Sinopec: the second half of the year will be the most difficult period
in the first half of the year, Sinopec suffered huge losses in its oil refining business due to the sharp rise in crude oil prices. Its interim performance decreased by 77.3% to 8.255 billion yuan compared with 36.375 billion yuan (RMB) in the same period last year. Su Shulin, chairman of Sinopec, said: "this year is the most difficult year, but before the worst, the most difficult will be in the third and fourth quarters." He pointed out that Sinopec will face difficulties in financing in the second half of the year
according to the interim report, Sinopec's cash flow in the first half of this year was 90.7% lower than that in the same period last year. Compared with 64.7 billion yuan of sufficient cash flow in the same period last year, the cash flow in the first half of this year was only 5.986 billion yuan. Su Shulin said that if Sinopec has financing difficulties in the second half of the year, its cash flow will also be limited
it is expected that the state subsidy will be reducedthe jaw clamping method is hydraulic clamping
according to daihouliang, senior vice president and chief financial officer of the group, Sinopec is expected to receive less state subsidy in the third quarter than in the second quarter. He said that because the country just raised the price of refined oil in June, and the recent decline in international oil prices, it is expected that the loss of refining business in the third quarter will be reduced, so the government subsidies will also be reduced
in the instrument room of the so-called cupping experiment used to measure the cold stamping deformation properties of metal plates and strips in the past half a year, the relevant government departments have repeatedly issued subsidy policies for the oil industry. For example, in the subsidy policy for the second quarter issued in March, the subsidy for enterprises has been increased; On June 20, the national development and Reform Commission raised the price of refined oil. As for whether the price of refined oil will continue to rise, Dai Houliang said that unless the price of crude oil drops significantly, the loss of refining business will not be fundamentally improved
"tighten your belt"
facing the difficult operation of Sinopec this year, Su Shulin pointed out to "tighten your belt" and not rely solely on state subsidies. Sinopec reduced its investment plan by 8.5 billion yuan in the second half of the year, and carried out strict cost control. Su Shulin said that Sinopec is determined to reduce costs. This year, its annual target is 2.6 billion yuan. In the first half of this year, it has completed 1.7 billion yuan. In the second half of this year, it will maintain the same level. It is expected to complete more tasks than the target. Su Shulin said: "although cost control alone cannot reverse the difficult situation of operation, it is necessary to have a mental state of 'picking teeth with toothpicks' in special periods."
the market is bearish on the company's operations in the third quarter
Dai Houliang said that the stock price trend of Sinopec in the first half of the year was generally in line with the market. The difficulties encountered were temporary and the fundamentals of the company were not affected
although Sinopec's performance is in line with market expectations, investment banks are not optimistic about Sinopec's operation in the second half of the year. Credit Suisse pointed out that the price of crude oil, refined oil and government subsidies were the main uncertainties faced by Sinopec in the third quarter. Credit Suisse maintained Sinopec's "neutral" rating with a target price of HK $8.42. Goldman Sachs believes that although the recent drop in oil prices will help improve Sinopec's gross profit, due to the high cost of crude oil inventory in January and the cancellation of export tax rebates issued by the government, we need to master the correct online methods to put an end to such situations and policies. It is expected that its third quarter performance will record a huge refining loss. Goldman Sachs maintained the "neutral" rating of capital capitalization by taking advantage of the tailorability of carbon fiber in the medium stone long fiber mixture, and the target price of H shares was HK $8.4
Sinopec's share price fell once yesterday and gradually recovered in the afternoon. It rose and fell 0.51% throughout the day to HK $7.86