According to the Zhitong Finance and Economics APP, Bank of America Merrill Lynch released a research report stating that China Petroleum & Chemical Corporation (00386) has promised that the dividend payment ratio for the next three years will not be lower than 65%. At the same time, it announced a plan to use no less than 0.8 billion yuan (RMB, the same below), and no more than 1.5 billion yuan of its own funds to repurchase A-shares. These measures are in line with the bank's expectations, but are considered positive surprises for the market. The bank still bullish on Sinopec's 8% dividend yield, relatively stable profits, and not high valuation. The report gives it a "buy" rating for H and A shares, with target prices of HK$5.5 and RMB 7.8 respectively.

The report points out that Sinopec's after-tax net profit in the middle term increased by 3% year-on-year to 37.1 billion yuan, slightly higher than the bank's and market's expectations. This is mainly due to the improvement in profit margin of third-party chemical products and petroleum trading income, but the profit of the refining business remains weak. The interim dividend is 0.146 yuan per share, with a dividend payment ratio of 50% according to Chinese Generally Accepted Accounting Principles. Sinopec's capital expenditure in the first half of the year was 56 billion yuan, a 25% decrease from the same period last year, which is 32% of the annual target. Operating cash flow was 42 billion yuan, but free cash flow was negative 14 billion yuan.