Financial Performance - Sinopec Engineering reported audited financial results for the year ending December 31, 2024, in compliance with Hong Kong Stock Exchange regulations[3]. - The company achieved an annual revenue of 64.198 billion yuan and a net profit of 2.474 billion yuan, successfully completing all production and operational tasks[20]. - Revenue for 2024 reached RMB 64,198,210, an increase of 13.9% compared to RMB 56,353,293 in 2023[33]. - Net profit attributable to equity holders increased by 5.5% to RMB 2,465,727 from RMB 2,336,743 in 2023[33]. - The proposed final dividend is 0.208 yuan per share, leading to a total annual dividend of 0.358 yuan per share, with a payout ratio of 65%, marking a new high since the company's listing[20]. - The profit attributable to shareholders was RMB 2.466 billion, reflecting a year-on-year growth of 5.5%[52]. - The gross profit margin for 2024 was 8.3%, down from 10.0% in 2023[34]. - The net profit margin decreased to 3.9% in 2024 from 4.2% in 2023[165]. Business Strategy and Outlook - Sinopec Engineering's future outlook includes expanding its business scope and extending its value chain to achieve its vision of becoming a world-leading technology-driven engineering company[12]. - The company aims to enhance its service levels across the energy and chemical engineering sectors, focusing on safety, efficiency, and low-carbon solutions[12]. - The company emphasizes comprehensive service across the entire lifecycle of energy and chemical projects, positioning itself as a full-chain service provider[12]. - The company aims to deepen cooperation with strategic clients and expand partnerships with international engineering firms and core suppliers[22]. - The company plans to increase investment in high-end carbon materials, low-cost oil conversion, and green low-carbon technologies to drive industry advancement[24]. - The company is focusing on international operations and has established a high-performance team with comprehensive engineering service capabilities across the energy and chemical industry[22]. Contracts and Projects - New signed contracts reached 100.613 billion yuan, maintaining double-digit growth for three consecutive years, with overseas new contracts increasing by 79.6% year-on-year to 5.349 billion USD[21]. - The new contract volume signed during the reporting period was RMB 100.613 billion, an increase of 25.4% year-on-year[57]. - The total value of unfinished contracts reached RMB 172.68 billion, reflecting a growth of 26.7% compared to the previous year[58]. - The company executed 1,596 projects with an average daily workforce exceeding 100,000, achieving a cumulative safety record of 380 million hours without reported safety incidents[60]. - New contracts in the strategic emerging business sectors increased by 63% year-on-year, with new contracts in clean energy and new materials totaling RMB 12.4 billion[64]. Technology and Innovation - The company is actively promoting the integration of artificial intelligence in engineering construction, aiming to transform production methods and enhance overall construction efficiency[24]. - The company anticipates that the integration of artificial intelligence with engineering processes will create disruptive value opportunities in the future[25]. - The company has filed 762 new patent applications, with 76.6% being invention patents, and granted 384 new patents, with 52.3% being invention patents[72]. - The company is advancing AI design research, transitioning from traditional to generative design[74]. Financial Position and Assets - Total assets as of December 31, 2024, are RMB 81.51 billion, an increase of RMB 0.42 billion from RMB 81.09 billion in 2023[153]. - Total liabilities decreased to RMB 49.93 billion from RMB 50.17 billion, a reduction of RMB 0.24 billion year-over-year[155]. - The net assets attributable to equity holders increased to RMB 31.51 billion, up by RMB 0.65 billion compared to RMB 30.86 billion in 2023[156]. - Cash and cash equivalents decreased by RMB 1.38 billion during the reporting period, with net cash used in operating activities amounting to RMB 2.21 billion[159]. Related Party Transactions - The total related party transactions amounted to RMB 27.763 billion, with purchases of RMB 2.827 billion and sales of RMB 24.936 billion[182]. - The company provided engineering services to Sinopec Group worth RMB 23.978 billion, also within the annual cap[182]. - The company engaged in technology research and development services for Sinopec Group amounting to RMB 238 million, within the annual cap[183]. Share Repurchase and Capital Management - The company repurchased a total of 17,295,500 H-shares during the reporting period, utilizing funds amounting to HKD 86,510,422.80[195]. - The company plans to cancel 13,397,000 H-shares repurchased from December 18, 2023, to April 30, 2024, representing approximately 0.30% of the total issued share capital[195]. - The company believes that the repurchase of H-shares will enhance earnings per share and overall shareholder returns[196]. Awards and Recognition - The MSCI ESG rating improved to BB, making the company the highest-rated and only one in the Chinese engineering industry to achieve this rating[21]. - The company has received 70 awards for technological progress at the provincial and national levels during the reporting period[72].

