Sinopec Corp.(600028) 东吴证券·2024-10-29 23:30Investment Rating - The report maintains a "Buy" rating for both A and H shares of Sinopec [1] Core Views - The report highlights that Sinopec's performance has been pressured by a decline in Brent oil prices, leading to a significant drop in profits in Q3 2024 [1] - The upstream segment has seen increased profitability, with exploration and development profits rising by 14% year-on-year [1] - The downstream refining and chemical segments have experienced reduced profitability due to falling oil prices and narrowing margins [1] - The report emphasizes the company's commitment to shareholder returns, projecting a dividend payout of 361 billion RMB for 2024, resulting in a dividend yield of 4.8% for A shares and 5.9% for H shares after tax [1] - The report adjusts profit forecasts for 2024-2026, reflecting a more conservative outlook on net profits [1] Financial Performance Summary - For the first three quarters of 2024, Sinopec reported total revenue of 2,366.54 billion RMB, a year-on-year increase of 4.2%, while net profit attributable to shareholders was 44.25 billion RMB, down 16.5% year-on-year [1] - In Q3 2024, revenue was 790.41 billion RMB, a decrease of 9.8% year-on-year, and net profit was 8.54 billion RMB, down 52% year-on-year [1] - The upstream segment's operating profit was 38.1 billion RMB, an increase of 14% year-on-year, while the refining segment's profit fell by 67% to 5.7 billion RMB [1] - The marketing and distribution segment's profit decreased by 31% to 16.6 billion RMB, primarily due to weak diesel consumption and the rise of electric vehicles [1] Profit Forecast and Valuation - The report projects net profits of 55.5 billion RMB for 2024, 60 billion RMB for 2025, and 63 billion RMB for 2026, with corresponding P/E ratios for A shares of 13.65, 12.64, and 12.03, and for H shares of 8.87, 8.21, and 7.82 [1]