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GTJAResearch国泰君安研究Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage1of8CompanyReport:Sinopec(00386HK)GraceLiu刘谷+8675523976698+85225097516公司报告:中国石化(00386HK)liugu@gtjas.
com19December2011ToBenefitfromIndustryReforms,Upgradeto'Buy'将受益于行业改革,上调评级至"买入"Rating:BuyUpgraded评级:买入(上调)6-18mTP目标价:HK$9.
30Revisedfrom原目标价:HK$9.
10Shareprice股价:HK$8.
000z4Q11refiningmarginsdonotimprovebecauseBrentcrudeoilpricesmaintainathighlevels.
Petrochemicalmarginsdecreaseqoqandresourcestaxincreases.
Therefore,4Q11resultsareestimatedtocomeunderpressure.
Although1-3Q11resultswerebetterthanexpected,weincreaseourFY11earningsforecastsbyonly1.
4%.
zTherefiningsegmentisexpectednottohavelargelossesagainin2012becauseindustryoperatingenvironmentwillimprovein2012,withmildinflation,flatcrudeoilpricesandtheexpectationoffurthergasolineanddieselpricingreform.
Domesticnaturalgaspricesarealsolikelytorisein2012againstthelowinflationbackdrop.
zThefurtherimplementationofresourcestaxreformnationwidewillfurtherdecreaseFY12earningsby6.
27%.
In2012,althoughresourcestaxwillincreaseandpetrochemicalmarginsareexpectedtodecreaseinthechemicalsegment,therewillnotbelargelossesintherefiningsegment.
WereviseupourFY12-13EPSforecastsby8.
96%and9.
77%respectively.
Inaddition,expectedindustrypolicychanges,includingdomesticgasolineanddieselandnaturalgaspricingreform,andspecialoillevythresholdincrease,areallpositivetotheCompany'searnings.
zDilutioneffectofallconvertiblebondsisabout8.
76%.
However,netgearingratiosareestimatedtodecreaseevenwithaboutyearly8%CAPEXincreaseinFY12-13.
ThehealthyoperatingcashflowalsoisexpectedtolayfoundationfortheCompanytoacquireupstreamassetsortodevelopindifferentbusinessareas.
Theparentcompany'supstreamassetsincreasedcontinuously,whichcreatedgoodconditionsforassetsinjection.
IncreasesinequityinterestsinChinaGas(00384)aretooptimizenaturalgasintegratedbusinesschainbuthaveslightearningsimpacts.
zReviseupwardsthetargetpricefromHK$9.
10toHK$9.
30basedonhigherearningsbutlargerdilutioneffects.
Upgradetheinvestmentratingfrom'Accumulate'to'Buy'becauseofexpectationsofmorefavourableindustrypolicychanges.
z由于今年第4季度布伦特原油维持在高位,炼差应无改善.
石化毛利环比下降,资源税增加.
因此,第4季度业绩有压力.
虽然1-3季度业绩好于预期,我们只上调2011年盈利预测1.
4%.
z2012年预期通胀温和、原油价格持平、以及汽柴油定价将改革,行业经营环境比2011年好,炼油分部将不再有大额亏损.
在低通胀背景下,国内天然气价格也可能上调.
z资源税改革推广至全国令2012年盈利将再下降6.
15%.
2012年虽然资源税上升、化工板块石化毛利预期下降,但炼油板块不再有大额亏损.
我们分别上调12-13年每股盈利预测8.
96%和9.
77%.
另外,预期的行业政策改变,包括汽柴油和天然气价格改革、特别收益金起征点上升,均对公司业绩有正面影响.
z现全部可转债的摊薄效应约为8.
76%.
然而,即使资本开支每年增长8%,净资本负债率仍将于12-13年下降.
健康的经营现金流为公司收购上游资产和扩展其他业务打下基础.
母公司上游资产不断增加,为资产注入创造良好条件.
增加中国燃气(003854)权益可增强天然气一体化,但对盈利影响轻微.
z基于调高的盈利预测但增大的摊薄效应,目标价由9.
10港元略上调为9.
30港元.
由于未来行业政策变动有利的预期,上调投资评级为"买入".
Stockperformance股价表现(35.
0)(25.
0)(15.
0)(5.
0)5.
015.
025.
0Nov-10Jan-11Apr-11Jul-11Oct-11%ofreturnHSISinopecChangeinSharePrice股价变动1M1个月3M3个月1Y1年Abs.
