Performance is in line with expectations: Sinopec released its 2023 annual report. The company achieved revenue of 3212.215 billion yuan, -3.2% year over year, and realized net profit to mother of 60.463 billion yuan, -9.9% year over year. The annual results were in line with expectations. Judging from the operating conditions of various sectors, in 2023, the company's exploration and development division achieved operating income of RMB 45 billion, -16.3%; the refining division achieved operating income of RMB 20.6 billion, +68.8%; the marketing and distribution division achieved operating revenue of RMB 25.9 billion, +5.7% year on year; and the chemical division achieved operating loss of 6 billion yuan, a year-on-year loss of 8.1 billion yuan.
Production and sales have increased, and cost control has been effective: the company achieved good operating results by increasing production and controlling costs in the external environment of falling oil prices and oversupply in the chemical market in 2023. In terms of exploration and development, the company's annual oil and gas equivalent production volume was 504.09 million barrels, +3.1% year on year; in terms of refining production, the company's annual crude oil processing volume was 257 million tons, +6.3% year over year, total annual sales volume of refined oil products was 239 million tons, +15.6% year over year; in terms of chemical products, the company's annual ethylene production was 14.31 million tons, +6.5% year on year, and total annual chemical product operating volume was 83 million tons, +1.1.1% year on year. In 2023, the company's annual oil and gas cash operating costs were RMB 755.2 per ton, -2.3%; in 2023, the refining unit cash operating cost was 212.3 yuan/ton, -4.8% compared to the same period last year.
Maintaining high cash dividends: The company proposes to pay a cash dividend of 0.2 yuan (tax included) per share for the end of 2023, plus cash dividends of 0.145 yuan (tax included) per share for half a year, and a cash dividend of 0.345 yuan (tax included) per share for the whole year. The ratio of net profit attributable to shareholders of listed companies is 72.1%. Plus the repurchase amount during the year, the dividend ratio is 75%. Based on the closing price on March 26, the company's A share dividend ratio was 5.6%.
According to the company's 2023 annual report data, we lowered the price forecast for refined oil products and chemical products and raised the cost rate. We adjusted the company's net profit for 2024-2026 to 654.80, 758.23, and 84.852 billion yuan (the original 24-25 forecast was 750.82 billion yuan, 80.571 billion yuan), and adjusted the target price to 7.02 yuan according to the comparable company's PE 13 times after the 24-year adjustment, and adjusted the target price to 7.02 yuan.
Risk warning
Crude oil prices fluctuated greatly; demand for refined products declined; annual production fell short of expectations.