Sinopec (600028) Quarterly Report Commentary: Refining and Chemicals Segment Increases Revenue but Does Not Increase Profits
Matters: The company released the third quarter report for 2019: the first three quarters achieved operating income of 22,333.
1 ppm, an increase of 7 per year.
7%; net profit attributable to mother 432.
8 percent, an increase of -27 per year.
8%; budget benefit 0.
36 yuan, 6 yuan net assets.
Ping An’s point of view: Increasing revenue does not increase profits, and the refining and chemical business drags down the company’s performance: the company experienced an increase in revenue but no increase in profits in the first three quarters, and its revenue increased during the reporting period every ten years.
7%, return to mother’s net profit for ten years downgrade.
On a month-on-month basis, third-quarter revenue was 734.3 billion yuan, a month-on-month decrease of 6.
0%, net profit attributable to mother 119.
400 million, down 27.
9% is the worst single season for reporting routines.
In terms of segments, the operating profit and investment income of the 苏州桑拿网 exploration and development segment in the first three quarters (the same below) totaled 96.
9 trillion, an increase of 19,682% in ten years (the same period last year 0.
4.9 billion); refining plate 206.
800 million, exceeding the ceiling by 62%; chemical sector 192.
9 trillion, an average of 31% in ten years; marketing and distribution sector 254.
3 ‰, an average of 1% for ten years, basically stable.
The increase in performance during the reporting period was mainly due to increased production capacity of the refining and chemical industries, increased industry competition, lower prices of refined oil and chemical products, and increased crude oil procurement costs.
Profit forecast and investment advice: The company’s oil and gas business performed well in the first three quarters, but the refining and chemical business grew at a larger rate. Looking forward to the final forecast, the company’s business in exploration and production and oil and gas sales will grow steadily, and it will still be the highlight of major business.
However, the restructuring of private refining and petrochemicals has been put into production one after another, competition in the refined oil industry has become increasingly fierce, and the prices of chemical products are affected by costs and the macro environment, and it is expected that they will still be under pressure.
Taking all factors into consideration, we adjusted the net profit attributable to mothers for 2019-2021 to be 562, 626, and 689 percent (original values of 608, 681, and 779 percent), and the corresponding EPS was 0.
52 and 0.
57 yuan, the corresponding PE is 10.
5 and 8.
6 times, maintaining the “recommended” level.
Risk reminders: 1) Too high or too low oil prices will adversely affect profits; 2) Competition in the domestic refined oil market will become increasingly fierce in the future; 3) It is necessary to deal with competition from shrinking regional and internal competition abroad; 4) MacroeconomicProsperity has led to a decline in product demand growth; 5) Risks exist in the establishment of the national pipeline network company and the mixed ownership reform of the sales sector; 6) Less than expected progress of projects under construction will affect the company’s profitability.