Back to top

Analyst Blog

China Petroleum and Chemical Corporation (SNP - Analyst Report), also known as Sinopec, reported third quarter 2013 net income of 22.02 billion yuan (US$3.59 billion), up approximately 61.7% sequentially. Higher retail fuel prices contributed largely to the improvement.

Revenues in the third quarter improved 7.1% to 724.7 billion yuan (US$117.8 billion) from 676.7 billion yuan (US$110.0 billion) in the prior-year quarter.

Operational Performance

During the first nine-month period ending Sep 30, 2013, Sinopec’s crude oil production grew 1.9% year over year to 249.7 million barrels, while natural gas volumes expanded 10.9% year over year to 486.3 billion cubic feet. Domestic crude oil production increased 1.4% year over year to 232.2 million barrels, while overseas volumes increased 9.3% year over year to 17.5 million barrels.

Total oil and gas production grew 4.0% year over year to 330.8 million barrels of oil equivalent.

A sharp decline in crude oil prices resulted in a 15.5% fall in the Exploration and Production (E&P) segment’s operating profit from the prior-year quarter. The figure came in at 46.7 billion yuan (US$7.6 billion).

The company’s Refining business recorded refinery throughput of 174.2 million tons (up 6.4% year over year). Refining margins significantly improved to $5.49/barrel, up 149.5% year over year.

The Marketing and Distribution segment sold 134.6 million tons of refined oil products, reflecting a 4.9% year-over-year increase.

The output of ethylene from the Chemicals segment was 7.398 million tons, up 5.3% from the year-ago level.

Capital Expenditure

Capital expenditures for the first nine months of 2013 totaled 86.95 billion yuan.

Capital expenditure for the E&P segment was RMB 41.25 billion, mainly used for development in tight oil development in south Ordos, heavy oil development in west Shengli at shallow stratus, new blocks in the Tahe Oilfield, Yuanba and the Daniudi gas fields, and the Shandong LNG project.

Capital expenditure for the Refining Segment was RMB 12.71 billion, used mainly for upgrading oil product quality and revamping projects in Wuhan, Anqing and Maoming.

In the Chemicals segment, RMB12.76 billion was used for the construction of the Wuhan 800,000-tpa ethylene project, the Hubei syngas-to-MEG project and the Hainan aromatics project.

Capital expenditure for the Marketing and Distribution segment was RMB 17.36 billion, used mainly for developing and revamping service stations (including gas stations), the construction of refined oil product pipelines and depots, and for insuring safety and improving the environment.

The company added 671 new service stations (including gas stations) over the first three quarters of 2013. A total of RMB 2.86 billion was used for Corporate and Other purposes, such as construction of R&D facilities and IT projects.

Zacks Rank

Sinopec currently has a Zacks Rank #4 (Sell). However, there are other Zacks Ranked #1 (Strong Buy) stocks in the oil and gas sector – TransAtlantic Petroleum Ltd. (TAT - Snapshot Report), Exterran Partners, L.P. (EXLP - Snapshot Report) and Matador Resources Company (MTDR - Snapshot Report) – that appear rewarding in the short term.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.05 +6.37%
CENTURY ALU… CENX 26.52 +6.16%
TESLA MOTOR… TSLA 281.47 +4.36%
BAIDU ADS BIDU 222.70 +3.81%
RTI SURGICA… RTIX 5.50 +3.58%