Soochow Securities·2024-03-25 16:00Investment Rating - The report maintains a "Buy" rating for Sinopec (600028) [1] Core Views - The 2023 annual report highlights a total revenue of 3,212.15 billion yuan, a year-on-year decrease of 3%, and a net profit attributable to shareholders of 60.463 billion yuan, down 10% year-on-year. The fourth quarter of 2023 saw a revenue of 742.3 billion yuan, a 14% decline year-on-year and a 15% decline quarter-on-quarter [2][3] - The company emphasizes shareholder returns, with a total dividend and buyback amounting to 43.575 billion yuan in 2023, including a dividend of 41.2 billion yuan, resulting in a dividend payout ratio of 68.2% [3] - The report projects a gradual recovery in oil product demand and an expansion of overseas price differentials, leading to adjusted net profit forecasts of 64 billion yuan for 2024 and 66.6 billion yuan for 2025 [4] Financial Performance - Total revenue for 2023 was 3,212.15 billion yuan, with a year-on-year change of -3.19%. The net profit attributable to shareholders was 60.463 billion yuan, reflecting a year-on-year decrease of 9.87% [2][4] - The company plans to reduce capital expenditures to 173 billion yuan in 2024, a decrease of 2% from 2023, while targeting an oil and gas production of approximately 509 million barrels of oil equivalent [3] - The balance sheet shows a cash reserve of 165 billion yuan, with a debt-to-asset ratio of 52.7% [3][7] Valuation Metrics - The report provides a price-to-earnings (P/E) ratio of 12.48 for 2023, projected to decrease to 11.79 in 2024 and further to 11.34 in 2025 [4][9] - The price-to-book (P/B) ratio is reported at 0.92, with projections of 0.91 for 2024 and 0.89 for 2025 [4][9] - The expected earnings per share (EPS) for 2024 is 0.53 yuan, with a slight increase to 0.55 yuan in 2025 [4][9]