The incident company released its 2019 annual performance forecast. The announcement shows that according to preliminary estimates, according to Chinese corporate accounting standards, the company's net profit attributable to shareholders of listed companies in 2019 is expected to be around RMB 9.1 billion, an increase of 540.6% over 2018. Comment China's petroleum is highly dependent on the outside world, oil consumption continues to grow, and energy security is facing certain challenges. Benefiting from the requirements to guarantee the country's energy security, Sinopec has increased capital investment in exploration and development to benefit the company's oilfield service industry. Benefiting from the sharp rise in the volume and price of natural gas and the maintenance of medium to high oil prices, Sinopec's operating income from the exploration and development sector was RMB 8.718 billion in the first three quarters of 2019, an increase of 9.799 billion yuan over the same period last year. Under the requirements of safeguarding the country's energy security, the company spent 78 billion yuan in capital expenditure in the first three quarters, of which 34.751 billion yuan was spent on exploration and development, an increase of 75.86% over the previous year. The company benefited the most obvious. Domestic oil and gas demand continues to grow, and heightened geopolitical risks spur oil prices to rise. Freight charges for crude oil and LNG tend to increase due to the influence of geopolitical factors in the Middle East. The easing of the trade dispute between China and the US will cause imports of large amounts of oil and gas resources to shift from the Middle East to the US. A sharp increase in shipping distances will also lead to an increase in freight rates, which will increase the price of domestic oil and gas production in disguise, thus benefiting oilfield service companies that focus on domestic business. In December 2019, the establishment of the State Pipeline Network Corporation was officially announced in Beijing. The market concentration of pipeline construction companies is very high. China's pipeline investment has continued to decline since 2013. Petrochemical oil services are the main force in the construction of long-distance gas pipelines and gas storage depots in China, and the company is expected to fully benefit from the bottoming out of pipeline investment. Profitability predicts that the company will benefit from increased domestic investment to ensure energy security. Since domestic business accounts for more than 70%, the improvement in performance will be even more obvious. The estimated operating income for 2019-2021 is 70, 78 billion yuan, and 86 billion yuan respectively, achieving EPS of 0.05, 0.07, and 0.08 yuan/share, respectively, and corresponding PE of 49, 35, and 29 times, respectively, and continues to be rated as “increased holdings”. Risk warning: The implementation rate of the OPEC production limit agreement is too low, the increase in US shale oil and gas production far exceeds expectations, the sharp decline in international oil and gas demand, and the oil and gas reform plan has not been implemented in substance.