[ET Net News Agency, 16 July 2018] HSBC Global Research lifted its target price for
Sinopec (00386) to HK$9.35 from HK$8.78, and reiterated its "buy" rating.
Under the low-sulphur cap regulations (commonly referred to as IMO 2020), despite the
falling diesel yield, a double benefit should accrue in the form of both wider crude price
discounts and higher middle distillate cracks, said the research house.
HSBC expects an EPS impact of +17% in 2020, equivalent to US$1.7/bbl.
Meanwhile, downstream results that accrue from the refining, marketing and chemical
segments should provide solid share price support in 2018. It noted that Sinopec has the
strongest balance sheet in Asia Pacific energy large cap universe. This covers multiple
years of high dividend payouts or strategic M&A in addition to basic capex.
HSBC raised its 2018-20 estimates of Sinopec's refining operating profit by 14%/36%/28%%
and net income by 8%/19%/16%, based on its assessment of the net impact of the regulatory
changes. (KL)
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00386 SINOPEC CORP
Nominal 
4.860 +0.090 (+1.887%) Others
16/07/2018 14:29
[I-bank focus]HSBC raises Sinopec (00386) to HK$9.35
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