Zhi Tong Cai Jing·2025-08-04 07:18Group 1 - The core viewpoint of the report is that the target prices for China Petroleum (601857) and Sinopec (600028) have been lowered due to challenging market conditions in the downstream oil sector [1] - The target price for China Petroleum has been adjusted from HKD 4.6 to HKD 4.5, while Sinopec's target price has been reduced from RMB 6.5 to RMB 6.3 [1] - Despite the target price adjustments, the firm maintains an "outperform" rating for Sinopec's H-shares and A-shares, indicating a preference order among the "three oil giants" [1] Group 2 - Sinopec has issued a profit warning for the first half of 2025, indicating weaker profitability in the second quarter of 2025, which reflects ongoing challenges in the domestic oil downstream sector [1] - The market appears to overestimate the potential benefits for Sinopec and other Chinese refining companies from China's anti-involution policies, according to the report [1] - The firm has revised its earnings forecasts for Sinopec downwards by 4% to 5% for the fiscal years 2025 to 2027, in light of the anticipated weak performance in the second quarter of 2025 [1]