Core Viewpoint - China Petroleum & Chemical Corporation (Sinopec) and Contemporary Amperex Technology Co., Ltd. (CATL) have signed a framework agreement to deepen their long-term strategic cooperation, focusing on building a nationwide battery swapping network and infrastructure for new energy vehicles [1][2]. Group 1: Partnership Details - The agreement aims to construct at least 500 battery swapping stations this year, with a future goal of 10,000 stations to enhance energy services for new energy vehicle owners [1][2]. - Sinopec has a vast network of 30,000 comprehensive energy stations and over 28,000 convenience stores, serving more than 200 million customers daily [2][3]. - CATL is the world's largest supplier of power batteries and has established partnerships with major automotive manufacturers to launch multiple battery-swappable vehicle models [2][3]. Group 2: Industry Impact - The battery swapping model is recognized as a key solution to alleviate charging anxiety and promote low-carbon development in the transportation sector [1][2]. - The collaboration signifies a new phase in the systematic construction of the battery swapping ecosystem, integrating resources from both companies to accelerate the development of new infrastructure [2][3]. - The partnership will also focus on standardization in energy and electricity, aiming to contribute to the high-quality development of China's new energy vehicle industry and serve as a model for global energy transition [2][3].

Investment Rating - The report maintains a "Buy" investment rating for the company [1][8] Core Views - The company's profitability is under pressure due to oil price fluctuations and energy transition, with a notable decline in revenue and net profit for 2024 [3][4] - Despite challenges in the oil and gas sector, the company continues to invest heavily in exploration and production, ensuring future resource availability [5][6] - The company plans to distribute a cash dividend of 0.29 yuan per share, reflecting a dividend yield of 4.28%, which underscores its investment value [7][8] Summary by Sections Financial Performance - In 2024, the company achieved total revenue of 3,074.56 billion yuan, a decrease of 4.29% year-on-year, and a net profit of 50.31 billion yuan, down 16.79% year-on-year [3][4] - The average selling prices for gasoline and diesel fell by 1.4% and 5.5% respectively, while sales volumes decreased by 0.7% and 4.8% [4] Business Segments - The company's natural gas sales volume increased by 10% to 40,805 million cubic meters, with an average price rise of 3.4% to 2,230 yuan per thousand cubic meters, but this growth could not offset losses from refined oil products [4] - Chemical segment revenue grew by 1.7% to 523.9 billion yuan, driven by increases in organic chemicals and synthetic fibers [4] Capital Expenditure and Future Outlook - The company plans to invest 1,643 billion yuan in capital expenditures for 2025, focusing on oil and gas production capacity and exploration projects [5][6] - Forecasted net profits for 2025, 2026, and 2027 are 57.8 billion, 63.8 billion, and 63.5 billion yuan respectively, with corresponding P/E ratios of 12.0, 10.9, and 10.9 [8][10]

Investment Rating - The report maintains a "Buy" investment rating for the company [1][8]. Core Views - The company's profitability is under pressure due to oil price fluctuations and energy transition, with a notable decline in revenue and net profit for 2024 [3][4]. - Despite challenges in the oil and gas sector, the company continues to invest heavily in exploration and production, ensuring a steady increase in reserves and output [5][6]. - The company is set to distribute dividends, highlighting its investment value and commitment to shareholder returns [7][8]. Financial Performance Summary - In 2024, the company achieved total revenue of 30,745.62 billion yuan, a decrease of 4.29% year-on-year, and a net profit of 503.13 billion yuan, down 16.79% year-on-year [3][4]. - The average price for gasoline and diesel per ton decreased by 1.4% and 5.5%, respectively, while sales volumes also declined [4]. - Natural gas sales volume increased by 10% to 40,805 million cubic meters, with an average price rise of 3.4% to 2,230 yuan per thousand cubic meters [4]. Capital Expenditure and Production - The company allocated 82.3 billion yuan for capital expenditure in 2024, focusing on significant breakthroughs in exploration projects [5][6]. - Oil and gas equivalent production reached 515.35 million barrels, a year-on-year increase of 2.2% [5]. Dividend Policy - The company plans to distribute a final cash dividend of 0.14 yuan per share, resulting in a total annual dividend of 0.29 yuan and an expected dividend yield of 4.28% [7][8]. Profit Forecast - The forecasted net profits for 2025, 2026, and 2027 are 577.99 billion yuan, 638.08 billion yuan, and 635.30 billion yuan, respectively, with corresponding P/E ratios of 12.0, 10.9, and 10.9 [8][10].

