[ET Net News Agency, 1 August 2019] Morgan Stanley lowered its target price for Sinopec
(00386) to HK$5.94 from HK$7.43 and maintained its "equal-weight" rating with the lack of
fundamental recovery.
The research house said Sinopec is attractive on valuation, but not on fundamentals. Its
2019 P/E is currently 10.2x, and P/B is 0.8x with ROE of 7%. Despite such cheap valuation,
Morgan thinks the company's downstream businesses are likely to face continuous pressure -
its chemical business is entering a cyclical downturn, and its refinery and marketing
operations are facing more newly established competitors. (KL)