海 外 公 司 （ 中 国 香 港 ） 国泰君安版权所有发送给上海东方财富金融数据服务有限公司.东财接收研报邮箱.ybjieshou@eastmoney.com p1 海外订单高增速，派息金额与比例双增长 中石化炼化工程(2386) [Table_Industry] 石油 [Table_Invest] 评级： 增持 ——中石化炼化工程 2024 年中报业绩点评 股票研究 /[Table_Date] 2024.08.20 | --- | --- | --- | --- | |----------|-------------------|----------------------------|----------------------------| | | 孙羲昱(分析师) | 杨思远(分析师) | 陈浩越(研究助理) | | | 021-38677369 | 021-38032022 | 021-38031035 | | | sunxiyu@gtjas.com | yangsiyuan026856@gtjas.com | chenhaoyue028692@gtjas.com | | 登记编号 | S0880 ...

Investment Rating - The report maintains a "Buy" rating for Sinopec Engineering (2386.HK) with a current price of HKD 5.70 [2] Core Views - The company achieved a record high in new contract signing for H1 2024, with a significant increase in interim dividend payout ratio [5][6] - The company reported a revenue of CNY 28.6 billion for H1 2024, representing a year-on-year growth of 15%, and a net profit of CNY 1.319 billion, up by 0.12% [3][4] - The company is focusing on high-quality development and optimizing its capital structure, maintaining a stable debt-to-asset ratio of 61.6% as of June 30, 2024 [4] Summary by Sections Revenue Performance - The company reported a revenue of CNY 285.53 billion for H1 2024, with a net profit of CNY 13.19 billion, indicating stable growth amidst challenges in the global economy and domestic chemical market [4] New Contracts and Market Expansion - New contracts signed in H1 2024 reached CNY 500.66 billion, a year-on-year increase of 32.7%, with domestic contracts at CNY 331.13 billion (up 10.6%) and overseas contracts approximately USD 2.354 billion (up 117.8%) [5] - The company is diversifying its contract portfolio, with significant contributions from various sectors including refining and new coal chemical projects [5] Dividend and Share Buyback - The interim dividend per share is set at CNY 0.150, with a payout ratio of 50%, up from 40% in H1 2023, reflecting the company's commitment to shareholder returns [6] - The company has repurchased 13.84 million shares for a total of HKD 67.75 million in H1 2024 [6] Future Outlook and Valuation - The company is expected to benefit from ongoing domestic and international market opportunities, with projected net profits of CNY 2.638 billion, CNY 2.915 billion, and CNY 3.182 billion for 2024, 2025, and 2026 respectively [10] - The report highlights the company's low valuation and high dividend yield as key factors for potential investment [10]

研究报告 Research Report 19 Aug 2024 中石化炼化工程 Sinopec Engineering (Group) (2386 HK) 1H24 新签合同额创历史同期最好成绩，中期派息比例 50% Total amount of new contracts reached a historic high, with a 50% mid-term dividend payout ratio in 1H24 [Table_yemei1] 观点聚焦 Investment Focus | --- | --- | |-----------------------------------------------|---------------------| | [Table_Info] 维持优于大市 Maintain OUTPERFORM | | | 评级 | 优于大市 OUTPERFORM | | 现价 | HK$5.57 | | 目标价 | HK$6.81 | | HTI ESG | 5.0-5.0-5.0 | E-S-G: 0-5, (Please refer to the Appendix ...

告中石化煉化工程（集團）股份有限公司 2024 股票代號 : 2386 2024 技術先導型工程公司 半年度報告 創建世界領先 ard iser 18: 144 重要提示 中石化煉化工程（集團）股份有限公司（以下簡稱「中石化煉化工程」或「本公司」）董事會 （以下簡稱「董事會」）及其董事（以下簡稱「董事」）保證本半年度報告所載資料不存在任何 虛假記載、誤導性陳述或重大遺漏，並對其內容的真實性、準確性和完整性負個別及連帶 責任。中石化煉化工程所有董事均出席第四屆董事會第二十次會議。中石化煉化工程董事 長蔣德軍先生、執行董事兼總經理張新明先生、財務總監兼董事會秘書尹鳳兵先生和會計 機構負責人夏吉鵬先生保證本半年度報告中的財務報告真實、完整。 中石化煉化工程及其附屬公司（以下簡稱「本集團」）按國際財務報告準則編製的截至2024 年6月30日止六個月（以下簡稱「本報告期」）的中期財務報告已經香港立信德豪會計師事務 所有限公司進行審計並出具標準無保留意見的審計報告。 本半年度報告包括前瞻性陳述。除歷史事實陳述外，所有本公司預計或期待未來可能或即將發生的業務活動、事件或發展動態的 陳述（包括但不限於預測、目標、估計及經營計 ...