Core Insights - The global chemical new materials industry is projected to reach a scale of $455 billion in 2024 and $550 billion by 2027, with China's share expected to grow from $165.6 billion in 2024 to $250 billion by 2027, representing a significant increase in market presence [1] Group 1: Industry Growth and Trends - The chemical new materials industry in China has grown 3.4 times over the past decade, accounting for approximately 36.4% of the global market value [1] - During the 14th Five-Year Plan period, China's chemical new materials innovation is expected to enter a new phase characterized by leadership and high-end development [1] Group 2: Development Focus Areas - There is a strong emphasis on developing high-performance materials to meet the needs of strategic emerging industries, including advancements in basic materials and high-end polymers for aerospace and electronics [2] - The industry aims to enhance green production technologies to support carbon neutrality goals, focusing on integrating green hydrogen and electricity into production processes and improving recycling technologies [2] Group 3: Technological Innovations - The development of smart materials that respond to environmental changes is highlighted, with applications in aerospace, smart textiles, and biomedical devices [3] - China Petrochemical Corporation is undertaking significant strategic technology initiatives to fill domestic gaps in chemical new materials, with plans to establish a new research laboratory and a large-scale pilot base for material testing [3]

Core Viewpoint - China Petroleum & Chemical Corporation (Sinopec) reported a decline in revenue and net profit for 2024, primarily due to falling prices and sales of refined oil products [1][2] Financial Performance - In 2024, Sinopec achieved operating revenue of 3.07 trillion yuan, a decrease of 4.3% year-on-year; net profit attributable to shareholders was 50.31 billion yuan, down 16.8% year-on-year; and net profit excluding non-recurring items was 48.06 billion yuan, down 20.82% year-on-year [1] - For Q4 2024, Sinopec's operating revenue was 708.02 billion yuan, a decline of 4.61% year-on-year and 10.42% quarter-on-quarter; net profit attributable to shareholders was 6.07 billion yuan, down 19.09% year-on-year and 29.00% quarter-on-quarter; net profit excluding non-recurring items was 4.09 billion yuan, down 60.72% year-on-year and 51.22% quarter-on-quarter [1] Segment Performance - The exploration and development segment generated revenue of 297.2 billion yuan, down 0.9% year-on-year; the refining segment's revenue was 1.4815 trillion yuan, down 3.2% year-on-year; and the marketing and distribution segment's revenue was 1.7144 trillion yuan, down 5.7% year-on-year [2] - Gasoline sales revenue was 813.8 billion yuan, down 2.1% year-on-year; diesel sales revenue was 562.8 billion yuan, down 10.1% year-on-year; and kerosene sales revenue was 153 billion yuan, down 1.1% year-on-year [3] Market Conditions - International oil prices fluctuated significantly in 2024, with an average Brent crude price of $80.8 per barrel, down 2.2% year-on-year; domestic refined oil consumption decreased by 1.9% year-on-year [3] - The domestic demand for refined oil products, including gasoline, diesel, and kerosene, was 404 million tons, with gasoline consumption down 1.2% and diesel down 5.4% year-on-year [3] Chemical Sector Performance - The domestic chemical market saw a 2.4% year-on-year increase in ethylene equivalent consumption; the chemical segment's revenue was 523.9 billion yuan, up 1.7% year-on-year [4] - The chemical segment faced a loss of 10 billion yuan, an increase in loss of 4 billion yuan year-on-year, due to factors like new capacity release and reduced margins [4] Dividend and Share Buyback - Sinopec plans to distribute a total dividend of 0.286 yuan per share for 2024, with a payout ratio of 68.94%, remaining stable compared to the previous year; the total amount for dividends and share buybacks is expected to reach 370 billion yuan, with a profit distribution ratio of approximately 75% [6][7] Capital Expenditure - For 2025, Sinopec plans to reduce capital expenditure to 164.3 billion yuan, a decrease of 10.7 billion yuan or 6% year-on-year, with specific reductions in exploration and development, refining, and marketing segments [8]

