Jingu Finance | Haitong International issued a research report, stating that Sinopec Corp (00386) achieved revenue of 2366.541 billion yuan in the first three quarters of 2024, a decrease of 4.2% year-on-year; net profit attributable to the parent company's shareholders was 44.247 billion yuan (equivalent to earnings per share of 0.37 yuan), a year-on-year decrease of 16.5%. Looking at the data for a single quarter, the company achieved a net profit attributable to the parent company of 8.544 billion yuan in the third quarter, a year-on-year decrease of 52.1%.

The bank stated that the average prices of Brent crude oil for the first three quarters of this year were 81.76, 85.03, and 78.71 US dollars per barrel, with overall oil prices declining in the third quarter, which had a certain impact on the company's various businesses. The profitability of each business sector decreased to varying degrees on a quarter-on-quarter basis. In addition, in the third quarter of this year, the company's oil and gas production volume was 0.128 billion barrels, a year-on-year increase of 1.68% and a quarter-on-quarter decrease of 0.37%. The stable growth in production volume helped maintain relative stability in the profitability of this business sector for the company. In the third quarter, this business sector achieved operating revenue of 69.62 billion yuan, a year-on-year decrease of 6.09%; realized operating income of 13.547 billion yuan, a quarter-on-quarter decrease of 1.62%. In the third quarter, the company's refining business generated revenue of 376.731 billion yuan, a year-on-year decrease of 7.31%; realized operating income of -0.539 billion yuan, the first quarterly loss since 2023. The decline in crude oil prices has put pressure on the company's refining costs; inventory losses have also increased operational pressure.

The bank expects the company's EPS for 2024-2026 to be 0.60, 0.61, and 0.62 yuan/0.67, 0.68, 0.69 Hong Kong dollars, with a BPS of 6.92 yuan/7.70 Hong Kong dollars in 2024. Combining with the valuation levels of comparable companies, based on the 2024 BPS and a PB ratio of 0.8 times, a reasonable value range of 5.54 yuan/6.09 Hong Kong dollars (corresponding to a 2024 PE ratio of 10 times) is given, maintaining an “outperform the market” investment rating.