Financial Performance - The company's revenue for the six months ended June 30, 2024, was RMB 28,553,121 thousand, representing a 15.0% increase compared to RMB 24,829,660 thousand in the same period of 2023[10]. - Gross profit for the same period was RMB 2,494,647 thousand, an increase of 11.4% from RMB 2,240,224 thousand in 2023[10]. - Operating profit decreased by 6.6% to RMB 927,462 thousand from RMB 992,967 thousand in the previous year[10]. - The net profit attributable to equity holders of the company was RMB 1,318,677 thousand, showing a slight increase of 0.1% compared to RMB 1,317,070 thousand in 2023[10]. - The gross margin for the first half of 2024 was 8.7%, down from 9.0% in 2023[11]. - The net profit margin decreased to 4.6% from 5.3% in the previous year[11]. - The return on assets (ROA) was 1.6%, slightly down from 1.7% in 2023[11]. - The return on equity (ROE) was 4.2%, compared to 4.3% in the previous year[11]. - The total comprehensive income for the period was RMB 1.30 billion, a decrease of 0.9% compared to the previous year[46]. - The group's profit for the period was RMB 13.19 billion, a slight increase of 0.1% year-on-year[54]. Cash Flow and Financial Position - The company's cash flow from operating activities was negative at RMB (4,200,177) thousand, a significant decline from RMB (1,038,507) thousand in the same period last year, representing a 304.4% decrease[10]. - The company's cash and cash equivalents decreased by RMB 3.46 billion, primarily due to a reduction in financial institution time deposits[93]. - The company's total liabilities decreased to RMB 49.99 billion, down 0.3% from RMB 50.12 billion at the end of 2023[93]. - The company's cash flow from operating activities was negatively impacted by an increase in income tax paid, which rose to RMB (207,791) thousand from RMB (168,498) thousand[162]. - The company's total cash flow decreased by RMB (3,497,751) thousand compared to a decrease of RMB (1,585,214) thousand in the same period of 2023[162]. Shareholder Information - The total number of shares outstanding as of June 30, 2024, is 4,405,146,500, with 67.36% held by the controlling shareholder, China Petroleum & Chemical Corporation[16]. - The company declared an interim dividend of RMB 0.150 per share, with a payout ratio of 50%[24]. - The proposed interim cash dividend for the period ending June 30, 2024, is set at RMB 0.150 per share, subject to applicable taxes[104]. - The interim dividend will be distributed to shareholders registered by the close of business on September 10, 2024, with payment expected by October 28, 2024[104]. Contracts and Projects - In the first half of 2024, the company achieved a revenue of RMB 28.553 billion and a net profit of RMB 1.319 billion, with new contracts signed amounting to RMB 50.066 billion, representing a year-on-year growth of 32.7%[24]. - The overseas new contracts reached USD 2.354 billion, marking a year-on-year increase of 117.8%, with EPC contracts accounting for over 75% of the total[24]. - The total value of uncompleted contracts as of June 30, 2024, was RMB 157.78 billion, up 15.8% from December 31, 2023[31]. - The domestic new contract amount was approximately RMB 33.11 billion, with a year-on-year growth of 10.6%, maintaining industry leadership[33]. - The company signed 137 new contracts in emerging fields such as new energy and new materials, totaling approximately RMB 7.41 billion[33]. Research and Development - Research and development expenses increased to RMB 941.79 million, a rise of 18.7% year-on-year, due to heightened investment in key scientific research projects[50]. - The company initiated a new industrialization research project covering 11 key areas, including high-end, green, and intelligent technologies, to enhance innovation capabilities[24]. - The company filed 440 new patent applications, with 331 being invention patents, accounting for 75.2% of the total[37]. Corporate Governance and Compliance - The company complied with all corporate governance codes as per the Hong Kong Listing Rules during the reporting period[103]. - The audit committee reviewed the semi-annual report and had no dissenting opinions regarding the financial performance[121]. - The company has established a cash dividend distribution agreement with China Securities Depository and Clearing Corporation Limited for H-share investors through the Stock Connect program[105]. Employee Information - As of June 30, 2024, the total number of employees in the group is 15,626, with engineering technical personnel accounting for 78.7%[136]. - Employee costs for the first half of 2024 were approximately RMB 2.46 billion, compared to RMB 2.23 billion for the same period in 2023, representing an increase of about 10.4%[138]. - The gender distribution among employees as of June 30, 2024, shows 27.1% female employees and 72.9% male employees[139]. Market Environment - The macroeconomic environment remains complex, with high international oil prices and sluggish domestic chemical market demand, presenting both challenges and opportunities for the company[27]. - The company aims to enhance its core competitiveness while expanding into new markets and increasing international operations[46].

