Sinopec Corp.(600028) Guohai Securities·2024-03-26 16:00Investment Rating - The report maintains a "Buy" rating for Sinopec (600028) [1] Core Views - Sinopec's 2023 performance showed a slight decline in revenue and net profit, attributed to fluctuating international oil prices and a competitive market environment [4][5] - The company achieved significant breakthroughs in resource exploration, production increase, and cost reduction, leading to a substantial growth in refined oil sales volume [7][8] - The company is transitioning towards becoming a comprehensive energy service provider, expanding its market share in refined oil and developing new energy solutions [9][10] Financial Performance Summary - In 2023, Sinopec reported total revenue of 32,122.15 billion RMB, a decrease of 3.19% year-on-year, and a net profit of 604.63 billion RMB, down 9.87% year-on-year [3][4] - The fourth quarter of 2023 saw revenue of 7,422.74 billion RMB, a year-on-year decline of 14.17%, and a net profit of 74.97 billion RMB, down 23.79% year-on-year [3][6] - The company's return on equity (ROE) for 2023 was 7.59%, a decrease of 0.91 percentage points from the previous year [3] Segment Performance - Exploration and production segment revenue was 3000.19 billion RMB, down 6.1% year-on-year, with a gross margin of 22.1% [5] - Refining segment revenue was 15,297.86 billion RMB, down 2.9% year-on-year, with a gross margin of 2.4% [5] - Marketing and distribution segment revenue increased by 6.1% year-on-year to 18,184.29 billion RMB, with a gross margin of 5.2% [5] - Chemical segment revenue was 5,153.07 billion RMB, down 4.6% year-on-year, with a gross margin of 1.8% [5] Production and Exploration Achievements - In 2023, Sinopec achieved an oil and gas equivalent production of 504.09 million barrels, a year-on-year increase of 3.1%, and natural gas production of 13,378 billion cubic feet, up 7.1% [7] - The company reported a domestic oil and gas reserve replacement rate of 131% for 2023, with proven oil reserves of 2,003 million barrels, an increase of 41 million barrels year-on-year [7] Future Outlook - The company plans to produce 279.06 million barrels of crude oil and 13,797 billion cubic feet of natural gas in 2024 [7] - The report forecasts net profits for 2024-2026 to be 682 billion RMB, 748 billion RMB, and 804 billion RMB respectively, with corresponding P/E ratios of 11, 10, and 9 [11][50]