%绝对变动%(0.
50)5.
9612.
99Rel.
%toHSindex相对恒指变动%0.
629.
3032.
49Avg.
shareprice(HK$)平均股价(港元)8.
067.
737.
53Source:Bloomberg,GuotaiJunanInternationalYearEnd年结Turnover收入NetProfit股东净利EPS每股净利EPS每股净利变动PER市盈率BPS每股净资产PBR市净率DPS每股股息Yield股息率ROE净资产收益率12/31(RMBm)(RMBm)(RMB)(%)(x)(RMB)(x)(RMB)2009A1,345,05263,1470.
728121.
49.
74.
3711.
60.
1802.
617.
92010A1,913,18271,8000.
82813.
78.
24.
8331.
40.
2103.
118.
02011F2,318,19674,8390.
8634.
27.
45.
4661.
20.
2193.
416.
82012F2,430,26883,9840.
96912.
26.
66.
2231.
00.
2463.
816.
62013F2,570,02588,7001.
0235.
66.
36.
9950.
90.
2594.
115.
5Sharesinissue(m)总股数(m)86,702.
6Majorshareholder大股东ChinaPetrochemicalCorporation75.
8%Marketcap.
(HK$m)市值(HK$m)693,620.
2Freefloat(%)自由流通比率(%)24.
23monthaveragevol.
3个月平均成交股数('000)89,897.
1FY11Netgearing净负债/股东资金(%)38.
552Weekshigh/low(HK$)52周高/低8.
900/6.
220FY11Est.
NAV(HK$)每股估值(港元)9.
7Source︰theCompany,GuotaiJunanInternational.
19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage2of84Q11resultsareexpectedtodecreaseqoq.
ThegovernmentdecreasedthedomesticgasolineanddieselpricesbyRMB300/tonneon9Oct.
Afterthepriceadjustment,therefiningsegmentcancovercrudeoilcostsofaboutUS$108/bbl.
Buttheninternationalcrudeoilpriceswerehigherthanexpected.
Althoughpricesdecreasedfromthe2Q11highlevelsofUS$117/bblasexpected,4Q11averageBrentcrudeoilpriceisestimatedtobeaboutUS$109/bbl,whichishigherthanourpreviousassumption.
Inaddition,4Q11petrochemicalmarginsalsodecreasedbecausedomesticpetrochemicalspricesdroppedresultingfromeconomicslowdown.
Resourcestaxwillincreaseduetothereformtoimplementnationwidesince1Nov.
Therefore,4Q11resultsareestimatedtocomeunderpressureanddecreaseabout35%qoq.
1-3Q11operatingprofitwasup6.
87%yoytoRMB87,461million,whichwasbetterthanexpected.
Withlower-than-expected4Q11results,weincreaseourFY11earningsforecastsbyonly1.
4%.
Nolargerefininglossesagainin2012becauseoperatingenvironmentisexpectedtoimprove.
1-3Q11operatinglossoftherefiningsegmentwasRMB23,094million.
LossesinFY11areestimatedtobeRMB33,000million.
However,wethinkthereshouldnotbelargerefininglossesagainin2012becauseoperatingenvironmentisexpectedtoimprove.
Firstly,domesticinflationwentdownsinceAugustandCPIdroppedto4.
2%inNovember.
Itiswidelybelievedthatinflationwillbemildin2012.
Secondly,theChinesegovernmentisexpectedtofurtheracceleratethedomesticgasolineanddieselpricingreform,whichshouldfollowinternationalcrudeoilpricetrendsmoreclosely.
TheNDRCmentionedinthepriceadjustmentcircularof9Oct.
that,inordertoimprovetherefinedoilpricingmechanism,thegovernmentmayreducethepriceadjustmentperiodandincreaseadjustmentfrequency,improvepriceadjustmentoperatingmethod,andchangethebenchmarkoils.
Thirdly,weexpectBrentcrudeoilpricetobeflatin2012comparedtothatof2011.
Therefore,industryoperatingenvironmentisbetterthanthatin2011andtheCompany'srefiningsegmentisexpectednottosufferfromlargelossesagain.
Naturalgaspricingmechanismisalsoexpectedtochangein2012againstthelowinflationbackdrop.
ItissaidthatChinahastoimport35%naturalgastomeetdomesticneedof260,000mm3in2015accordingtotheforthcoming12thFiveYearPlanofthenaturalgasindustry.