Core Insights - Sinopec Engineering Group's Vice General Manager Wang Guohua visited SANY Group to discuss strategic cooperation in various sectors [1] Group 1: Strategic Cooperation - The meeting focused on collaborative development strategies between Sinopec and SANY Group [1] - Multiple cooperation agreements were reached in the fields of wind power, hoisting, and hydrogen energy [1]

Investment Rating - The report assigns a "Buy" rating for Sinopec Engineering Group (SEG) with a target price of 8 HKD, based on a 12x PE for 2025 [5]. Core Insights - Sinopec Engineering Group is a leading energy and chemical engineering company in China, providing comprehensive solutions across various sectors including oil refining, petrochemicals, and clean energy [12][16]. - The company has demonstrated stable profitability with a gross margin around 10% and a net margin of approximately 5% from 2019 to 2023, alongside a consistent dividend payout ratio of 65% [16][22]. - The domestic market is experiencing a trend of upgrading and transformation in refining, with significant projects underway by major oil companies [3][16]. - The international market, particularly in the MENA region, is witnessing unprecedented growth in oil and gas projects, contributing to a 32.7% increase in overseas orders for SEG [4][16]. Summary by Sections Company Overview - Sinopec Engineering Group, a subsidiary of Sinopec, is a prominent player in the energy and chemical engineering sector, listed in Hong Kong since May 2013 [12][16]. - The company operates 12 subsidiaries, offering a wide range of services including engineering consulting, project management, and construction [12][16]. Industry Landscape - The energy and chemical engineering industry has high barriers to entry due to complex processes, high specialization, and significant capital and technical requirements [2][32]. - SEG's main competitors in the domestic market include China Petroleum Engineering, China Huanqiu Engineering, and China Chemical Engineering [2][29]. Domestic Market Dynamics - The refining sector in China is undergoing structural adjustments, with major projects in ethylene production being implemented by both Sinopec and PetroChina [3][16]. - The coal chemical industry is poised for significant growth, with numerous projects planned through 2025 [3][16]. International Market Opportunities - The MENA region is becoming a focal point for global refining projects, with a total contract value reaching 94 billion USD, significantly higher than previous years [4][16]. - SEG's overseas orders have shown robust growth, continuing from a high growth rate in 2023 [4][16]. Financial Performance and Valuation - The report forecasts net profits for 2024, 2025, and 2026 to be 2.525 billion, 2.757 billion, and 2.943 billion RMB respectively, with corresponding EPS of 0.57, 0.63, and 0.67 RMB [5]. - The company has maintained stable revenue above 50 billion RMB annually from 2019 to 2023, with a notable increase in overseas revenue by 34.1% in 2023 [16][22].

Investment Rating - The report assigns a "Buy" rating for Sinopec Engineering Group (SEG) with a target price of 8 HKD, based on a 12x PE for 2025 [5]. Core Insights - Sinopec Engineering Group is a leading energy and chemical engineering company in China, providing comprehensive solutions across various sectors including oil refining, petrochemicals, and clean energy [12][16]. - The company has demonstrated stable profitability with a gross margin around 10% and a net margin of approximately 5% from 2019 to 2023, alongside a consistent dividend payout ratio of 65% [16][22]. - The domestic market is experiencing a trend of upgrading refining processes and a surge in coal chemical projects, with significant new contracts signed in 2024 [3][4]. - Internationally, SEG is focusing on the MENA region, where the value of awarded oil and gas projects has reached unprecedented levels, contributing to a 32.7% growth in overseas orders [4]. Summary by Sections Company Overview - Sinopec Engineering Group, a subsidiary of Sinopec, is a prominent player in the energy and chemical engineering sector, listed in Hong Kong since May 2013 [12]. - The company operates 12 subsidiaries, providing a wide range of services including engineering consulting, project management, and construction [12][13]. Industry Landscape - The energy and chemical engineering industry has high barriers to entry due to complex processes, specialized requirements, and long project cycles [2][27]. - SEG's main competitors in the domestic market include China Petroleum Engineering Construction and China Chemical Engineering [29]. Domestic Market Trends - The refining sector in China is undergoing structural adjustments, with major projects from both Sinopec and PetroChina aimed at upgrading facilities [3]. - The coal chemical industry is poised for growth, with a projected 295 projects by January 2025, significantly increasing SEG's order intake [3]. International Market Focus - The MENA region is becoming a focal point for SEG, with a record contract value of 94 billion USD for oil and gas projects expected in the upcoming year [4]. - The company has seen a substantial increase in overseas orders, continuing the growth trend established in 2023 [4]. Financial Performance and Valuation - SEG's revenue has remained stable above 50 billion RMB, with a reported revenue of 56.26 billion RMB in 2023, marking a 6% year-on-year increase [16]. - The forecasted net profit for 2024, 2025, and 2026 is 2.525 billion, 2.757 billion, and 2.943 billion RMB respectively, with an EPS of 0.57, 0.63, and 0.67 RMB [5].

