Sinopec Shanghai Petrochemical Company Limited (SPTJF) 6-K Current report (foreign)

Exhibit 99.2

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Sinopec Shanghai Petrochemical Company Limited

中國石化上海石油化工股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China)

(Stock Code: 00338)

2023 FIRST QUARTERLY REPORT

This announcement is published simultaneously in Shanghai and Hong Kong. This announcement is published pursuant to the Rules Governing Listing of Stocks on Shanghai Stock Exchange in the People’s Republic of China. This announcement is published pursuant to the disclosure obligations under Rules 13.09 and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

1. IMPORTANT MESSAGE

1.1 The Board of Directors (the “Board”) and the Supervisory Committee of Sinopec Shanghai Petrochemical Company Limited (the “Company”, together with its subsidiaries, the “Group”) as well as its directors, supervisors and senior management warrant the truthfulness, accuracy and completeness of the information contained in the 2023 first quarterly report, and warrant that there are no false representations or misleading statements contained in or material omissions from this report and severally and jointly accept responsibility pursuant to such information.

1.2 Mr. Wan Tao, Chairman of the Company, Mr. Du Jun, executive director, deputy president and CFO, overseeing the accounting operations, and Ms. Yang Yating, person in charge of Accounting Department (Accounting Chief) and Director of Finance Department warrant the truthfulness, accuracy and completeness of the financial information contained in this first quarterly report.

1.3 The financial report of the Company’s 2023 first quarterly report was prepared under the China Accounting Standards for Business Enterprises and was unaudited.

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2. MAJOR ACCOUNTING DATA

2.1 Major Financial Report Items and Financial Indicators

Unit: RMB’000

	The reporting period		The corresponding period of the previous year				Increase/decrease during the reporting period as compared to the corresponding period of the previous year (%)
Item			Before adjustment		After adjustment		After adjustment
Revenue		21,978,009		26,006,070		26,006,070		-15.49	%
Net profit attributable to equity shareholders of the Company		-163,142		213,510		213,906		-176.27	%
Net profit attributable to equity shareholders of the Company excluding non-recurring items		-159,041		241,668		242,064		-165.70	%
Net cash flows generated from operating activities		-29,479		-1,785,568		-1,785,568		Not Applicable
Basic earnings per share (RMB/share)		-0.015		0.020		0.020		Not Applicable
Diluted earnings per share (RMB/share)		-0.015		0.020		0.020		Not Applicable
Return on net assets (weighted average) (%)		-0.623		0.700		0.702		Decreased by 1.33 percentage points

	As at the end of the reporting period		As at the end of the previous year				Increase/decrease at the end of the reporting period as compared to the end of the previous year (%)
			Before adjustment		After adjustment		After adjustment
Total assets		40,637,918		41,242,740		41,242,782		-1.47	%
Total equity attributable to equity shareholders of the Company		26,097,552		26,243,705		26,243,746		-0.56	%

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Reasons for retroactive adjustment or restatement

Since 1 January 2023, the Group has implemented the requirement of the “Accounting of deferred income tax related to assets and liabilities arising from an individual transaction not applicable to initial recognition exemption” under the “Interpretation of Accounting Standards for Business Enterprises No. 16” promulgated by the Ministry of Finance.

According to the provisions of Interpretation No. 16, if the individual transaction of the Group is not a business combination, or its occurrence does not affect the accounting profit nor taxable income (or deductible loss), and the initially recognized assets and liabilities result in equal taxable temporary difference and deductible temporary difference, the provisions of “Accounting Standards for Business Enterprises No. 18-Income Tax” on the exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets are not applicable. According to the “Accounting Standards for Business Enterprises No. 18-Income Tax” and other relevant regulations, as for the taxable temporary difference and deductible temporary difference arising from the initial recognition of assets and liabilities, the Group recognizes the corresponding deferred income tax liabilities and deferred income tax assets respectively when the transaction occurs.