In2011,PetroChina(00857)willmakehugelossesonitsimportednaturalgasbecausedomesticpricelevelsaremuchlowerthantheimportedgaslevels.
Webelievenaturalgaspricestoincreasein2012againstthemildinflationbackdropandthegrowthtobeabout30%.
Wearestillconservativeonpetrochemicalmarginsin2012-2013.
1-3Q11operatingprofitofthechemicalsegmentwasup128.
4%yoytoRMB23,688million,whichwasmuchbetterthanourpreviousassumptions.
However,becausenewcapacitywillcontinuetocommenceproductioninbothdomesticandtheMiddle-Eastmarkets,togetherwithglobaleconomicslowdown,wearestillcautiousonestimationofpetrochemicalmarginsin2012-2013.
ThefurtherimplementationofresourcestaxreformnationwidehasnegativeimpactsontheCompany'sresults.
SinceJune,2010,thecrudeoilandgasresourcestaxreformhasbeenintroducedinXinjiang.
ThenthereformhasbeenimplementedtothewesternregionofChinaincludingother11provincesfromDec.
,2010.
TheStateCouncilannouncedon10Octtorevisetheresourcestaxpolicy.
Witheffectfrom1Nov.
,2011,producersofmineralandsaltinthePRCandoffshoreChinashouldbetaxed.
Ofwhich,crudeoilandnaturalgasresourcesareleviedbasedon5%-10%ofsalesvalueratherthansalesvolume(RMB14-30/tonneandRMB7-15/Mcm).
Thenthegovernmentsetstheprovisionaltaxrateas5%.
Theannouncementon10Oct.
meansthatthegovernmentfurtherimplementstheresourcestaxreformnationwide.
AccordingtoourcalculationbasedonSinopec'soilfielddistribution,thefurtherimplementationofresourcestaxreformnationwidewillfurtherdecreasesitsFY12earningsby6.
27%.
Theparentcompany'supstreamassetsincreasedcontinuously,whichcreatedgoodconditionsforassetsinjection.
SinopecGroup(Sinopec'sparentcompany)isveryactiveinacquiringoverseasupstreamassetsinrecentyears.
Afteracquisitionsof40%RepsolBrazil,9.
03%SyncrudeandAddaxin2009-2010,theparentcompanyannouncedtoacquireDaylightEnergywithC$10.
08percommonshareforacashconsiderationofapproximatelyC$2.
2b,and30%GalpBrazilfora19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage3of8considerationofUS$3.
54binOctoberandNovemberrespectivelythisyear.
Basedonourcalculation,theparentcompany'sremainingequityshareofoverseascrudeoilproductionwasabout14.
87milliontonnesin2010.
Plustheacquiredassets,theoverseasproductionwasmorethan70%ofSinopec'stotalproductioninFY11.
TheCompanystatedthatitwillstrengthenitsexplorationandproductionbusinessaggressivelyandrapidly.
Therefore,iftheparentcompanyinjectspartofoverseasupstreamassetsintothelistedcompany,itwillnotonlyenhanceSinopec'sprofitability,butalsoimproveSinopec'sbusinessmodel,whichcurrentlyhasrelativelysmallscaleofupstreamassets.
Raisemorecapitaltopromotedevelopmentbuthavelargerdilutioneffectsinshort-term.
TheCompanyannouncedtoissueRMB20,000milliondomesticcorporatebondsandRBM30,000millionAShareconvertiblebonds.
Thecorporatebondsaretosatisfythedemandforworkingcapitalandreducethefinancingcosts.
TheproceedsfromtheissuanceoftheconvertiblebondsareproposedtobeappliedontheShandongLNGProjectandaseriesofrefiningprojects.
Sofar,dilutioneffectofallconvertiblebondsoftheCompanyisabout8.
76%.
However,withhealthygrowthofoperatingcashflow,weestimatethatthenetgearingratiotodecreaseevenwithaboutyearly8%CAPEXincreasesinFY12-13.
ThehealthyoperatingcashflowalsowilllayfoundationfortheCompanytoacquireupstreamassetsortodevelopindifferentbusinessareas.
IncreasesinequityinterestsinChinaGas(00384)tooptimizenaturalgasintegratedbusinesschainbuthaveslightearningsimpacts.