Investment Rating - The report assigns a "Buy" rating to Sinopec Engineering (2386.HK) with a target price of HKD 6.22, indicating that the current stock price is undervalued [2][9]. Core Views - Sinopec Engineering, backed by Sinopec Group, is positioned to benefit from both domestic and international market opportunities, with a strong financial performance and a commitment to high dividends driving potential value re-evaluation [1][2][8]. Summary by Sections Company Overview - Sinopec Engineering is a major integrated engineering service provider and technology patent holder in the refining and chemical engineering market, primarily controlled by Sinopec Group [15][17]. - The company has a robust financial structure with a debt ratio around 60% and minimal interest-bearing debt, generating significant financial income [1][45]. Business Scale and Competitive Advantage - The company ranks among the top three domestic petrochemical engineering firms, offering a comprehensive range of services across the entire refining engineering value chain [1][28]. - In 2023, the company achieved a revenue of CNY 56.22 billion, with a slight year-on-year increase of 6%, and a net profit of CNY 2.33 billion, reflecting stable profitability [28][35]. Market Opportunities - Domestic market growth is expected to stabilize due to ongoing large-scale projects, while international orders, particularly from the Middle East, are anticipated to surge, with new contracts signed in 2023 amounting to CNY 21.4 billion, a 198% increase year-on-year [1][9]. - The company is well-positioned to leverage Sinopec Group's resources and the Belt and Road Initiative to expand its overseas market presence [1][8]. Financial Performance and Valuation - The company maintains a high dividend payout ratio of 65% and a dividend yield of 9.9%, significantly higher than its A-share peers [1][49]. - The report forecasts revenue growth from CNY 59.2 billion in 2024 to CNY 68.1 billion in 2026, with net profits expected to rise from CNY 2.64 billion to CNY 3.18 billion over the same period [2][3]. Investment Thesis - The combination of high profitability, substantial dividends, and low valuation relative to peers suggests that Sinopec Engineering is poised for a re-evaluation of its market value, particularly in the context of ongoing state-owned enterprise reforms [1][2][8].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 6.22, based on a projected PB of 0.8 for 2024 [2][8]. Core Insights - The company is a major engineering service provider under Sinopec Group, with strong financial performance and a significant portion of its revenue (57%) derived from Sinopec and its affiliates [1][17]. - The company has a competitive advantage in the refining engineering sector, covering the entire industry chain and maintaining a healthy financial structure with a debt ratio around 60% and substantial financial income [1][27]. - The company is poised for growth due to new opportunities in both domestic and international markets, with a notable increase in overseas contracts signed in 2023 [1][6]. Summary by Sections 1. Company Overview - The company is a large integrated engineering service provider and technology patent holder, primarily serving the refining and petrochemical markets [13][14]. - It was established in 2012 through the restructuring of several subsidiaries under Sinopec Group, making it the sole operator of Sinopec's refining engineering segment [14][16]. 2. Business Scale and Competitive Advantage - The company ranks among the top three domestic petrochemical engineering firms, offering services across design, consulting, engineering contracting, construction, and equipment manufacturing [1][21]. - In 2023, the company achieved a revenue of 56.22 billion, with a slight increase of 6% year-on-year, and a net profit of 2.33 billion, reflecting stable profitability [21][22]. 3. Market Opportunities - Domestic refining capacity expansion is nearing completion, while chemical production remains robust, supporting stable contract growth [1][6]. - The company has significantly increased its overseas contract signings, with a 198% year-on-year growth in 2023, benefiting from the Belt and Road Initiative [1][6]. 4. Financial Health and Dividend Policy - The company maintains a healthy financial structure with minimal debt and a financial income that constituted 39% of its pre-tax profit in 2023 [27][29]. - It has a high dividend payout ratio of 65% in 2023, with a dividend yield of 9.9%, significantly higher than its A-share peers [1][29]. 5. Profitability Forecast and Valuation - The company is expected to see revenue growth from 59.2 billion in 2024 to 68.1 billion in 2026, with net profits projected to rise from 2.64 billion to 3.18 billion during the same period [2][3]. - The report highlights that the company's current valuation is below that of its A-share peers, suggesting potential for upward revaluation amid ongoing state-owned enterprise reforms [2][7].

