Sinopec Corp.(600028) 光大证券·2024-08-26 13:41Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of Sinopec, with current prices at 6.82 CNY and 5.10 HKD respectively [2]. Core Insights - The company's Q2 performance shows significant improvement year-on-year, with a notable increase in net profit and cash flow, driven by high oil prices and recovering chemical demand [3][4]. - The board has announced a mid-year cash dividend of 0.146 CNY per share, reflecting a slight increase in the payout ratio, which underscores the company's commitment to shareholder returns [12]. - The report projects continued growth in net profit for the years 2024 to 2026, with expected figures of 704 billion CNY, 752 billion CNY, and 802 billion CNY respectively, indicating a positive long-term outlook [13]. Financial Performance Summary - For H1 2024, Sinopec reported total revenue of 15,761 billion CNY, a slight decrease of 1.10% year-on-year, while net profit attributable to shareholders was 357 billion CNY, an increase of 1.69% [3]. - In Q2 2024, the company achieved total revenue of 7,862 billion CNY, down 2.02% year-on-year, but net profit rose by 15.84% to 174 billion CNY [3]. - The cash flow from operating activities for H1 2024 was 423 billion CNY, up 53% year-on-year, with free cash flow reaching 660 billion CNY, an increase of 1,431 billion CNY [4]. Business Segment Analysis - Upstream Business: The upstream segment saw a significant increase in profitability, with an EBIT of 309 billion CNY for H1 2024, up 14.7% year-on-year, driven by high oil prices and increased production [5]. - Refining Business: The refining segment faced challenges, reporting an EBIT of 69 billion CNY, down 38.3% year-on-year, due to weak demand and declining margins [9]. - Sales and Distribution: The sales segment generated an EBIT of 165 billion CNY, a decrease of 10.5% year-on-year, reflecting the impact of market conditions [10]. - Chemical Business: The chemical segment continued to reduce losses, with an EBIT of -21 billion CNY for H1 2024, a significant improvement compared to the previous year [11]. Dividend and Share Buyback Plans - The company has committed to a dividend payout ratio of at least 65% of the net profit, reflecting confidence in its financial health and commitment to shareholder returns [12]. - A new share buyback plan has been initiated, with a budget of 8 to 15 billion CNY, indicating management's positive outlook on the company's future [12].