ENNEnergy(02688)andSinopecannouncedtomakeavoluntaryconditionalcashofferofHK$3.
50persharetoacquirealloftheoutstandingsharesintheissuedsharecapitalandcancelalloutstandingoptionsofChinaGas.
ThemaximumofferconsiderationisaboutHK$16,699,756,843andwillbefinancedasto55%byENNEnergyand45%bySinopec(HK$7,514,890,579).
SinopecisexpectedtopayaboutHK$5,553millionfortheofferassuming25%sharesheldbypublic.
Sinopecheld4.
79%oftheissuedsharecapitalofChinaGasbeforetheofferandwillholdfrom24.
86%(assumingminimumacceptance)to33.
75%(assuming25%publicfloatand45%ofthetotalconcertparties).
Theofferpricehas25.
0%premiumovertheclosingpriceofHK$2.
80onthelasttradingdateandhas40.
1%premiumovertheaverageclosingpriceforthelast30tradingdays.
Theofferpriceisequivalentto27.
9xFY11APEand1.
99xFY11APB,comparedtothesectoraverageofabout21.
9xand2.
38xrespectively.
ChinaGasisagasservicesoperatorandserviceprovider.
AsofSeptember30,2011,ithadsecured151citypipedgasprojects(withexclusiveconcessionrights),9long-distancenaturalgaspipelineprojects,112compressednaturalgasrefillingstationsforvehicles,1naturalgasdevelopmentprojectand44LPGdistributionprojectsin20provinces,autonomousregionsanddirectlyadministeredcities.
SinopecGroupsignedaframeworkwithAPLNGon12Dec.
topurchasemore330mt/yLNGto760mt/yfromAustraliauntil2035andcouldincreaseitsequityinterestto25%from15%.
Sinopeccanexpandrapidlyitssupplyofnaturalgastoendusersandoptimizeitsintegratedbusinesschain.
Theofferisstillsubjecttoapprovalsbyauthoritiesandshareholders.
ImpactsonFY12earringsareexpectedtobelowerthan0.
5%.
WereviseupourFY12-13earningsforecastsby8.
96%and9.
77%respectively.
In2012,althoughresourcestaxwillincreaseandpetrochemicalmarginsareexpectedtodecreaseinthechemicalsegment,therewillnotbelargelossesintherefiningsegment.
Inaddition,webelieveexpectedindustrypolicychanges,includingdomesticgasolineanddieselpricingreform,naturalgaspricereformandspecialoillevythresholdincrease,areallpositivetotheCompany'searnings.
Ifthegovernmentincreasesnaturalgasbenchmarkex-factorypricebyRMB100/cm3,or7.
8%,itwillincreasetheCompany'sFY12earningsby1.
18%.
IfthegovernmentraisesthespecialoillevythresholdfromUS$40/bbltoUS$50/bbl,itwillincreasetheCompany'sFY12earningsby6.
58%.
Ourearningsforecastsdonotreflectallfavourableindustrialpolicychanges.
ReviseupwardstargetpricefromHK$9.
10toHK$9.
30;upgradeinvestmentratingfrom'Accumulate'to'Buy'.
WereviseupwardsthetargetpricefromHK$9.
10toHK$9.
30basedonhigherearningsbutlargerdilutioneffects.
Thetargetpricecorrespondsto8.
62xFY11PER,7.
68xFY12PERand7.
27xFY13PER,whichisalsoequivalentto1.
36xFY11P/B,1.
20xFY12P/Band1.
06xFY13P/B.
Weupgradetheinvestmentratingfrom'Accumulate'to'Buy'becauseofexpectationsofmorefavourableindustrypolicychanges.
19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage4of8SinopecValuationComparisonPEPBROE%Yield%P/CFEV/EBITDACompanyPriceTradecurrency201020112012201320102011201220132011201120112011Average:9.
77.
87.
77.
21.
61.
41.
31.
118.
84.
44.
74.
0PETROCHINA9.
0610.
09.
58.
78.
21.
51.
31.
21.
114.
24.
74.
45.
9SINOPEC87.
97.
46.
86.
51.
31.
21.
11.
016.
83.
54.
14.
9ENI15.
098.
07.
36.
86.
21.
11.
00.
90.
913.
96.
93.
43.
3ROYALDUTCHSH-A2,275.
511.
48.
17.
87.
41.
51.
31.
21.
117.
84.
75.
23.