Investment Rating - The report maintains a "Buy" rating for Sinopec Engineering (2386) with a target price of HKD 5.21 [5][7]. Core Views - The company's 2023 performance met expectations, with a significant increase in new contracts for 2024, driven by overseas market expansion and accelerated development of emerging businesses [7][9]. - The company achieved a record high in new contracts signed in 2023, amounting to RMB 802.52 billion, representing a year-on-year growth of 10.7% [7][9]. - The report forecasts EPS for 2024-2026 at RMB 0.59, 0.64, and 0.67 respectively, reflecting continued growth potential [7][9]. Financial Summary - In 2023, the company's main revenue reached RMB 562.21 billion, a year-on-year increase of 6.0%, with net profit attributable to shareholders at RMB 23.35 billion, up 2.4% [7][10]. - The breakdown of revenue includes engineering contracting (RMB 319.87 billion), design consulting and technology licensing (RMB 38.22 billion), construction (RMB 252.79 billion), and equipment manufacturing (RMB 7.31 billion) [7][10]. - The company also reported a dividend increase, with a payout of RMB 0.343 per share, a 4.6% increase year-on-year, resulting in a dividend yield of 8.14% [7][10]. Market Expansion - The company has made significant strides in overseas markets, with new contracts signed abroad totaling USD 2.978 billion, a remarkable year-on-year increase of 181.2% [7][9]. - In 2023, the company entered the Saudi market and achieved a target of having one-third of its operations in international markets [7][9]. - The report highlights the signing of 230 contracts in the new energy and new materials sectors, totaling RMB 76.72 billion, indicating accelerated growth in emerging business areas [7][9]. Future Guidance - For 2024, the company has set a new contract guidance of RMB 600 billion domestically and USD 3 billion internationally, totaling approximately RMB 815.95 billion, which is an increase of RMB 13.43 billion compared to 2023 [7][9]. - The company has also initiated a share buyback program, repurchasing 13.275 million H-shares, which is 0.91% of the issued H-shares, and plans to continue this program [7][9].

Company Overview - Sinopec Engineering reported a comprehensive service capability across the entire energy and chemical industry chain, providing solutions in refining, petrochemicals, and clean energy[7]. - The company has delivered hundreds of modern plants in over 20 countries, showcasing its strong project management and execution experience[7]. - Sinopec Engineering aims to enhance its service levels in safety, efficiency, and low-carbon solutions, aligning with its vision to become a world-leading technology-driven engineering company[7]. - Sinopec Engineering emphasizes its commitment to expanding its business scope and extending its value chain in the energy and chemical engineering sector[7]. - The company is positioned as a comprehensive service provider for the entire lifecycle of energy and chemical projects, aiming for sustainable development[7]. Financial Performance - The financial report for the year ending December 31, 2023, has been audited by Hong Kong Lixin Dehao Accounting Firm, confirming its accuracy and completeness[4]. - The board of directors guarantees the authenticity and completeness of the financial report, ensuring accountability for the information provided[4]. - The company achieved a total revenue of RMB 56.221 billion and a net profit of RMB 2.336 billion in 2023, with a new contract signing amounting to RMB 80.252 billion, marking a historical high[15]. - The company proposed a final dividend of RMB 0.224 per share, resulting in an annual dividend of RMB 0.343 per share, with a payout ratio of 65%[15]. - Total revenue for 2023 reached RMB 56,220,641, an increase of 6.0% compared to RMB 53,028,139 in 2022[23]. - The net profit attributable to shareholders was RMB 2,335,445, reflecting a 2.2% increase from RMB 2,285,103 in the previous year[23]. - Operating profit decreased to RMB 1,726,775, down 4.6% from RMB 1,810,813 in 2022[23]. - The company's total assets increased to RMB 81,967,671, a rise of 2.0% from RMB 80,682,463 in 2022[22]. - The current ratio improved slightly, with current assets at RMB 72,562,033, up 3.1% from RMB 70,369,169 in 2022[22]. - The gross profit margin for 2023 was 10.0%, a decrease from 10.6% in 2022[29]. Market Development - The company is focusing on international market expansion, with plans to strengthen its presence in the Middle East, Central Asia, Southeast Asia, and Africa[17]. - The new contract signing from Sinopec Group, domestic external owners, and overseas owners accounted for 27.4%, 45.9%, and 26.7% respectively, indicating a balanced market development[15]. - The total new contracts signed in the international market reached a historical high, with a shift towards total contracting replacing construction contracts as the main business[15]. - The company is exploring the integration of international standards with Chinese models to enhance its competitiveness in the global market[17]. Technological Innovation - The company made significant breakthroughs in technology innovation, with the completion of projects like Anqing RTC and Kuqa Green Hydrogen, enhancing its capabilities in oil conversion and hydrogen energy[16]. - The solid waste reuse rate reached 100% with the successful development of a complete set of technology for zero landfill