HTSC·2026-01-09 05:16Investment Rating - The report maintains a "Buy" rating for both A and H shares of the company, with a target price of RMB 7.98 and HKD 6.26 respectively [6]. Core Insights - The proposed restructuring between Sinopec Group and China Aviation Oil is expected to enhance the competitiveness of China's aviation fuel industry by integrating aviation fuel production and sales, optimizing the retail system, and facilitating overseas trade [2][3]. - The demand for aviation fuel is anticipated to grow steadily due to the recovery in air travel and fleet expansion, which will support moderate growth in aviation fuel demand [3]. - The company is expected to benefit from the integration advantages post-restructuring, although it may face increased related-party transactions [3][4]. Summary by Sections Company Overview - Sinopec Group is the world's largest refining company and China's largest aviation fuel producer, with crude processing and aviation fuel production volumes of 186.4 million tons and 25.7 million tons respectively in the first three quarters of 2025, showing a year-on-year change of -2.2% and +6.5% [2]. Financial Forecasts - The net profit forecast for 2025 has been adjusted down to RMB 35.9 billion, a decrease of 2.3%. The net profit forecasts for 2026 and 2027 are maintained at RMB 46.3 billion and RMB 54.6 billion respectively, with corresponding EPS of RMB 0.30, 0.38, and 0.45 [4][10]. - The revenue for 2025 is projected to be RMB 297.3 billion, reflecting a year-on-year decline of 3.3% [10]. Valuation - The report assigns a price-to-earnings (P/E) ratio of 21.0x for A shares and 15.0x for H shares for 2026, based on the company's integrated advantages and transformation into new materials and non-oil businesses [4][11].