8EXXONMOBIL80.
1613.
49.
49.
78.
92.
72.
42.
11.
926.
52.
36.
84.
5BPPLC445.
756.
16.
16.
15.
81.
41.
21.
00.
920.
64.
14.
63.
4CHEVRON100.
8610.
87.
37.
87.
51.
81.
61.
41.
323.
93.
15.
03.
2CONOCOPHILLIPS68.
411.
57.
98.
17.
61.
41.
41.
31.
116.
93.
84.
83.
5TOTAL36.
8557.
97.
17.
06.
71.
41.
21.
11.
018.
56.
24.
13.
2Source︰BloombergSinopecIndustryPolicyChangeEffectSensitivityEffectsonFY12PBTFurtherdomesticgasolineanddieselpricingreformRefiningsegmentwillreturntooperatingprofitaboutRMB15,000-25,000mfromlossofaboutRMB33,000minFY11.
Naturalgaspricereform,wellheadpriceupRMB100/km3+1.
18%Adjustmentinthresholdofspecialoillevy,fromUS$40/bbltoUS$50/bbl+6.
58%Source:GuotaiJunanInternationalSinopecGroupAcquisitionActivitiesProductionReserveDateProjectConsiderationCrudeoilNaturalgasBoeCrudeoilNaturalgasBoeNov.
,2011GalpBrazil30%US$3.
54b2015:21.
3kboe/d2024:112.
5kboe/dOct.
,2011DaylightEnergyC$2.
2b2010:oil&liquid:17,017bbl/d2010:144,866kcf/d2010:41,161boe/doil&liquid:23,995kbbl322,286mmcf77,709kboeMay,2011Pecten80%US$538m2011:11.
9kbbl/d2P:3.
59mbblOct.
,2010RepsolBrazil40%US$7.
109b8.
8mt/y1.
86bcm/y10.
57mtoe881mbblApr.
,2010Syncrude9.
03%C$4.
675b350kbbl/d2P:5.
1bbblAug.
,2009AddaxC$8.
27b143kbbl/d2P:537mbblDec.
,2008TanganyikaRMB13b184mbblNote:Someoilfieldproductionmayincreaseafteracquisitions.
Source:SinopecGroupChinaGas(00384)FinancialandValuationDataHK$00030Sept.
,2011(interim)31Mar.
2011(annual)FY11APEFY11APB30Sept.
,2011PBEquityattributabletoowners9,093,0538,764,6761.
991.
92Netprofitaftertaxation443,622781,322Profitattributabletoowners373,608625,89627.
9Source︰ChinaGas,GuotaiJunanInternationalSinopecRatiosandAssumptions200920102011F2012F2013FGrowth%:Revenue-6.
88%42.
62%21.
80%4.
89%5.
78%Operatingprofit244.
39%15.
77%0.
03%11.
36%4.
95%Netprofit121.
37%13.
70%4.
23%12.
22%5.
61%Margins:Grossmargin27.
70%22.
95%21.
18%21.
74%21.
80%Operatingmargin6.
74%5.
49%4.
53%4.
81%4.
78%Netmargin4.
98%4.
08%3.
51%3.
75%3.
75%Debtmanagement:Netgearing62.
01%48.
35%38.
46%29.
40%22.
02%Totaldebttoequity60.
15%50.
09%40.
75%32.
21%25.
22%Valuation:PE9.
678.
217.
416.
616.
26Bookvalue/share(RMB)4.
3714.
8335.
4666.
2236.
995PB1.
611.
411.
171.
030.
91P/CF3.
693.
463.
243.
092.
88Assumptions:Brentprice(US$/bbl)62.
0579.
73111.
00111.
00116.
00Realisedcrudeoilprice(US$/bbl)50.
8270.
8899.
0099.
00104.
00Source:TheCompany,GuotaiJunanInternational19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage5of8Sinopec1-3Q11OperatingProfit(RMBm)SegmentTurnoverChangeyoyOperatingprofitChangeyoyExploration&Production33,97639.
22%55,27335.
35%Refining143,07923.
66%-23,094n.
a.
Marketing999,97633.
09%31,88836.
82%Chemicals276,89136.
13%23,688128.
36%Corporateandothers395,02027.
37%-1,31712.
85%Eliminationn.
a.
n.
a.
1,023n.
a.
Total1,848,94231.
60%87,4616.
