Gelonghui, January 29 | Citi published a research report stating that the mining rights tax introduced from 2017 to 2023 had a negative impact on CNPC and Sinopec's profits last quarter. It is expected to be about 20 billion yuan and 7 billion yuan respectively. At the same time, dividends were unavoidably affected, but the bank believes that less asset impairment and higher payout ratios can cushion the impact on dividends. Based on the above reasons, the bank lowered CNPC's profit forecasts for last year, this year and next year by 5% to 10%, while Sinopec lowered its target price by 4% to 16%. The target price of CNPC was reduced from HK$7.9 to HK$7.5, and the target price of Sinopec was also lowered from HK$5.7 to HK$5.3. Both have investment ratings of “buy”. The bank mentioned that it met with 20 investors last week. Although oil prices are lower, most investors still hold high-yield stocks such as CNPC because profit certainty is higher than in other industries. While the mining rights tax is surprising, given that the future impact is manageable, they tend to think it's a one-off. Investors agree that CNOOC has prospects for profitable growth, but they say they will only buy when market sentiment changes.