桑拿

Sinopec (600028): Significant improvement in upstream operations in line with expectations

Sinopec (600028): Significant improvement in upstream operations in line with expectations

The company’s net profit attributable to its mother in 19Q1 continued to decline by 21.

4%.

According to Chinese accounting standards, the company achieved operating income of 7175 in the first quarter of 2019.

7.9 billion, an increase of 15 in ten years.

5%; net profit attributable to mother 147.

63 ppm, a decrease of 21 per year.

4%, in line with our expectations.

The company’s performance gradually decreased because of the decline in oil prices and the narrowing of the spread of chemical products.

42 total to 16.

89%; due to the impact of the new leasing policy, the company’s financial expenses increased by 412 every year.

1% to 23.

3 billion, at the same time, the decline in investment income from associates and joint ventures and other factors led to a decline in investment income fell 61.

7% to 12.

85 billion.

The upstream exploration and development segment realized a turnaround.

The average price of Brent crude in the first quarter of 2019 was 63.

$ 83 / barrel (YoY-5.

1%), the company’s crude oil price 57.

$ 66 / barrel (YoY-3.

6%), natural gas price 7.

$ 7 / thousand cubic feet (YoY + 12.

6%); the company’s first quarter oil and gas equivalent output 113.

46 million barrels, an annual increase of 1.

9%.

Among them territorial crude oil production increased by 0.

2%, natural gas production increases by 6 per year.

At the same time, thanks to the company’s control of upstream costs, the exploration and development sector as a whole realized a reversal of losses and profits, with operating income of 21.

43 ppm, an increase of 24 in ten years.

6.1 billion.

Downstream refinery production and sales operations for ten years.

Refining segment: The company’s crude oil processing volume increased by 2 in the first quarter.

7%, the output of refined oil is increasing by 3 per year.

8%, but the refining spread has narrowed, and we estimate that the single barrel refining EBIT shifts up and down by 2.

$ 86 / barrel to 3.

At $ 9 / barrel, the refining segment realized operating income of 119.

63 ppm, with a 70-year average of 70.

4.4 billion; marketing and distribution board: the total sales of refined oil products through 4,974 channels, gradually increased by 5.

4%, but due to the extensive 淡水桑拿网 competition in the first quarter, which affected the zero spread of refined oil products, the segment achieved operating income of 78.66 ppm, 10-year average of 10.

5.9 billion; chemical sector, the company’s total operating volume of chemical products 2,337.

3In the initial period, the annual growth rate is 14.

3%, but because the price of naphtha cracked ethylene in the first quarter was 94 US dollars / ton, continuously shifted 91 US dollars / ton, the operating income of the chemical sector gradually decreased14.

9.9 billion to 69.

5.3 billion.

Capital expenditure increased significantly, and cash on account was abundant.

The company’s planned capital expenditure for 2019 is RMB 1,363 trillion (+15 compared with the same period last year).

5%), the company’s 19Q1 capital expenditure increased significantly 天津夜网 to 119.

1.4 billion (+114 compared to the same period last year).

2%), of which the capital expenditure in the exploration and development sector was 55.

6.2 billion (+248 year-on-year.

3%), the cash at the end of the first quarter of 1983.

900 million, an increase of 13 over the beginning of the year.

700 million, cash is expected to maintain a high dividend payout ratio.

Investment suggestion: After 19Q2, Brent oil price has stood at US $ 70, and upstream operations will be further improved. The profitability of downstream refining and chemical recovery will be restored to improve performance and cash.
The 21-year EPS forecast is 0.

55 yuan and 0.

59 yuan and 0.

63 yuan, corresponding to PE is 10 times, 10 times and 9 times, the current PB is 0.

9 times, far lower than the industry average of more than 2 times, maintaining the “buy” level.

Risk Warning: Oil prices have fallen sharply, the prosperity of chemical products has further expanded, and competition in the refined oil market has become more intense.