Company does not expect any further increases in the cost of crude oil for the remainder of the year.
 With the transition to joint stock status, the Company has strengthened its commitment to shareholders to upgrade its performance. Efforts continued to be made to improve operations with the goal of achieving further progress. As a result of increased flexibility and management control, operational efficiency was improved by decreasing the rate of consumption of raw materials and power.
 Quality control is another priority area and one which showed outstanding performance. Results from the Company's product audit program have been consistently satisfactory. All products monitored met their full technical requirements and showed stable improvement.
 The Company continues to implement strategies aimed at strengthening its marketing. It is also improving the balance between its domestic and export sales. To enable it to respond to rapid changes in the market, the Company is focusing production of petrochemical products where demand is greatest as well as developing new products.
 In July, Shanghai Petrochemical took a step forward to become a world-class company in the petrochemical industry. In the first global offering of its kind by a Mainland Chinese enterprise, the Company raised a gross amount of approximately US$342.5 million (HK$2.65 billion) through the issue of new 'H' shares which was underwritten principally by Merrill Lynch & Co. and Peregrine Capital Limited.
 The Company's 'H' shares are now listed on The Stock Exchange of Hong Kong Limited and in the form of American Depositary Receipts on the New York Stock Exchange under the symbol "SHI". The depositary for the ADR program is The Bank of New York. Each ADR represents 100 class 'H' ordinary shares. Trading in the Company's 'H' shares has been active since the offer.
 Looking ahead, the Company believes China's petrochemical sector is a sunrise industry and is optimistic about the specific opportunities it presents for Shanghai Petrochemical. The industry's development in the 1990s will continue to be driven by the phenomenal growth in the country's economy in recent years. Despite the measures recently introduced by the Chinese government to control the pace of economic growth, the Company believes that the industry is still regarded by the government as a key area for development in the production of raw materials. Demand for petrochemical products from other industrial sectors has grown faster than the economy as a whole, and should continue to do so in the foreseeable future.
 "Following an encouraging first half to the year, the Board of Directors is determined to continue its efforts to expand the Company's operations. The supply of crude oil is expected to remain stable in the coming six months; and major maintenance programs, launched in August and October, will assist the Company to achieve high utilization rates in all of its production units for the remainder of this year and into 1994. Demand for its products continues to be strong and prices are expected to remain at least at the same level as during the first six months of the year. Barring unforeseen circumstances and subject to the assumptions made in the new issue prospectus in July, the Company expects to achieve its forecast profit for the full year," said Mr. Wang Jiming, Chairman of the Board and President of the Company.
 Shanghai Petrochemical Company Limited is the largest petrochemical company and the ninth largest industrial enterprise in China. Located in Jinshanwei in the southwest of Shanghai, the Company is a highly integrated petrochemical complex which processes crude oil into a broad range of synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products.
 -0- 10/28/93
 /CONTACT: Wu Yixin of Shanghai Petrochemical Co., 011-852-543-8882 (c/o The Rowland Co.); or Corey Cutler of Dewe Rogerson Inc., 212-688-6840/
 /FIRST ADD -- TABULAR MATERIAL -- TO FOLLOW/


CO: Shanghai Petrochemical Company Limited ST: IN: CHM SU: ERN

LG -- NY029 -- 7758 10/28/93 09:32 EDT
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