Rising oil prices helped Sinopec earn 170 million yuan a day last year

On March 24, Sinopec released its financial statements and audit report for 2018. According to the report, in 2018, the company's operating revenue reached 2.89 trillion yuan, an increase of 22.5% year-on-year; the net profit attributable to shareholders of the parent company was 63.389 billion yuan, an increase of 23.4% year-on-year. In 2018, Sinopec made a net profit of 173 million yuan per day. Sinopec attributed the growth of its performance to the year-on-year increase in the prices of its main products, as well as the full play of its marketing network advantages, and the full expansion of its market, so as to achieve the year-on-year growth in the sales of its main products. On the whole, the downstream sectors such as sales (crude oil, natural gas), oil refining and chemical industry are the main profit sources of Sinopec. The upstream exploration and development is still in deficit, but it has improved significantly compared with previous years. In 2018, international crude oil prices rose in the first three quarters and fell sharply in the fourth quarter. The spot price of Platts Brent crude oil for the whole year averaged US $71.03/barrel, up 31.1% year on year.

With the adjustment of the national energy structure, the domestic natural gas demand is strong. According to statistics, the apparent consumption of natural gas in the whole territory reaches 280.3 billion cubic meters, an increase of 181% year on year. From the perspective of revenue composition, Sinopec's largest revenue source is the revenue from the external sales of petroleum products (mainly including refined oil and other refined petroleum products) by the refining business unit and the marketing and distribution business unit, which is RMB 1557.9 billion, accounting for 53.9% of the total revenue, with a year-on-year growth of 17.6%. The increase was due to higher prices of refined oil and other products. The second place in the ranking is that the external sales revenue from chemical products is 457.4 billion yuan, accounting for 15.8% of the total revenue, an increase of 22.4% year on year. The main reason for the growth is that the company closely links production and marketing, strives to improve market share and expand trade scale, so as to promote the year-on-year growth of sales volume and price of chemical products. However, the third largest business segment, the export of crude oil, natural gas and other upstream products, has a turnover of 93.5 billion yuan, up 35.2% year on year.

The main reason is that the company seized the favorable opportunity brought by the rising price of crude oil and natural gas products. With the increase of revenue, Sinopec's operating expenses also increased, reaching 2808.9 billion yuan in the whole year, up 22.7% year-on-year. Eighty percent of the expenditure was spent on purchasing crude oil, products, operating supplies and expenses, reaching 2293 billion yuan, an increase of 29.5% year on year. In addition, in Sinopec's overall profit sector, the gross profit rate * of exploration and development is high, 11.6%, with a positive increase of 15.1% compared with the previous year. Other sectors, including oil refining, marketing and distribution, and chemical industry, have seen a decline in gross margin ratio. In 2018, Sinopec has made new discoveries in oil and gas exploration in Tarim Basin, yine basin, Sichuan Basin and other areas. The economic recoverable reserves of oil and gas increased by 458.2 million barrels of oil equivalent in the whole year, and the replacement rate of crude oil reserves reached 131.7%. This next step shows that exploration and development have increased in a large area in 2018. The decline of crude oil price in the fourth quarter had a great impact on Sinopec's stock price.

In the first three quarters, Sinopec's share price reached 7.45 yuan / share, then fell all the way, with a low of 4.96 yuan / share in 2019. On December 27, Chen Bo, former general manager of Sinopec, and Zhan Qi, Secretary of the Party committee, were suspended for work reasons. Within four hours after the announcement, the company's market value evaporated by about 76.3 billion yuan. After closing on March 22, Sinopec's share price was 5.98 yuan / share, with a total market value of 724 billion yuan. In the financial report, Sinopec also mentioned its outlook for 2019. It is planned to produce 28.8 million barrels of crude oil, 246 million tons of processed crude oil, 157 million tons of refined oil, 182 million tons of domestic refined oil and 12.12 million tons of ethylene. In terms of capital expenditure, Sinopec is expected to spend 136.3 billion yuan in 2019, of which 43.7% is in exploration and development, reaching 59.6 billion yuan. March 13: Ma Yongsheng, President of Sinopec, said that after five years, the mixed reform of its sales companies has been basically completed, and the next step is to choose the opportunity for IPO. This means Sinopec will add another listed company.