The above regulations have come into effect on 1 January 2023. The Group has made retrospective adjustments to the individual transactions that occurred between 1 January 2022 and the date of initial implementation to which the regulations apply. For the lease liabilities and right-of-use assets recognized on 1 January 2022 due to the individual transactions subject to the regulations resulting in taxable temporary difference and deductible temporary difference, the Group adjusted the cumulative impact amount to the opening retained earnings and other related financial statement items of the earliest period presented in the financial statements in accordance with the regulations and the “Accounting Standards for Business Enterprises No. 18-Income Tax”.

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2.2 Excluded non-recurring items and amount

Unit: RMB’000

Item	Amount for the reporting period		Note
Earnings or losses on disposal of non-current assets		38	—
Government grants recognized in current profits and losses, except for those closely related to the regular operating of the Company in compliance with national policies and regulations, and continuously satisfying quotas or quantities according to certain standards		7,679	—
Other non-operating income and expenses other than those mentioned above		-5,695	—
Other earnings or losses meeting the definition of non-recurring earnings or losses		-5,417	-4,765 for dismissal welfare; -652 for discount loss of receivables
Less: Tax effect for the items above		-470	—
Effect on non-controlling interests (after tax)		-236	—
Total		-4,101	—

Explanations on defining the non-recurring earnings or losses items set out in the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public – Non-Recurring Earnings or Losses as recurring earnings or losses items

☐  Applicable    ☒  Not applicable

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2.3 Description of Substantial Changes in Major Financial Report Items and Financial Indicators

☒  Applicable    ☐  Not applicable

Item	Change (%)	Major reason
Net profit attributable to ordinary equity shareholders of the Company	-176.27%	During the reporting period, the sales volume of products decreased year-on-year and the investment income decreased.
Net profit attributable to ordinary equity shareholders of the Company excluding non-recurring items	-165.70%
Basic earnings per share (RMB/share)	Not Applicable
Diluted earnings per share (RMB/share)	Not Applicable
Net cash flows generated from operating activities	Not Applicable	—

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3. SHAREHOLDERS’ INFORMATION

3.1 Total Number of Shareholders and the Number of Preferred Shareholders with Voting Rights Restored and Shareholdings of the Top Ten Shareholders

Unit: Share

Number of shareholders as at the end of the reporting period 95,286 Total number of preferred shareholders with voting rights restored as at the end of the reporting period (if any) 0

	Shareholdings of the top ten shareholders
									Number of shares
				Percentage			Number		pledged, marked or frozen
				of total			of shares		Situation
	Type of	Number of		shareholding			with selling		of the
Name of shareholder	shareholder	shares held		(%)			restrictions		shares		Number
China Petroleum & Chemical Corporation	State-owned legal person		5,459,455,000		50.55	%		0		None		0
HKSCC (Nominees) Limited	Overseas legal person		3,426,998,030		31.73	%		0		None		0
HKSCC Limited	Overseas legal person		100,240,095		0.93	%		0		Unknown		—
Wang Lei	Domestic natural person		46,120,300		0.43	%		0		None		0
GF Fund – Agricultural Bank of China – GF CSI Financial Asset Management Plan	Others		45,222,300		0.42	%		0		None		0
Dacheng Fund – Agricultural Bank of China – Dacheng CSI Financial Asset Management Plan	Others		43,531,469		0.40	%		0		None		0
Southern Fund– Agricultural Bank of China – Southern CSI Financial Asset Management Plan	Others		43,083,700		0.40	%		0		None		0
Yinhua Fund– Agricultural Bank of China – Yinhua CSI Financial Asset Management Plan	Others		42,858,416		0.40	%		0		None		0
ICBC Credit Suisse Fund– Agricultural Bank of China – ICBC Credit Suisse CSI Financial Asset Management Plan	Others		41,906,900		0.39	%		0		None		0
Bosera Fund – Agricultural Bank of China – Bosera CSI Financial Asset Management Plan	Others		40,714,400		0.38	%		0		None		0

