Photo/VCG

March 29 (NBD) – In response to a strategic investment of Saudi Aramco, Rongsheng Petrochemical (SZ002493) on March 28 said that the two sides are complementary upstream and downstream players and strategic cooperation can achieve resource sharing.

At the communication meeting, Rongsheng Petrochemical said that from a historical point of view, the equity trading price of 24.3 yuan/share is not a very high price for the company, and the company's share price once reached 31 yuan/share. 

"Saudi Aramco has hired well-known intermediaries to conduct a systematic investigation of Rongsheng Petrochemical and the transaction price is also reached after consultation between the two sides." Rongsheng Petrochemical said.

Following the news, shares of Rongsheng Petrochemical continued to surge to the daily limit (10%) on Wednesday.

Photo/East Money Information

Rongsheng Petrochemical revealed that Saudi Aramco had pointed out in its communication meeting that Rongsheng Petrochemical's overall chemical conversion rate had reached more than 65%, which led the industry globally. In the future, with the gradual commissioning of high-end new material projects, the company's chemical conversion rate can even reach more than 80%.

According to Rongsheng Petrochemical, the company has the world's largest polyester industry chain and is building the largest engineering plastics industry chain in the country (or the top-ranking plastics industry chain in the world). At the same time, the company is developing new energy material-related industry chains and has the top-ranked polyolefin industry chain in China.

Aramco is to sell 480,000 barrels a day of crude oil to Rongsheng's 800,000-barrel-a-day refinery in the eastern province of Zhejiang over 20 years, according to an exchange filing from the Shenzhen-listed company. Aramco will provide a credit line of $800 million for that, which is good for Rongsheng Petrochemical's cash flow.

As a global oil giant, Saudi Aramco has a mature sales network, which is another factor valued by Rongsheng Petrochemical. Rongsheng Petrochemical believes that the company can directly use Saudi Aramco's global channels, and Saudi Aramco can also use the company's domestic sales network for chemical sales.