treatment of multi-source solid waste[16]. - The company is committed to green low-carbon technology development, addressing the industry's common pursuit of carbon reduction and pollution control[17]. - The company successfully launched China's first 10,000-ton green hydrogen demonstration project, achieving a hydrogen production scale of 20,000 tons per year[55]. - The company’s global first 3 million tons/year RTC industrial demonstration unit was successfully put into operation, supporting the transition from traditional fuel refineries to chemical refineries[55]. Corporate Governance - The company has strengthened its internal control system, aligning with regulations from the Ministry of Finance and other authorities, ensuring comprehensive risk management and operational goals are met[161]. - The company has appointed four independent non-executive directors, confirming their independence and professional qualifications in accordance with the Hong Kong Listing Rules[159]. - The company has implemented a risk management mechanism with a three-tiered approach, ensuring effective risk prevention and control across various business units[162]. - The company has established a comprehensive internal control evaluation system, with annual self-assessments conducted by subsidiaries and independent evaluations by the audit department[163]. - The board of directors has confirmed adherence to the corporate governance code without any deviations during the reporting period[169]. Sustainability and ESG Initiatives - The company has actively participated in social responsibility initiatives, promoting sustainable development within its operational framework[157]. - The group established a key ESG performance indicator system covering greenhouse gas emissions, resource consumption, and occupational health and safety[61]. - The ESG committee reviewed the progress of ESG initiatives during its second meeting on August 18, 2023, indicating a focus on sustainability and governance practices[200]. Future Outlook - Sinopec Engineering's future outlook includes a focus on technological innovation and market expansion to drive growth[7]. - The company aims for a new contract signing target of RMB 60 billion domestically and USD 3 billion internationally for 2024[62]. - The company is focusing on expanding its market presence both domestically and internationally, with an emphasis on developing core competitive products[62].

Financial Performance - The company achieved a revenue of 100 billion in 2023[8] - Annual revenue reached RMB 56.221 billion, with a net profit of RMB 2.336 billion, and new contract value of RMB 80.252 billion[10] - Revenue for 2023 increased by 6.0% to RMB 56,220.64 million compared to 2022[17] - Net profit attributable to equity holders of the company rose by 2.2% to RMB 2,335.45 million in 2023[17] - Gross profit margin remained stable at 10.0% in 2023, compared to 10.6% in 2022[23] - Net profit margin slightly decreased to 4.2% in 2023 from 4.3% in 2022[23] - Total assets increased by 3.1% to RMB 72,562.03 million in 2023[16] - Total liabilities grew by 3.2% to RMB 47,968.76 million in 2023[16] - Equity attributable to equity holders of the company increased by 2.7% to RMB 30,842.14 million in 2023[16] - Basic earnings per share (EPS) increased by 2.2% to RMB 0.53 in 2023[17] - Net cash flow from operating activities decreased significantly by 63.0% to RMB 2,516.76 million in 2023[17] - Asset-liability ratio remained stable at 61.9% in 2023, compared to 61.8% in 2022[18] - The company achieved total revenue of RMB 56.221 billion and net profit attributable to shareholders of RMB 2.335 billion[35] - Revenue for 2023 reached RMB 56.22 billion, a 6.0% year-on-year increase, driven by large-scale projects such as Huizhou Ethylene and Zhenhai Base Phase II[59][60] - Gross profit remained stable at RMB 5.61 billion, with a gross margin of 10.0%, down from 10.6% in the previous year[59][61] - Operating profit decreased by 4.6% to RMB 1.73 billion due to increased sales and marketing expenses and other operational costs[59][65] - Net financial income increased by 9.0% to RMB 1.02 billion, primarily due to higher deposit interest income[59][66] - R&D expenses decreased by 14.6% to RMB 2.20 billion as the company optimized R&D investments towards new chemical materials[59][63] - Other income dropped significantly by 92.1% to RMB 24.97 million, mainly due to reduced foreign exchange gains[59][62] - Net profit for the year increased by 2.2% to RMB 2.34 billion, supported by lower tax expenses and improved financial income[59][68] - Total revenue for the group was RMB 56.221 billion, a year-on-year increase of 6.0%[92] - Total revenue for 2023 reached RMB 562.21 billion, a 6.0% increase compared to 2022[96] - Revenue from non-Sinopec Group clients grew by 12.4% to RMB 243.49 billion, driven by projects like Huizhou Ethylene and Saudi Aramco crude oil pumping stations[96] - Total assets increased by RMB 2.29 billion to RMB 809.68 billion, with net assets rising to RMB 308.48 billion[107] - Total assets increased by RMB 2.285 billion to RMB 80.968 billion, primarily due to a RMB 2.961 billion increase in fixed deposits with financial institutions and a RMB 2.567 billion increase in prepayments and other receivables[108] - Total liabilities increased by RMB 1.474 billion to RMB 50.120 billion, mainly driven by a RMB 1.813 billion increase in contract liabilities[108] - Net