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Shareholdings of the top ten shareholders with unlimited conditions of sale
Name of shareholder	Number of liquidity shares holding unlimited conditions of sale	Type and quantity of shares
		Type of shares	Quantity
China Petroleum & Chemical Corporation	5,459,455,000	RMB common stocks		5,459,455,000
HKSCC (Nominees) Limited	3,426,998,030	Overseas listed foreign share		3,426,998,030
HKSCC Limited	100,240,095	RMB common stocks		100,240,095
Wang Lei	46,120,300	RMB common stocks		46,120,300
GF Fund – Agricultural Bank of China – GF CSI Financial Asset Management Plan	45,222,300	RMB common stocks		45,222,300
Dacheng Fund – Agricultural Bank of China – Dacheng CSI Financial Asset Management Plan	43,531,469	RMB common stocks		43,531,469
Southern Fund– Agricultural Bank of China – Southern CSI Financial Asset Management Plan	43,083,700	RMB common stocks		43,083,700
Yinhua Fund– Agricultural Bank of China – Yinhua CSI Financial Asset Management Plan	42,858,416	RMB common stocks		42,858,416
ICBC Credit Suisse Fund– Agricultural Bank of China – ICBC Credit Suisse CSI Financial Asset Management Plan	41,906,900	RMB common stocks		41,906,900
Bosera Fund – Agricultural Bank of China – Bosera CSI Financial Asset Management Plan	40,714,400	RMB common stocks		40,714,400
Explanation of the connected relationship or acting in concert relationship of the above shareholders	Among the above-mentioned shareholders, China Petroleum & Chemical Corporation, a state-owned legal person, does not have any connected relationship with the other shareholders, and does not constitute an act-in-concert party under the Administration Measures on Acquisition of Listed Companies. Among the above-mentioned shareholders, HKSCC (Nominees) Limited is a nominee and HKSCC Limited is the nominal holder of the Company’s Shanghai-Hong Kong Stock Connect. Apart from the above, the Company is not aware of any other connected relationships among the other shareholders, or whether any other shareholder constitutes an act-in-concert party under the Administrative Measures on Acquisition of Listed Companies.
Explanation of the top ten shareholders and the top ten shareholders of unrestricted shares engaging in margin financing and securities lending as well as margin and securities refinancing business (if any)	None

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4. OTHER REMINDERS

Other important information about the operation of the Company during the reporting period that investors should be reminded of

☒  Applicable    ☐  Not Applicable

On 25 March 2023, Shanghai Municipal People’s Government issued an approval for the “Investigation Report on the Explosion Accident on the No.1 Ethylene Glycol Plant of Shanghai Petrochemical Company Limited on 18 June”. According to the investigation, the No.1 ethylene glycol plant explosion general accident was a production safety liability accident in the Company on 18 June caused one death, one injury, and resulted in a direct economic loss of approximately RMB9,714,800. Please refer to the website of Shanghai Emergency Management Bureau for details.

5. QUARTERLY FINANCIAL REPORT

5.1 Type of audit opinions

☐  Applicable    ☒  Not applicable

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5.2 The financial report

CONSOLIDATED BALANCE SHEETS

31 March 2023

Prepared by: Sinopec Shanghai Petrochemical Company Limited

Unit: RMB’000     Audit type: unaudited

Items	As at 31 March 2023		As at 31 December 2022
Current assets:
Cash at bank and on hand		7,281,505		3,998,332
Account receivable		1,578,194		2,512,362
Receivables under financing		534,596		582,354
Prepayments		97,853		67,008
Other receivables		106,977		190,579
Inventories		5,490,113		7,294,060
Other current assets		675,132		1,121,187
Total current assets		15,764,370		15,765,882
Non-current assets:
Long-term equity investments		3,528,683		3,594,393
Other equity instrument investment		5,000		5,000
Investment properties		333,032		336,863
Fixed assets		13,196,880		12,195,527
Construction in progress		2,462,953		3,748,461
Right-of-use assets		14,805		16,085
Intangible assets		367,648		372,640
Long-term prepaid expenses		703,313		776,480
Deferred tax assets		998,600		991,892
Other non-current assets		3,262,634		3,439,559
Total non-current assets		24,873,548		25,476,900
Total assets		40,637,918		41,242,782