Investment Rating - The report maintains a "Buy" rating for Sinopec Engineering (2386.HK) with a current price of HKD 5.54 [2][10]. Core Views - The strategic cooperation between Sinopec Group and China National Petroleum Corporation (CNPC) is expected to enhance long-term development and optimize the company's equity structure [3][4]. - The transfer of shares from Sinopec Group to CNPC, amounting to 21.998 million shares (5% of total shares), strengthens the partnership and resource sharing between the two energy giants [3][4]. - The company has seen a significant increase in new contracts, with a 65.6% year-on-year growth in the first three quarters of 2024, indicating strong market demand and operational capabilities [5][6]. - The diversification of contract sectors, particularly in refining and new coal chemical industries, reflects the company's expanding market presence and operational efficiency [6][7]. - The company is well-positioned to benefit from domestic and international market opportunities, particularly in the Middle East, due to its strategic initiatives and partnerships [7][9]. Summary by Sections Equity Structure and Strategic Cooperation - The share transfer enhances Sinopec Group's control to 61.09% while CNPC becomes the second-largest shareholder with 5% [4]. - This restructuring is seen as a move to improve governance and market recognition, facilitating value realization [4]. Contract Performance - In the first three quarters of 2024, domestic new contracts reached CNY 46.9 billion (up 32%), while overseas contracts surged to CNY 26.6 billion (up 202%), increasing the overseas contract proportion from 20% to 36% [5][6]. - The company’s EPC contract share rose from 54% to 74%, showcasing enhanced total contracting capabilities [5]. Market Opportunities - The domestic market is experiencing rapid development in the petrochemical sector, supported by government policies promoting energy efficiency and carbon reduction [7]. - The Middle East's capital expenditure in refining has exceeded USD 100 billion, presenting significant opportunities for Sinopec Engineering [7][9]. Financial Projections - The report forecasts net profits for 2024-2026 at CNY 2.638 billion, CNY 2.915 billion, and CNY 3.182 billion respectively, with corresponding EPS of CNY 0.60, CNY 0.66, and CNY 0.72 [10][12].

Investment Rating - The report maintains a "Buy" rating for Sinopec Engineering (2386.HK) [3] Core Views - The company signed new contracts worth 73.457 billion yuan in the first three quarters of 2024, representing a year-on-year increase of 65.6% [1] - The overseas market expansion is significant, with overseas contracts accounting for 36% of total new contracts, up from 20% in the same period last year [2] - The company’s business structure is improving, with the proportion of EPC contracts increasing from 54% to 74% [2] - The company has a historical high of 165.8 billion yuan in hand orders, a 40% increase year-on-year, providing strong support for future business development [2] Summary by Sections New Contracts and Market Expansion - In the first three quarters of 2024, domestic new contracts amounted to 46.9 billion yuan, a 32% increase, while overseas contracts reached 26.6 billion yuan, a 202% increase [2] - Major domestic contracts include the Mango Ethylene Project (6.081 billion yuan) and the Huajin Project (5.807 billion yuan) [2] - Significant overseas contracts include the Kazakhstan Silleno Ethylene Cracking Project (1.25 billion USD) and the Saudi Jafurah Phase III Project (900 million USD) [2] Business Structure and Order Diversification - The new contracts span various industries, with rapid growth in refining, new coal chemical, storage and transportation, and others, showing increases of 95%, 1850%, and 256% respectively [2] - The proportion of new contracts from the petrochemical industry decreased from 80% to 58% [2] - The internal contract proportion from Sinopec increased slightly from 30.3% to 41.7% [2] Market Opportunities and Future Growth - The domestic market is seeing accelerated construction of large refining bases and a growing capital expenditure in high-end new materials projects [2] - The overseas market, particularly in the Middle East, is experiencing active capital expenditure exceeding 100 billion USD, with increasing refining production capacity [2] - The company is expected to benefit from the "Belt and Road" initiative and its platform advantages, leading to robust business growth [2] Profit Forecast and Valuation - The report forecasts net profits for 2024-2026 to be 2.638 billion, 2.915 billion, and 3.182 billion yuan respectively, with corresponding EPS of 0.60, 0.66, and 0.72 yuan per share [3] - The company is seen as undervalued with high dividend value under the backdrop of state-owned enterprise reform [2]

