HTSC published a report stating that since the fourth quarter, as the Northern Hemisphere enters the seasonal off-peak, the quarterly average price of Brent Crude Oil has fallen by 10.7% year-on-year and 6% quarter-on-quarter to $74.01 per barrel. Against the backdrop of overall relaxed global supply, oil prices may face downward pressure in the short term. In terms of refining and chemicals, the domestic PMI has returned above the boom-bust line since the fourth quarter, indicating signs of warming in Infrastructure activities and Logistics transport, with the price differential of diesel and some refined products recovering.
The company believes that Sinopec (00386.HK) has significant upstream and downstream synergy advantages. This year, with the recovery in demand and the optimization of the supply pattern for some products, profitability is expected to continue to improve, maintaining a 'Buy' rating.
Considering the increase in the price differential of domestic diesel and some refined products in the fourth quarter of last year, the company has adjusted its assumptions for the gross margin of the refining and chemicals sector for last year by 0.3/0.1 percentage points to 1.7%/1.6%, thereby revising the company's net profit forecasts for 2024 to 2026 to 56.5 billion, 67.7 billion, and 75.6 billion yuan respectively (previous forecasts were 54.9 billion, 68 billion, and 75.8 billion yuan). The year-on-year growth rates are -6.6%/+19.9%/+11.6%. The Target Price for the A/H shares is set at 8.12 yuan/6.09 HKD (previously 7.56 yuan/6.15 HKD).