87%Source︰theCompanyDomesticRefinedOilPriceAdjustment19-Dec-0815-Jan-0925-Mar-091-Jun-0930-Jun-0929-Jul-092-Sep-0930-Sep-0910-Nov-0914-Apr-101-Jun-1026-Oct-1022-Dec-1020-Feb-117-Apr-119-Oct-11Ex-factoryGasoline5,5805,4405,7306,1306,7306,5106,8106,6207,1007,4207,1907,4207,7308,0808,5808,280Diesel4,9704,8104,9905,3905,9905,7706,0705,8806,3606,6806,4606,6806,9807,3307,7307,430RetailcapGasoline6,3976,2576,5476,9477,5517,3317,6317,4417,9218,2508,0218,2518,5618,9119,4119,111Diesel5,7945,6345,8146,2146,8186,5986,8986,7087,1897,5207,3017,5217,8218,1718,5718,271Source:theNDRCSinopecOperationalDataandPlanUnit1-3Q11Change2011newtargetchangeExplorationandProductionCrudeOilmmbbls239.
56-3.
6%321.
321.
99%Chinammbbls226.
810.
5%Africammbbls12.
75-44.
3%NaturalGasbcf382.
2522.
1%501.
0813.
5%Totaloilandgasproductionmmboe303.
270.
8%RealisedcrudeoilpriceUS$/bbl98.
2339.
2%RealisednaturalgaspriceUS$/kcf5.
4716.
1%RefiningCrudeoilthroughputKbbl/d4,3703.
6%4,4815.
4%Gasoline,dieselandkeroseneproductionmilliontonnes95.
453.
5%ofwhich:Gasolinemilliontonnes27.
592.
6%Dieselmilliontonnes57.
632.
9%Kerosenemilliontonnes10.
239.
2%Lightchemicalfeedstockmilliontonnes27.
375.
8%Lightproductsyield%76.
180.
47ptsRefiningyield%95.
200.
42ptsChemicalEthylene'000tonnes7,35611.
3%9,8508.
7%Syntheticresin'000tonnes10,0675.
6%Syntheticrubber'000tonnes7463.
8%Syntheticfibremonomerandpolymer'000tonnes7,0868.
6%Syntheticfibre'000tonnes1,0441.
4%Urea'000tonnes680-39.
7%MarketingandDistributionTotalsalesvolumeofoilproductsmilliontonnes121.
5810.
3%TotalDomesticSalesofRefinedOilProductsmilliontonnes113.
578.
8%147.
04.
60%Ofwhich:Retailvolumemilliontonnes75.
5517.
8%Directsalesvolumemilliontonnes24.
12-1.
3%Wholesalevolumemilliontonnes13.
9-11.
9%TotalnumberofservicestationsunderSINOPECbrand30,1030.
0%Ofwhich:Company-operated30,0731.
6%Franchised30-94.
2%AverageannualthroughputperpetrolstationTonne/station3,34813.
1%Source:theCompanySinopec1H11SalesVolumeandPricesSalesvolume(000tonne)ChangeyoyAveragerealisedprice(RMB/tonne,RMB/000m3)ChangeyoyCrudeoil2,386-9.
5%4,60034.
2%Naturalgas(millioncubicmeters)5,93643.
5%1,26823.
5%Gasoline23,70511.
7%8,23614.
3%Diesel48,61211.
2%6,99419.
6%Kerosene8,05325.
1%5,92827.
1%Basicchemicalfeedstock9,93720.
4%6,95925.
8%Syntheticfibremonomersandpolymer3,14114.
2%10,37027.
4%Syntheticresin5,1769.
8%10,1349.
8%Syntheticfibre7644.
9%13,99525.
3%Syntheticrubber6314.
1%22,02840.
4%Chemicalfertilizer468-48.
9%2,04924.
3%Source:theCompany19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage6of8Sinopec1-3Q11RevenueBreakdownSinopec1-3Q11OperatingProfitCorporate&Others21.
4%Chemicals15.
0%Marketing&Distribution54.
1%Refining7.
7%Exploration&Production1.
