Sinopec Corp.(600028) 光大证券·2024-10-29 09:16Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of Sinopec, with current prices at 6.44 CNY and 4.51 HKD respectively [2]. Core Views - The report highlights that Sinopec's Q3 2024 performance is under pressure due to falling oil prices and weak refining demand, with a significant year-on-year decline in net profit [4][11]. - Despite the challenges, the upstream business shows resilience, benefiting from high oil prices and ongoing efforts to increase reserves and production [5][6]. - The report anticipates a long-term growth outlook for Sinopec, driven by strategic investments in new energy and materials, as well as an expected recovery in the chemical industry [11]. Summary by Sections Revenue Performance - For the first three quarters of 2024, Sinopec reported total revenue of 23,665 billion CNY, a year-on-year decrease of 4.19%, and a net profit attributable to shareholders of 442 billion CNY, down 16% [3][4]. Business Segment Analysis 1. Upstream Business - The upstream segment achieved an EBITDA of 452 billion CNY, up 8.6% year-on-year, with crude oil production at 211.29 million barrels, a slight increase of 0.3% [5][6]. - The average price of crude oil for the first three quarters was 76.6 USD/barrel, reflecting a minor increase compared to the previous year [6]. 2. Refining Business - The refining segment's EBITDA fell to 61.56 billion CNY, a decline of 65.3% year-on-year, primarily due to weak diesel demand and narrowing refining margins [7][8]. - Total crude processed was 19.069 million tons, down 1.6% year-on-year, with gasoline production increasing by 4.1% [7]. 3. Sales and Distribution - The sales segment reported an EBITDA of 199 billion CNY, down 25% year-on-year, impacted by weak diesel consumption and the rise of electric vehicles [8]. 4. Chemical Business - The chemical segment recorded an EBITDA loss of 48 billion CNY, although this represented a reduction in losses compared to the previous year [9]. Share Buyback and Investor Returns - As of September 30, 2024, Sinopec has initiated a share buyback program, repurchasing 7.49 million A-shares and 111 million H-shares, reflecting a commitment to enhancing shareholder value [10]. Profit Forecast and Valuation - The report revises profit forecasts for 2024-2026, projecting net profits of 571 billion CNY (down 19%), 611 billion CNY (down 19%), and 655 billion CNY (down 18%) respectively, with corresponding EPS estimates of 0.47, 0.50, and 0.54 CNY [11][12].