Sinopec (600028): The marketing division is the mainstay oil refining division and is bound to exceed expectations

Sinopec (600028): The marketing division is the mainstay oil refining division and is bound to exceed expectations

Investment Highlights Third Quarter Results: In line with expectations, 北京夜生活网 Sinopec deducted non-net profit of US $ 415 billion in the first three quarters, and the length remained unchanged.

3%; operating income increased by 7 in ten years.

73%; in the single quarter, non-net profit was deducted by 110 in the third quarter.

9 ‰, the previous budget was 36%; the chain increased by 31%; the overall performance was in line with expectations.

Segmentation: The marketing division is the mainstay exploration and development division: the oil and gas equivalent output has not changed much, mainly due to changes in crude oil and natural gas prices; the exploration division has mainly reversed losses due to rising natural gas prices.

Due to 7%, the realized price of crude oil decreased by 9 compared with the same period last year.

7%; Refining Business Unit: Exceeded expectations and the downside risks have not completely ended. The operating income 青岛夜网 of the Refining Business Unit was only US $ 3.4 trillion in the third quarter, a sequential decrease of 78%; it may be due to the decline in crude oil prices and the loss of refining inventory.
Considering that in 2019, Zhejiang Petrochemical, Hengyi Petrochemical Brunei Project and other projects have not yet been fully put into operation, the company’s refining department’s downside risks have been completely released.

Marketing and distribution: Mainstay, better-than-expected; the company’s retail sales of refined oil 9180 gradually increased.

1%; realized operating income of RMB 232.

4.5 billion, of which the operating income in the third quarter was 85.

3.6 billion, an increase of 24 from the previous month.

7%.

We estimate that this is due to the reduction in the cost of oil products produced outside the company.

Risk Tips-the risk of a sharp drop in crude oil prices; the risk of shocks to the refining business;-the risk of security incidents and the impact of trade war on crude oil supplies;

Earnings forecasts and estimates maintained from 2019 to 2021 are 52.5 billion, 55.5 billion, and 63.2 billion; PE is 11.

43 times, 10.

81 times and 9.

49 times; maintaining the company’s overweight rating.

It is possible that the future potential exceeds expectations: the elasticity of upward fluctuations in crude oil prices; and the company’s Zhenhai Refining and Petrochemicals, Sinochem Refining and Chemicals putting into operation