8%-30,000-20,000-10,000010,00020,00030,00040,00050,00060,000Exploration&ProductionRefiningMarketing&DistributionChemicalsCorporate&OthersRMBm20102011Source:theCompanySource:theCompanyDomesticGasoline&DieselRetailPrices203040506070809010011012013014020042005200620072008200920102011US$/bblgasolineretailpricedieselretailpricecrudeoilcostsSource:CEIC,BloombergDomesticPetrochemicals-NaphthaSpreadDomesticPetrochemicalsPrices01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000200620072008200920102011RMB/tonnePropyleneTolueneStyreneHDPE3,0008,00013,00018,00023,00028,00033,00038,00020042005200620072008200920102011RMB/tonneHDPEStyreneSBRAcrylonitrileSource:CEIC、Bloomberg、GuotaiJunanInternationalSource:CEICIncomeStatementYearendDec31(RMBm)200920102011F2012F2013FTurnover1,315,9151,876,7582,285,9802,397,6752,536,281Otheroperatingrevenues29,13736,42432,21632,59233,7441,345,0521,913,1822,318,1962,430,2682,570,025Otherincome00000Purchasedcrudeoil,productsandoperatingsuppliesandexpenses-980,564-1,482,484-1,834,061-1,909,118-2,017,235SG&A&Personnel-69,434-84,720-103,193-108,235-114,492DD&A-54,016-59,223-63,253-68,287-74,509Explorationexpenses-10,545-10,955-13,344-13,996-14,805Taxesotherthanincometax-132,884-157,189-191,465-205,252-217,597Otheroperatingexpenses,net-6,910-13,607-7,848-8,417-8,629Totaloperatingexpenses-1,254,353-1,808,178-2,213,163-2,313,305-2,447,267Operatingprofit90,699105,004105,033116,963122,758Netfinancecosts-7,466-6,974-6,552-5,342-4,597Profitbeforetaxation86,604103,693105,652119,000125,793Taxation-19,599-25,689-24,346-27,759-29,42919December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage7of8Minorityinterests-3,858-6,204-6,467-7,257-7,664ProfitattributabletoequityshareholdersoftheCompany63,14771,80074,83983,98488,700BasicEPS0.
730.
830.
860.
971.
02DilutedEPS0.
720.
820.
790.
890.
94Source:theCompany,GuotaiJunanInternational.
BalanceSheetYearendDec31(RMBm)200920102011F2012F2013FProperty,plantandequipment484,815540,700556,428602,148649,440Constructioninprogress120,37589,599119,980124,089130,446Others91,594104,62698,175106,767115,192Non-currentassets696,784734,925774,583833,005895,077Cashandcashequivalents8,78217,00821,40224,84226,797Inventories141,727156,546190,680199,997211,559Billsreceivable28,70259,04371,91775,43179,792Others22,26827,63233,46735,10337,123Currentassets201,479260,229317,467335,374355,270Short-termdebts59,35017,01915,62411,5928,400Billspayable119,873136,346166,076174,191184,260Accruedexpensesandotherpayables117,798153,478186,943196,078207,413Others18,90029,56328,09228,82728,459Currentliabilities315,921336,406396,735410,688428,532Netcurrentliabilities-114,442-76,177-79,268-75,314-73,263Totalassetslesscurrentliabilities582,342658,748695,315757,691821,815Long-termdebts152,725174,075160,149144,134126,838Others24,80134,30523,43429,00535,813Non-currentliabilities177,526208,380183,583173,139162,651404,816450,368511,732584,552659,164EquitySharecapital86,70286,70286,70386,70386,703Reserves292,238332,345387,242452,805519,752378,940419,047473,945539,508606,455Minorityinterests25,87631,32137,78845,04452,709Totalequity404,816450,368511,732584,552659,164Source:theCompany,GuotaiJunanInternational.
CashFlowStatementYearendDec31(RMBm)200920102011F2012F2013FPBT86,604103,693105,652119,000125,793DD&A54,01659,22363,25368,28774,509Netinterest7,3327,3127,2215,6604,847Changeinworkingcapital14,5021,1748,6191,1411,689Others9,10413,08910,91613,25414,841Cashgeneratedfromoperations171,558184,491195,661207,342221,680Incometaxpaid-6,045-14,158-24,330-27,644-28,696Netcashgeneratedfromoperatingactivities165,513170,333171,331179,698192,985InvestingactivitiesCapitalexpenditure-107,487-106,371-124,100-134,028-144,750Interestincome2776601,0841,1871,349Others-10,145-772,7432,8963,031Netcashusedininvestingactivities-117,355-105,788-120,273-129,945-140,371FinancingactivitiesLoanschange-23,471-19,311-16,792-19,311-20,856Dividendpaid-13,559-16,391-19,942-18,421-21,753Interestpaid-7,762-6,739-9,929-8,581-8,050Others-1,619-13,853000Netcash(usedin)/generatedfromfinancingactivities-46,411-56,294-46,663-46,314-50,659Netincrease/(decrease)incashandcashequivalents1,7478,2514,3943,4391,955Cashandcashequivalentsat1January7,0408,78217,00821,40224,842Cashandcashequivalentsat31December8,78217,00821,40224,84226,797Source:theCompany,GuotaiJunanInternational.