Investment Rating - The report upgrades the investment rating to "Buy" based on expected improvements in the refining business by 2025 [2][5]. Core Views - The refining business is currently under pressure, but improvements are anticipated in 2025 as domestic refining capacity decreases, benefiting the main refineries [2][10]. - The company has adjusted its earnings per share (EPS) forecasts for 2025-2026 to 0.53 and 0.59 yuan respectively, with a new target price set at 7.42 yuan [2][5]. Financial Performance Summary - **Revenue**: The company reported revenues of 3,074,562 million yuan in 2024, a decline of 4.3% year-on-year. Projections for 2025 and 2026 are 2,956,403 million yuan and 2,798,092 million yuan respectively, indicating a continued downward trend [4][10]. - **Net Profit**: The net profit attributable to the parent company for 2024 is projected at 50,313 million yuan, down 16.8% from the previous year. Expected net profits for 2025 and 2026 are 64,417 million yuan and 71,499 million yuan respectively [4][10]. - **EPS**: The EPS for 2024 is expected to be 0.41 yuan, with forecasts of 0.53 yuan for 2025 and 0.59 yuan for 2026 [4][10]. - **Profit Margins**: The gross margin is projected to improve from 15.5% in 2024 to 17.1% in 2026, while the net margin is expected to rise from 1.6% in 2024 to 2.6% in 2026 [4][10]. Industry Outlook - The report highlights a potential turning point in the industry as domestic small refineries face regulatory pressures, which may lead to improved market conditions for major refineries like the company [10]. - The company is also focusing on technological innovation and transitioning into a comprehensive energy service provider, which includes advancements in hydrogen energy and electric vehicle charging services [10].

Investment Rating - The investment rating for the company has been upgraded to "Buy" [2][5] Core Views - The refining business is under pressure, but improvements are expected in 2025 as domestic refining capacity decreases, benefiting the company's main refining operations [1][10] - The company has adjusted its earnings per share (EPS) forecasts for 2025-2026 to 0.53 and 0.59 yuan respectively, with a new target price set at 7.42 yuan [2][5] Financial Performance Summary - Revenue for 2023 is projected at 3,212,215 million yuan, with a year-on-year decline of 3.2% [4] - The net profit attributable to the parent company for 2023 is expected to be 60,463 million yuan, down 9.9% year-on-year [4] - The company's gross margin is forecasted to improve from 15.6% in 2023 to 17.6% by 2027 [4] - The net profit margin is expected to increase from 1.9% in 2023 to 2.6% in 2026 and 2027 [4] Industry Outlook - The industry is anticipated to experience a turning point as regulatory pressures on small-scale refineries increase, leading to a recovery in market share and pricing for major refineries like the company [10]

Investment Rating - The report assigns a "Buy" rating to the company, indicating a positive outlook for future performance [10]. Core Insights - China Petroleum & Chemical Corporation (Sinopec) is recognized as one of the largest integrated energy and chemical companies in China, with leading positions in refining and ethylene production [2][5]. - The company is expected to benefit from stable oil production and high natural gas growth, alongside a favorable oil price environment, which will enhance profitability [6][10]. - The refining and chemical sectors are anticipated to see improved profitability due to recovering demand and a slowdown in supply growth [7][10]. - The sales segment is projected to experience growth from recovering price spreads and the expansion of non-oil businesses [8][10]. - Sinopec is focusing on clean energy and high-value materials, aiming to become a leader in the hydrogen energy sector and enhance its high-end chemical product offerings [9][10]. Summary by Sections Exploration and Development - The company maintains stable crude oil production while experiencing significant growth in natural gas output, with a compound annual growth rate (CAGR) of 6.90% from 2020 to 2024 [34]. - Sinopec's oil and gas business is supported by steady reserves and ongoing exploration efforts, ensuring long-term stability [34][43]. Refining and Chemicals - The global refining growth rate is expected to be limited, with domestic capacity expansion nearing its end in 2023, leading to improved profitability in the refining sector [7][10]. - The company is actively pursuing transformation by reducing oil dependency and increasing chemical production, which enhances its competitive edge [7][10]. Sales - The recovery of the price spread between wholesale and retail gasoline and diesel is expected to improve the profitability of the sales segment [8][10]. - Sinopec is optimizing its terminal network and expanding non-oil business initiatives, which are anticipated to drive growth [8][10]. New Energy and New Materials - The company is committed to developing the hydrogen energy industry, which is crucial for achieving carbon neutrality goals [9][10]. - Sinopec is focusing on high-end chemical products to reduce reliance on imports and enhance domestic production capabilities [9][10].

