China Petroleum & Chemical Corp (SNPMF)

Price$0.6100Cached quoteAs of 2026-09-06 08:36 UTC

AI: Fair-priced

Price checkThe shares look reasonably priced, but not cheap enough to ignore the business cycle.

The observed market price implies roughly low-to-mid-teens times recent earnings, depending on whether investors use depressed 2025 profit or the stronger first half of 2026. That is not an extreme valuation for a large integrated energy company, but Sinopec's profits and cash generation have swung sharply before. The supplied history shows earnings per share ranging from CNY 0.28 to CNY 0.59 during 2020-2022. At this valuation, buyers are assuming current profit recovery partly holds without requiring unusually strong refining conditions.

Big pictureSinopec earns real money across cycles, but cash left after investment is much less dependable.

The supplied SEC-derived history shows net income between CNY 33.4 billion and CNY 72.0 billion from 2020 through 2022, proving the company can remain profitable through difficult conditions. Cash was less steady. Operating cash flow was CNY 116.3 billion in 2022 while capital spending reached CNY 153.7 billion, leaving negative free cash flow, meaning cash left after running and investing in the business. In 2021 that measure was strongly positive. This volatility makes a permanently high valuation difficult to justify.

Business strengthScale, integration, and a solid equity base provide resilience, though debt and working capital need watching.

At the end of 2022, the supplied history shows CNY 93.4 billion of cash against CNY 144.7 billion of debt, or about CNY 51.3 billion of net debt. Stockholders' equity was CNY 784.7 billion, so leverage was manageable relative to the asset base. However, current liabilities exceeded current assets by roughly CNY 144 billion. Capital allocation has historically favored dividends: CNY 56.9 billion was paid in 2022, while buybacks were only CNY 4.2 billion. Recent repurchases improve the picture but remain modest relative to total shares.

What could change the storySustained refining gains could create upside, while weaker fuel demand or costly crude would pressure value.

The strongest bull case is that better crude sourcing and product mix keep refining profitability above recent depressed levels. First-half 2026 refining margins rose 44.1%, helping net profit increase 19.3%. The bear case is structural: Sinopec expects Chinese oil consumption to fall about 8% in 2026, while petrochemical oversupply remains severe. The current valuation therefore needs neither a boom nor a collapse. Repeated annual free cash flow, stable debt, and shrinking share count would strengthen the thesis; renewed chemical losses and weaker refining margins would weaken it.

AI: News

First-half profit reboundProfit rose despite difficult markets, showing that better refining economics partly offset weaker demand.

On August 23, Sinopec reported first-half 2026 net profit of CNY 25.63 billion, up 19.3% from a year earlier. Refinery throughput fell 5.6%, yet the refining margin improved 44.1% and segment operating profit rose sharply. Chemicals still lost more than CNY 200 million, though the loss narrowed substantially. Investors should care because the result shows operational improvements can lift earnings even without volume growth, but it does not prove those margins are permanent.

Crude supply reshuffleSinopec shifted crude sourcing as Middle East disruption threatened refinery supply and input costs.

During July through September, Sinopec arranged roughly 30 to 40 Russian Far East crude cargoes, equivalent to about 241,000-320,000 barrels per day. Reuters reported that Saudi volumes fell sharply while Russian barrels carried meaningful discounts versus alternatives. The move matters because crude is Sinopec's largest refinery input: cheaper and more reliable supply can protect margins. However, geopolitical and sanctions exposure also rises, so the financial benefit depends on continued legal access and stable logistics.

Share repurchases continueManagement is retiring shares, giving investors a modest additional return beyond dividends.

Sinopec began its latest A-share repurchase in June. By July 31 it had bought about 87.3 million A shares for CNY 413.8 million, equal to roughly 0.07% of total shares, under a planned CNY 500 million to CNY 1 billion program. The purchased shares are intended for cancellation. This is positive capital allocation because each remaining share owns slightly more of the company, although the scale is too small by itself to materially transform per-share value.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	¥2.78T	¥3.07T	¥3.21T	¥3.32T	¥2.74T	¥2.10T	¥2.96T	¥2.88T	¥2.36T	¥1.93T	¥2.02T
Research & development	—	—	—	¥12.77B	¥11.48B	¥10.09B	¥9.45B	¥8.00B	¥6.42B	¥5.94B	¥5.65B
Operating expenses	¥416.07B	¥433.42B	¥441.21B	¥3.24T	¥2.65T	¥2.09T	¥2.87T	¥2.80T	¥2.29T	¥1.85T	¥1.96T
Operating income	¥52.51B	¥69.36B	¥86.49B	¥75.83B	¥94.63B	¥13.67B	¥86.52B	¥82.56B	¥71.47B	¥77.19B	¥56.82B
Operating margin	1.89%	2.26%	2.69%	2.29%	3.45%	0.65%	2.92%	2.86%	3.03%	4.00%	2.81%
EBITDA	¥189.33B	¥207.68B	¥100.90B	¥185.74B	¥210.31B	¥121.13B	¥196.16B	¥192.91B	¥186.78B	¥185.62B	¥153.28B
EBITDA margin	6.81%	6.76%	3.14%	5.60%	7.67%	5.76%	6.63%	6.69%	7.91%	9.61%	7.59%
Net income	¥32.48B	¥48.94B	¥58.31B	¥75.64B	¥85.85B	¥42.27B	¥72.11B	¥79.06B	¥70.42B	¥59.44B	¥43.80B
Net profit margin	1.17%	1.59%	1.82%	2.28%	3.13%	2.01%	2.44%	2.74%	2.98%	3.08%	2.17%
Basic EPSper basic share	CN¥0.27	CN¥0.40	CN¥0.49	CN¥0.55	CN¥0.59	CN¥0.28	CN¥0.48	CN¥0.51	CN¥0.42	CN¥0.39	CN¥0.27
Diluted EPSper diluted share	CN¥0.27	CN¥0.40	CN¥0.49	CN¥0.55	CN¥0.59	CN¥0.28	CN¥0.48	CN¥0.51	CN¥0.42	CN¥0.39	CN¥0.27