cash generated from operating activities was RMB 2.517 billion, a significant decrease from RMB 6.809 billion in the previous year[110] - Net cash used in investing activities was RMB 26.639 billion, primarily due to increased expenditures on property, plant, and equipment as well as fixed deposits[111] - Net cash used in financing activities was RMB 16.204 billion, mainly due to dividend payments[111] - The company's net profit margin was 4.2%, slightly down from 4.3% in the previous year[112] - Return on equity remained stable at 7.6%, the same as the previous year[116] - The debt ratio decreased slightly to 0.8%, down 0.1 percentage points from the previous year[117] - The company maintained a net cash position for both 2023 and 2022 year-ends[117] - The current ratio and quick ratio both remained stable at 1.5, unchanged from the previous year[117] International Presence and Contracts - The company has a strong international presence, having delivered hundreds of modern chemical plants in over 20 countries and regions[4] - The company achieved a record high in new contract value, with 27.4% from Sinopec Group, 45.9% from domestic non-Sinopec clients, and 26.7% from overseas clients[10] - Overseas new contracts hit a record high, with EPC (Engineering, Procurement, and Construction) replacing construction contracts as the main business[10] - The company successfully entered the FEED (Front-End Engineering Design) and PMC (Project Management Consultancy) markets in Saudi Arabia and other countries[10] - The company plans to focus on domestic market opportunities in energy efficiency improvement and high-end development, while expanding in the Middle East, Central Asia, Southeast Asia, and Africa[12] - Overseas revenue surged by 34.1% to RMB 5.62 billion, driven by projects such as Saudi Aramco's crude oil pump station upgrade and Saudi Marjan[39] - Overseas newly signed contracts amounted to approximately $2.978 billion, a year-on-year increase of 181.2%, with significant contracts including the Saudi Riyas NGL Project P1 and P2 segments ($1.173 billion) and the Saudi AMIRAL Project ($727 million)[43] - Overseas uncompleted contracts surged by 76.4% to RMB 36.55 billion, indicating strong international expansion[100] - Overseas new contracts grew by 197.8% to RMB 21.45 billion, highlighting significant international market penetration[104] Research and Development - The company identified 11 research and experimental directions, covering high-end, green, and intelligent development in the engineering construction industry[12] - The company signed 258 technology development contracts with a total value of RMB 420 million, and 100 technology licensing and service contracts with a total value of RMB 410 million, both reaching historical highs[46] - The company filed 797 new patent applications, including 574 invention patents, accounting for 72.0% of the total, and was granted 462 patents, including 233 invention patents, accounting for 50.4%[46] - R&D expenses decreased by 14.6% to RMB 2.20 billion as the company optimized R&D investments towards new chemical materials[59][63] - EPC business R&D costs decreased by 11.3% year-on-year to RMB 1.02 billion, reflecting optimized R&D focus on new chemical materials[80] Environmental and Sustainability - The company aims to enhance its service level in safety, efficiency, green, and low-carbon aspects to achieve its vision of becoming a world-leading technology-driven engineering company[4] - Solid waste reuse rate reached 100% with the development of "multi-source solid waste zero-landfill harmless treatment technology"[11] - The company completed the first 10,000-ton photovoltaic green hydrogen demonstration project in China, with an annual hydrogen production capacity of 20,000 tons, marking a significant milestone in green hydrogen production[47] - The company established a key ESG performance indicator system covering greenhouse gas emissions, resource consumption, pollutant emissions, occupational health and safety, and anti-corruption, and integrated these indicators into the assessment system for key management personnel and member companies[53] - The ESG committee reviewed and approved the progress of ESG work at its second meeting on August 18, 2023[186] Corporate Governance - The company's financial report for the year ended December 31, 2023, was audited by BDO Limited and received a standard unqualified audit opinion[2] - The company strictly complied with domestic and overseas securities regulations and continuously improved corporate governance during the reporting period[144] - The company enhanced the training and responsibility awareness of directors, supervisors, and senior management, providing monthly reports to support decision-making[144] - No directors, supervisors, or senior management held shares or interests requiring notification under the Hong Kong Securities and Futures Ordinance during the reporting period[145] - The company appointed four independent non-executive directors, all confirming their independence under the Hong Kong Listing Rules[146] - Independent non-executive directors actively participated in board meetings, provided strategic advice, and maintained effective communication with management and auditors[146] - China Petrochemical Group complied with the non-competition agreement and commitments during the reporting period, as confirmed by independent non-executive