The Zhitong Finance App learned that Morgan Stanley released a research report stating that it “increased” the rating for Sinopec Refining and Chemical Engineering (02386) and indicated that the stock was no longer covered. The target price was raised by 31.9% to HK$6.2 from HK$4.7.

Damo said it is forecasting 4% and 2% profit for Sinopec's refining and chemical engineering in 2024 and 2025, but remains confident about the company's new contract acquisition. The main reason for the reduction in the company's foreign exchange earnings (gains) was that the USD/RMB exchange rate fluctuated less than in 2023, and the gross margin forecast was slightly lowered to reflect rising fuel prices.

The bank believes that the continued expansion of production capacity of some large chemical and refining companies may support new orders and revenue from Sinopec's refining and chemical engineering in 2024. Additionally, the “Direct Petroleum Production Chemicals” initiative is likely to bring more jobs to the company.