v 1.3.0 FF305 | | | B. Shares redeemed or repurchased for cancellation but not yet cancelled as at the closing balance date (Notes 5 and 6) | | ■ Not applicable | | | | --- | --- | --- | --- | --- | --- | --- | | 1). | Shares repurchased for cancellation but not yet cancelled | 138,000 | 0.001 % | HKD | 4 3 | + | | | Date of changes 23 December 2024 | | | | | | | 2)- | Shares repurchased for cancellation but not yet cancelled | 23,800,000 | 01 % | HKD | 4 14 | | | | Date of changes 24 March 2025 | | | | | | ...

Core Viewpoint - China Petroleum & Chemical Corporation (Sinopec) faced pressure on its performance due to fluctuating oil prices, reporting a decline in both revenue and net profit for 2024 [1][2]. Financial Performance - In 2024, the company achieved operating revenue of 3,074.6 billion yuan, a decrease of 4% year-on-year, and a net profit attributable to shareholders of 50.3 billion yuan, down 17% year-on-year [1]. - For Q4 2024, operating revenue was 708.02 billion yuan, a decline of 4.6% year-on-year and 10.4% quarter-on-quarter, with a net profit of 6.07 billion yuan, down 19.1% year-on-year and 29% quarter-on-quarter [1]. - The upstream segment saw an increase in profit, with exploration and development profits reaching 49.1 billion yuan, an increase of 29% year-on-year [1]. Price and Volume Metrics - The average oil price in 2024 was $72.5 per barrel, a decrease of 1.7% year-on-year, while the gas price increased from 1.78 yuan per cubic meter to 1.80 yuan, up 1.5% year-on-year [1]. - The total oil and gas equivalent production was 515 million barrels, an increase of 2.2% year-on-year, exceeding the 2024 target of 1% growth [1]. Downstream Performance - The refining segment reported an operating profit of 6.3 billion yuan, down 67% year-on-year, primarily due to falling refined oil prices and reduced diesel sales [2]. - The chemical segment experienced an operating loss of 14 billion yuan, worsening by 38% year-on-year [2]. - The marketing and distribution segment's profit decreased by 31% year-on-year to 17.7 billion yuan, attributed to weak diesel consumption and the rise of electric vehicles [2]. Shareholder Returns - The company declared a total cash dividend of 36.9 billion yuan for 2024, with a payout ratio of approximately 73%, resulting in a dividend per share of 0.286 yuan [2]. - The A-share dividend yield was 5.3%, while the H-share pre-tax dividend yield was 8.1%, translating to a post-tax yield of 6.4% [2]. Profit Forecast and Investment Rating - The net profit forecasts for 2025 and 2026 have been adjusted to 54.6 billion yuan and 60.3 billion yuan, respectively, with a new estimate for 2027 at 65.5 billion yuan [3]. - The corresponding price-to-earnings ratios for A-shares are projected at 12.8, 11.6, and 10.7 times for 2025, 2026, and 2027, respectively, while H-shares are projected at 9.1, 8.2, and 7.6 times [3]. - The company maintains a "buy" rating, anticipating a recovery in downstream refining profitability and leveraging its integrated refining and chemical industry advantages [3].