Investment Rating - The report maintains a "Buy" rating for Sinopec Engineering (2386.HK) [4] Core Views - Sinopec Engineering has signed a $2.5 billion EPC contract for the Silleno petrochemical complex project in Kazakhstan, marking a significant breakthrough in overseas markets and aligning with the Belt and Road Initiative [2][3] - The project is a joint venture with Kazakhstan's national oil and gas company and reflects Sinopec's commitment to enhancing its overseas market development and high-quality growth [3] - The company has seen a substantial increase in overseas contract signings, with a 117.8% year-on-year growth in new contracts amounting to approximately $2.354 billion in the first half of 2024 [3] - The domestic market is also presenting new opportunities, driven by the rapid development of large refining bases and supportive policies for energy efficiency and carbon reduction [3] Summary by Sections Contract Announcement - Sinopec Engineering has entered into a $2.5 billion EPC contract for the ethylene cracking project at the Silleno petrochemical complex in Kazakhstan [2] Market Opportunities - The company is benefiting from the modernization of China's industrial system and the expansion of the petrochemical industry, with significant capital expenditures in high-end new materials [3] - In the overseas market, active capital expenditures in the Middle East have exceeded $100 billion, providing a favorable environment for Sinopec to secure more contracts [3] Financial Forecasts - The report projects Sinopec Engineering's net profit for 2024-2026 to be approximately 2.638 billion, 2.915 billion, and 3.182 billion yuan respectively, with corresponding EPS of 0.60, 0.66, and 0.72 yuan per share [4] - The company is expected to experience rapid growth in performance, supported by its resource advantages and ongoing market expansion [4]

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]

Investment Rating - The report maintains an "Outperform" rating for Sinopec Engineering (Group) [3][12][16] Core Views - In the first half of 2024, the company achieved a total revenue of RMB 28.55 billion, representing a year-on-year increase of 15%, while the net profit attributable to shareholders was RMB 1.32 billion, up 0.1% year-on-year [5][15] - The company reported a mid-term dividend payout ratio of 50%, with a declared dividend of RMB 0.15 per share, resulting in a dividend yield of 2.5% based on the closing price on August 16, 2024 [5][15] - New contract amounts reached a historic high of RMB 50.066 billion in the first half of 2024, reflecting a significant year-on-year growth of 32.7% [6][9] Financial Performance - Total revenue for the first half of 2024 was RMB 28.55 billion, with a net profit of RMB 1.32 billion [5][15] - The company repurchased a total of 13.8 million shares on the Hong Kong Stock Exchange, utilizing HKD 67.8 million [15] - The company’s new contracts included significant projects such as the Huizhou Ethylene project, contributing to the overall growth [6][9] Contract Details - The new contracts included major projects such as the EPC contract for the Fujian Gulei Ethylene project worth RMB 6.081 billion and the EPC contract for the Northern Huajin Fine Chemical project worth RMB 5.807 billion [7][9] - The company’s overseas contracts accounted for 34% of the total new contracts, with a notable year-on-year increase of 117.8% [6][9] Segment Performance - The engineering contracting segment generated revenue of RMB 16.68 billion, up 18% year-on-year, while the construction segment achieved revenue of RMB 13.09 billion, reflecting a 16% increase [9][10] - The design consulting and technology licensing segment saw a decline in revenue to RMB 1.52 billion, down 12% year-on-year [9][10] Earnings Forecast - The forecast for net profits for 2024-2026 is RMB 2.64 billion, RMB 3.05 billion, and RMB 3.62 billion, with corresponding EPS of RMB 0.60, RMB 0.69, and RMB 0.82 [12][16] - The target price is set at RMB 6.30 / HK$ 6.81, based on a P/E multiple of 10.5x for 2024 [12][16]