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Items	As at 31 March 2023		As at 31 December 2022
Current liabilities:
Short-term borrowings		5,048,000		1,550,000
Notes payable		267,815		40,951
Accounts payable		5,127,055		9,144,554
Contract liabilities		342,451		383,246
Employee benefits payable		584,476		317,891
Taxes payable		1,043,953		889,856
Other payables		1,074,350		1,618,352
Non-current liabilities due within one year		9,677		8,738
Other current liabilities		41,056		44,750
Total current liabilities		13,538,833		13,998,338
Non-current liabilities:
Long-term borrowing		700,000		700,000
Lease liabilities		7,556		7,513
Deferred revenue		133,113		134,608
Deferred tax liabilities		32,389		30,898
Total non-current liabilities		873,058		873,019
Total liabilities		14,411,891		14,871,357
Owners’ equity (or shareholders’ equity):
Paid-in capital (or share capital)		10,799,286		10,823,814
Capital surplus		609,166		610,327
Less: Treasury stock		—		25,689
Other comprehensive income		-806		-806
Specific reserve		257,366		240,418
Surplus reserve		6,672,634		6,672,634
Undistributed profits		7,759,906		7,923,048
Total equity attributable to owners (or shareholders) of the Company		26,097,552		26,243,746
Non-controlling interests		128,475		127,679
Total owners’ equity (or shareholders’ equity)		26,226,027		26,371,425
Total liabilities and owners’ equity (or shareholders’ equity)		40,637,918		41,242,782

Person in charge of the Company: Wan Tao Person in charge of accounting: Du Jun Person in charge of accounting department: Yang Yating

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CONSOLIDATED INCOME STATEMENTS

January to March 2023

Prepared by: Sinopec Shanghai Petrochemical Company Limited

Unit: RMB’000     Audit type: unaudited

Items	First Quarter of 2023		First Quarter of 2022
1. Total revenue		21,978,009		26,006,070
Including: Revenue		21,978,009		26,006,070
2. Total operating cost		22,029,839		25,599,241
Including: Cost of sales		18,612,145		21,332,112
Taxes and surcharges		2,855,798		3,699,011
Selling and distribution expenses		71,089		92,808
General and administrative expenses		521,335		610,339
R&D expenses		30,776		11,867
Financial expenses		-61,304		-146,896
Add: Other income		5,179		2,828
Investment income (“-” to indicate loss)		-66,362		-2,666
Profit arising from changes in fair value (“-” to indicate loss)		—		-17,101
Credit impairment losses (“-” to indicate loss)		311		15
Asset impairment losses (“-” to indicate loss)		47,801		76,919
Gains on disposal of assets (“-” to indicate loss)		—		-1,063
3. Operating profit (“-” to indicate loss)		-161,125		311,893
Add: Non-operating income		2,926		8,268
Less: Non-operating expenses		6,083		7,113
4. Total profit (“-” to indicate loss)		-164,282		313,048
Less: Income tax expenses		-1,936		97,826
5. Net Profit (“-” to indicate loss)		-162,346		215,222
(1) Classification by business continuity
1. Profit from continuing operations (“-” to indicate loss)		-162,346		215,222
(2) Classification by ownership
1. Attributable to equity shareholders of the Company (“-” to indicate loss)		-163,142		213,906
2. Non-controlling interests (“-” to indicate loss)		796		1,316

