1031 GMT - Sinopec's downstream segment will likely face slower recovery, Morningstar's Chokwai Lee writes in a note. The Chinese oil refiner's 3Q earnings were disappointing and raised worries about its timeline for recovery in the downstream segment, Lee says. The refining, marketing and chemicals units all registered sequentially softer results, Lee notes. Inventory losses should ease in 4Q, barring sharp falls in oil prices, he says. The company's H shares remain attractive, given 2024 dividend yield of over 7% and its continuing share buybacks, but investors may prefer upstream-focused peers like Cnooc and PetroChina instead, Lee adds. Taking into account the latest energy prices and operating assumptions, Morningstar trims earnings estimates for Sinopec through 2026 by an average of 5%, cutting its fair-value estimate by 5% to HK$5.80. Shares closed at HK$4.36. (kimberley.kao@wsj.com)
(END) Dow Jones Newswires
October 30, 2024 06:31 ET (10:31 GMT)
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