[ET Net News Agency, 23 March 2021] Morgan Stanley lifted its target price for Sinopec
Engineering Group (SEG) (02386) to HK$5.2 from HK$4.6 and retained its "overweight"
rating.
The research house said SEG registered a net profit of Rmb2.38bn in 2020, up 9%, mostly
in line with Morgan's estimate of Rmb2.37bn. Despite the negative impact from COVID-19 and
likely declined capex from Sinopec, SEG maintained flat revenue in 2020, thanks to 18.7%
growth in petrochemical industries as well as a 91.9% surge in revenue from other
industries, including crude oil/gas storage facilities and the natural gas pipeline
network.
In 2021, SEG now targets domestic new contract value of Rmb49bn, and US$1.5bn for
overseas contracts, slightly higher than its target for 2020, while Morgan believes
investment in petrochemical industries and gas pipeline/storage will remain resilient and
support steady growth for SEG in the next few years. It slightly raised its earnings
forecasts in 2021-22 by 4% on SEG. (KL)