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<Research>Citi: Sinopec Group's Restructuring with CNAF Group Benefits SINOPEC CORP (00386.HK)'s Refining & Sales Biz
Recommend 8 Positive 18 Negative 11 |
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SINOPEC CORP (00386.HK)'s parent company, Sinopec Group, announced a restructuring with China National Aviation Fuel (CNAF) Group, Citi Research issued a research report saying. This move is expected to enhance SINOPEC CORP's development in aviation fuel and sustainable aviation fuel, benefiting its refining and sales business, and mitigating the impact of the structural decline in demand for gasoline and diesel in China. Considering the resilient long-term demand growth for aviation fuel, the broker will focus on the potential synergies between SINOPEC CORP's aviation fuel business and CNAF Group in the future, the report noted. It is currently unclear whether Sinopec Group will absorb CNAF Group's assets or establish a new entity, nor is there an urgent need for restructuring or asset injection at the listed company level. Therefore, Citi Research set its target price at $5.2, with rating at Buy. The broker's current top pick in China's oil and gas sector remains PETROCHINA (00857.HK), as it was optimistic about PETROCHINA's ability to maintain stronger dividend capacity in a low oil price environment. AASTOCKS Financial News Website: www.aastocks.com |
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