directors[147] - The company improved its internal control manual to align with domestic and international regulatory requirements, enhancing risk management and operational efficiency[148] - A three-line defense risk management mechanism was established, with core business departments, support functions, and audit departments each playing distinct roles[149] - The company implemented a two-level internal control evaluation system, with subsidiaries conducting self-assessments and the parent company conducting comprehensive evaluations annually[150] - The company's internal control manual covers all financial reporting requirements and is linked to professional management systems, including fund and asset management, cost accounting, financial analysis, and budget management[151] - No significant or material internal control deficiencies were identified during the reporting period, and all financial reporting-related deficiencies have been rectified[152] - The company has implemented sufficient internal control measures to monitor and comply with sanctions risks, with no violations reported during the period[153] - The Board of Directors reviews the updated internal control manual annually and oversees the implementation and self-assessment of internal controls through the Audit Committee[154] - The company has established a strict insider information management system, requiring senior management and employees to comply with disclosure guidelines and restricting unauthorized use of confidential information[155] - The Board of Directors held 7 meetings in 2023, with meeting materials and data provided to directors 10 days in advance[156] - The Board consists of 11 members, including 4 executive directors, 3 non-executive directors, and 4 independent non-executive directors, ensuring diversity and expertise[158] - The Chairman and CEO have clearly defined responsibilities, and the Chairman emphasizes open communication with independent non-executive directors[158] - All directors are elected through legal procedures, with a term of 3 years, and independent non-executive directors must be re-elected by shareholders after 9 years[158] - Newly appointed directors are provided with detailed information and guidance on regulatory requirements and their rights and responsibilities[158] - The company has established a Nomination Committee chaired by Chairman and Executive Director Jiang Dejun, with independent non-executive directors as members, responsible for recommending candidates for director appointments and succession planning[159] - The Nomination Committee considers candidates' skills, knowledge, experience, qualifications, time commitment, and diversity policy when nominating directors[159] - The Board has formulated a Board Diversity Policy with two measurable objectives: (1) considering diverse candidates for director appointments and (2) annually reviewing the Board's composition and structure[159] - In 2023, the company appointed Ms. Xie Yanli as an executive director through a democratic election process, aligning with the Board Diversity Policy[160] - The current Board composition and structure are deemed suitable for the company's business development needs and provide valuable advice and decision-making oversight[160] - All non-executive directors, including independent non-executive directors, have the same authority as executive directors, with specific additional powers[161] - The company has adopted the Standard Code as the code of conduct for directors' securities transactions, and all directors have confirmed compliance during the reporting period[161] - The company provides training and funding for directors, who actively participate in continuous professional development[161] - The Remuneration Committee, chaired by independent non-executive director Xu Zhaozhong, is responsible for studying and recommending the remuneration structure and policies for directors, supervisors, and senior management[163] - The Remuneration Committee consulted with the Chairman and Vice Chairman on remuneration recommendations for other executive directors and confirmed that executive directors fulfilled their responsibilities in 2023[164] - The company has established a comprehensive risk management process including goal setting, risk identification, risk assessment, risk response, and monitoring and improvement[165] - The company conducts quarterly internal control tests and annual comprehensive evaluations of internal control design and operational effectiveness[166] - The company has a risk management committee responsible for leading the overall risk management and internal control work[165] - The company's internal control system covers all major controls including financial, operational, compliance controls, and risk management functions[166] - The company's audit committee reviews financial statements, internal audit systems, internal control systems, and risk management systems[167] - The company has revised its internal control manual and implemented it online to strengthen internal control management[166] - The company's risk management and internal control evaluation results show no significant deficiencies and overall effectiveness of internal controls[166] - The company's audit committee can hire professionals and appoint advisory members to assist in daily work[167] - The company's risk management and internal control are deeply integrated into daily