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Items	First Quarter of 2023		First Quarter of 2022
6. Other comprehensive income, net of tax		—		205,796
(1) Other comprehensive income, net of tax attributable to owners of the Company		—		205,796
Items that may be reclassified to profit or loss		—		205,796
(a) Items that may be reclassified to profit or loss using the equity method		—		-22,278
(b) Cash flow hedging reserves		—		228,074
7. Total comprehensive income		-162,346		421,018
(1) Attributable to owners of the Company		-163,142		419,702
(2) Attributable to non-controlling interests		796		1,316
8. Earnings per share:
(1) Basic earnings per share (RMB/share)		-0.015		0.020
(2) Diluted earnings per share (RMB/share)		-0.015		0.020

Person in charge of	Person in charge of	Person in charge of
the Company:	accounting:	accounting department:
Wan Tao	Du Jun	Yang Yating

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CONSOLIDATED CASH FLOW STATEMENTS

January to March 2023

Prepared by: Sinopec Shanghai Petrochemical Company Limited

Unit: RMB’000     Audit type: unaudited

Items	First Quarter of 2023		First Quarter of 2022
1. Cash flows from operating activities:
Cash received from sales of goods or rendering of services		24,882,513		27,392,826
Tax refund received		46,508		22,555
Cash received relating to other operating activities		45,587		52,527
Sub-total of cash inflows		24,974,608		27,467,908
Cash paid for goods and services		21,569,485		22,833,131
Cash paid to and on behalf of employees		709,331		666,825
Payments of taxes and surcharges		2,570,157		5,589,134
Cash paid relating to other operating activities		155,114		164,386
Sub-total of cash outflows		25,004,087		29,253,476
Net cash flows generated from operating activities		-29,479		-1,785,568
2. Cash flows from investing activities:
Cash received from returns on investments		—		550,375
Net cash received from disposal of fixed assets, intangible assets and other long-term assets		4,020		3,343
Cash received relating to other investing activities		17,531		1,071,891
Sub-total of cash inflows		21,551		1,625,609
Cash paid to acquire fixed assets, intangible assets and other long-term assets		408,058		566,512
Cash paid for investment		—		1,283,500
Cash paid to other related investment activities		—		2,600,000
Sub-total of cash outflows		408,058		4,450,012
Net cash flows generated from investment activities		-386,507		-2,824,403

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Items	First Quarter of 2023		First Quarter of 2022
3. Cash flows from financing activities:
Cash received from borrowings		10,518,000		3,455,000
Cash received from short-term bonds		—		2,999,975
Sub-total of cash inflows		10,518,000		6,454,975
Cash repayments of borrowings		7,020,000		1,955,200
Cash paid for distribution of dividends or profits and interest expenses		29,235		11,946
Cash and interest repaid for lease liabilities		—		—
Cash paid for other financing activities		4,107		2,660
Sub-total of cash outflows		7,053,342		1,969,806
Net cash flows generated from financing activities		3,464,658		4,485,169
4. Effect of foreign exchange rate changes on cash and cash equivalents		15,320		168
5. Net increase in cash and cash equivalents		3,063,992		-124,634
Add: Cash and cash equivalents at beginning of the reporting period		889,413		5,112,010
6. Cash and cash equivalents at end of the reporting period		3,953,405		4,987,376

Person in charge of	Person in charge of	Person in charge of
the Company:	accounting:	accounting department:
Wan Tao	Du Jun	Yang Yating

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5.3 Adjustments to financial report at the beginning of the year relating to the initial adoption of the new accounting standards or interpretation of standards since 2023

☒  Applicable   ☐  Not applicable

Explanation of reasons for adjustments on the financial statements at the beginning of the year

In 2023, the Group has implemented the relevant requirements and guidelines of the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance in recent years:

Requirement of the “Accounting of deferred income tax related to assets and liabilities arising from an individual transaction not applicable to initial recognition exemption” in Interpretation No. 16.

