China Petroleum & Chemical Corp Class A
600028: XSHG (CHN)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
¥3.20 | Btmgl | Przbrspx |
Sinopec’s Q3 Results See Weaker Downstream Contributions; Upstream Earnings Remain Robust
Sinopec’s cumulative nine months 2022 net profit of CNY 57.3 billion was 5.9% lower year on year. The results were within our expectations, with strong upstream earnings offset by weaker downstream performance. We keep our fair value estimate at HKD 5.50 per H-share (CNY 4.76 per A-share), after taking into account our latest energy price and foreign exchange assumptions. We think Sinopec’s H-shares are currently undervalued, but we favor CNOOC given its upstream focus amid high oil prices, cost efficiency and robust production growth.