19December2011Sinopec中国石化(00386HK)CompanyReportSeethelastpagefordisclaimerPage8of8CompanyRatingDefinitionTheBenchmark:HongKongHangSengIndexTimeHorizon:6to18monthsRatingDefinitionBuyRelativePerformance>15%;orthefundamentaloutlookofthecompanyorsectorisfavorable.
AccumulateRelativePerformanceis5%to15%;orthefundamentaloutlookofthecompanyorsectorisfavorable.
NeutralRelativePerformanceis-5%to5%;orthefundamentaloutlookofthecompanyorsectorisneutral.
ReduceRelativePerformanceis-5%to-15%;orthefundamentaloutlookofthecompanyorsectorisunfavorable.
SellRelativePerformance5%;orthefundamentaloutlookofthesectorisfavorable.
NeutralRelativePerformanceis-5%to5%;orthefundamentaloutlookofthesectorisneutral.
UnderperformRelativePerformance<-5%;orthefundamentaloutlookofthesectorisunfavorable.
DISCLOSUREOFINTERESTS(1)TheAnalystsandtheirassociatesdonotserveasanofficeroftheissuermentionedinthisResearchReport.
(2)TheAnalystsandtheirassociatesdonothaveanyfinancialinterestsinrelationtotheissuermentionedinthisResearchReport.
(3)ExceptforShandongChenming(01812),GuotaiJunananditsgroupcompaniesdonotholdequaltoormorethan1%ofthemarketcapitalizationoftheissuermentionedinthisResearchReport.
(4)GuotaiJunananditsgroupcompanieshavenothadinvestmentbankingrelationshipswiththeissuermentionedinthisResearchReportwithinthepreceding12months.
DISCLAIMERThisResearchReportdoesnotconstituteaninvitationoroffertoacquire,purchaseorsubscribeforsecuritiesbyGuotaiJunanSecurities(HongKong)Limited("GuotaiJunan").
GuotaiJunananditsgroupcompaniesmaydobusinessthatrelatestocompaniescoveredinresearchreports,includinginvestmentbanking,investmentservicesandetc.
(forexample,theplacingagent,leadmanager,sponsor,underwriterorinvestproprietarily).
Anyopinionsexpressedinthisreportmaydifferorbecontrarytoopinionsorinvestmentstrategiesexpressedorallyorinwrittenformbysalespersons,dealersandotherprofessionalexecutivesofGuotaiJunangroupofcompanies.
AnyopinionsexpressedinthisreportmaydifferorbecontrarytoopinionsorinvestmentdecisionsmadebytheassetmanagementandinvestmentbankinggroupsofGuotaiJunan.
ThoughbestefforthasbeenmadetoensuretheaccuracyoftheinformationanddatacontainedinthisResearchReport,GuotaiJunandoesnotguaranteetheaccuracyandcompletenessoftheinformationanddataherein.
ThisResearchReportmaycontainsomeforward-lookingestimatesandforecastsderivedfromtheassumptionsofthefuturepoliticalandeconomicconditionswithinherentlyunpredictableandmutablesituation,souncertaintymaycontain.
Investorsshouldunderstandandcomprehendtheinvestmentobjectivesanditsrelatedrisks,andwherenecessaryconsulttheirownfinancialadviserspriortoanyinvestmentdecision.
ThisResearchReportisnotdirectedat,orintendedfordistributiontooruseby,anypersonorentitywhoisacitizenorresidentoforlocatedinanyjurisdictionwheresuchdistribution,publication,availabilityorusewouldbecontrarytoapplicablelaworregulationorwhichwouldsubjectGuotaiJunananditsgroupcompaniestoanyregistrationorlicensingrequirementwithinsuchjurisdiction.
2011GuotaiJunanSecurities(HongKong)Limited.
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