(a) Requirement of the accounting of deferred income tax related to assets and liabilities arising from an individual transaction not applicable to initial recognition exemption

According to the provisions of Interpretation No. 16, if the individual transaction of the Group is not a business combination, or its occurrence does not affect the accounting profit nor taxable income (or deductible loss), and the initially recognized assets and liabilities result in equal taxable temporary difference and deductible temporary difference, the provisions of “Accounting Standards for Business Enterprises No. 18-Income Tax” on the exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets are not applicable. According to the “Accounting Standards for Business Enterprises No. 18-Income Tax” and other relevant regulations, as for the taxable temporary difference and deductible temporary difference arising from the initial recognition of assets and liabilities, the Group recognizes the corresponding deferred income tax liabilities and deferred income tax assets respectively when the transaction occurs.

The above regulations have come into effect on 1 January 2023. The Group has made retrospective adjustments to the individual transactions that occurred between 1 January 2022 and the date of initial implementation to which the regulations apply. For the lease liabilities and right-of-use assets recognized on 1 January 2022 due to the individual transactions subject to the regulations resulting in taxable temporary difference and deductible temporary difference, the Group adjusted the cumulative impact amount to the opening retained earnings and other related financial statement items of the earliest period presented in the financial statements in accordance with the regulations and the “Accounting Standards for Business Enterprises No. 18-Income Tax”.

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(b) Impacts of the change on the comparative financial report

The impacts of the above change in the accounting policy on net profit for the three months ended 31 March 2022 and owners’ equity at the beginning and the end of 2022 are summarized as follows:

Unit: RMB’000

Items	Net profit for the three months ended 31 March 2022		Equity at the end of 2022		Equity at the beginning of 2022
Deferred income tax relating to assets and liabilities arising from an individual transaction does not apply to the impact of initial recognition exemptions		372		39		-67
Adjusted net profit and equity		215,222		26,371,425		30,395,364

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The effects on the consolidated balance sheets as at 31 December 2022 are analysed as follows:

CONSOLIDATED BALANCE SHEETS

Unit: RMB’000

Items	Before adjustment as at 31 December 2022		After adjustment as at 31 December 2022		Adjustment
Non-current assets:
Deferred tax assets		991,850		991,892		42
Total non-current assets		25,476,858		25,476,900		42
Total assets		41,242,740		41,242,782		42
Non-current liabilities:
Deferred tax liabilities		30,895		30,898		3
Total non-current liabilities		873,016		873,019		3
Total liabilities		14,871,354		14,871,357		3
Shareholders’ equity:
Surplus reserve		6,672,639		6,672,634		-5
Undistributed profits		7,923,002		7,923,048		46
Total equity attributable to owners (or shareholders) of the Company		26,243,705		26,243,746		41
Non-controlling interests		127,681		127,679		-2
Total shareholders’ equity		26,371,386		26,371,425		39
Total liabilities and shareholders’ equity		41,242,740		41,242,782		42

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The effects on the consolidated income statements for the three months ended 31 March 2022 are analysed as follows:

CONSOLIDATED INCOME STATEMENTS

Unit: RMB’000

Items	Before adjustment for the three months ended 31 March 2022		After adjustment for the three months ended 31 March 2022		Adjustment
Income tax expenses		98,198		97,826		-372
Net Profit
(1) Classification by business continuity
1. Net profit from continuing operations		214,850		215,222		372
(2) Classification by ownership
1. Attributable to equity shareholders of the Company		213,510		213,906		396
2. Non-controlling interests		1,340		1,316		-24
Total comprehensive income		420,646		421,018		372
Attributable to equity owners of the Company		419,306		419,702		396
Attributable to non-controlling interests		1,340		1,316		-24
Earnings per share
(1) Basic earnings per share (RMB)		0.020		0.020		—
(2) Diluted earnings per share (RMB)		0.020		0.020		—

By Order of the Board

Sinopec Shanghai Petrochemical Company Limited

Liu Gang

Joint Company Secretary

Shanghai, the PRC, 26 April 2023

As at the date of this announcement, the executive directors of the Company are Wan Tao, Guan Zemin, Du Jun and Huang Xiangyu; the non-executive directors of the Company are Xie Zhenglin and Peng Kun; and the independent non- executive directors of the Company are Li Yuanqin, Tang Song, Chen Haifeng, Yang Jun and Gao Song.

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