business management activities[165] - The company's board of directors is the highest decision-making body for comprehensive risk management[165] - The company's audit committee held two meetings with auditors to discuss financial report audits and audit fees, ensuring the adequacy of resources and staff qualifications in accounting, internal audit, and financial reporting functions[168] - The company established a Strategic and Development Committee responsible for long-term development strategies and major capital expenditure and investment decisions[169] - The company's senior management conducts annual roadshows to introduce the company's development strategy and operational performance to investors[171] - The company revised its Articles of Association, Board Meeting Rules, and Supervisory Committee Meeting Rules, adjusting the composition of the board and supervisory committee[171] - The company's 2023 audit fees amounted to RMB 4.57 million, approved by the fourth board of directors' tenth meeting[172] - The company's board of directors consists of executive directors, non-executive directors, and independent non-executive directors, with specific members holding key positions[175] - The company held a total of 7 board meetings during the reporting period, with key decisions including the appointment and dismissal of deputy general managers, approval of financial reports, and setting of operational plans for 2023[177][178] - The board approved the 2023 mid-term financial report, which included the completion of major tasks and financial performance for the first half of the year, as well as the mid-term dividend distribution plan[178] - The company's board of directors established five specialized committees, including the Audit Committee, Compensation Committee, and ESG Committee, which held a total of 7 meetings during the reporting period[183] - The board approved the 2023 production and operation plan, investment plan, and financial budget, as well as the setting of the parent company's performance guarantee limit for 2023[177] - The company's board of directors approved the revision of the company's articles of association and the rules of procedure for board meetings and shareholders' meetings[178] - The board approved the appointment of the company's general manager, financial director, board secretary, and other key positions[178][179] - The company's board of directors approved the 2023 mid-term dividend distribution plan and the implementation plan for share repurchases[178] - The board approved the revision of the company's leadership performance appraisal and compensation management methods, as well as the 2023-2024 term assessment responsibility letters for company leaders[178] - The company's board of directors approved the appointment of the company's general legal counsel and chief compliance officer[178] - The board approved the 2023 mid-term financial report, which included the completion of major tasks and financial performance for the first half of the year, as well as the mid-term dividend distribution plan[178] - The company's 2023 interim dividend distribution plan was approved at the 13th meeting of the fourth board of directors, with a cash dividend of RMB 0.119 per share (tax included)[187] - The proposed final dividend for 2023 is RMB 0.224 per share (tax included), subject to approval at the 2024 annual general meeting[187] - The final dividend for 2023 will be distributed by July 19, 2024, to shareholders registered by May 22, 2024[187] - H-share shareholders must complete share transfer procedures by May 16, 2024, to be eligible for the final dividend[187] - The company is required to withhold a 10% enterprise income tax for non-resident enterprise H-share shareholders when distributing cash dividends[188] - The exchange rate for HKD-denominated dividends will be based on the average RMB-HKD benchmark rate published by the People's Bank of China five working days before the 2024 annual general meeting[188] - The company's dividend policy ensures a minimum cash distribution of 30% of annual net profit attributable to shareholders, subject to financial and operational conditions[187] - The 2023 interim financial report and related audit opinions were approved at the fourth audit committee meeting on August 17, 2023[185] - The mid-term evaluation of the company's 14th Five-Year Plan was reviewed and approved at the second meeting of the fourth strategy and development committee on August 17, 2023[185] - The ESG committee reviewed and approved the progress of ESG work at its second meeting on August 18, 2023[186] Shareholder Information - China Petrochemical Corporation holds 2,967,200,000 domestic shares, accounting for 67.15% of the total share capital[28] - HKSCC Nominees Limited holds 1,442,532,780 H-shares, representing 32.65% of the total share capital[28] - FMR LLC holds 146,096,410 H-shares, accounting for 10.00% of the H-share category and 3.31% of the total share capital[30] - Pandanus Associates Inc., Pandanus Partners L.P., and FIL Limited each hold 87,410,353 H-shares, representing 5.98% of the H-share category and 1.98% of the total share capital[30] - Fidelity Investment Trust holds 73,184,819 H-shares, accounting for 5.01% of the H-share category and 1.66% of the total share capital[30] - The company repurchased a total of 12,823,500 H shares on the Hong Kong Stock Exchange, using a total of HKD 50,082,493.75