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SINOPEC Engineering (Group) Co., Ltd. Class H (HK:2386)
:2386

SINOPEC Engineering (Group) Co., Ltd. Class H (2386) AI Stock Analysis

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HK

SINOPEC Engineering (Group) Co., Ltd. Class H

(Frankfurt:2386)

Rating:71Outperform
Price Target:
HK$6.50
▲(9.24%Upside)
SINOPEC Engineering's stable financial performance and attractive valuation are key strengths, with a strong balance sheet and low leverage. However, modest profitability and recent negative cash flow present challenges. The technical analysis suggests bullish momentum, but caution is advised due to overbought indicators. The lack of recent earnings call data means the stock score is based primarily on financials and technicals.

SINOPEC Engineering (Group) Co., Ltd. Class H (2386) vs. iShares MSCI Hong Kong ETF (EWH)

SINOPEC Engineering (Group) Co., Ltd. Class H Business Overview & Revenue Model

Company DescriptionSINOPEC Engineering (Group) Co., Ltd. Class H (2386) is a leading engineering company based in China, primarily engaged in the provision of engineering, procurement, construction, and project management services. The company operates across various sectors, including oil refining, petrochemicals, and new coal chemical engineering industries. It offers a comprehensive range of services covering the entire lifecycle of projects, from feasibility studies and design to procurement, construction, and commissioning.
How the Company Makes MoneySINOPEC Engineering (Group) Co., Ltd. generates revenue primarily through its engineering, procurement, and construction (EPC) contracts. The company secures contracts from a diverse range of clients, predominantly in the oil refining, petrochemical, and chemical industries, to provide integrated engineering solutions. These contracts typically involve long-term agreements, with payments received at various stages of project completion. Additionally, the company benefits from strategic partnerships and collaborations with other industry players, enhancing its ability to deliver large-scale projects. The company's earnings are further supported by its strong presence in the Chinese market, where it leverages its expertise and established relationships to secure a steady pipeline of projects.

SINOPEC Engineering (Group) Co., Ltd. Class H Financial Statement Overview

Summary
SINOPEC Engineering demonstrates robust financial health with a strong balance sheet characterized by low debt levels and substantial equity. Revenue growth is consistent, contributing to a stable income statement, though margins indicate room for improvement in profitability. Cash flow presents some concerns due to recent negative free cash flow, highlighting the need for careful management of operational and capital expenses. Overall, the company is on a stable trajectory with potential for enhancing profitability and cash flow stability.
Income Statement
75
Positive
The company shows a stable revenue growth with a notable increase from 2023 to 2024. Gross profit margin is moderately healthy, hovering around 8-9%. However, the Net Profit Margin has remained stable at around 3-4%, indicating controlled expenses but limited profitability improvements. EBIT and EBITDA margins suggest operational efficiency but are not exceptionally high for the industry.
Balance Sheet
80
Positive
The company maintains a strong equity position with a Debt-to-Equity Ratio consistently below 0.1, indicating low leverage and financial stability. Return on Equity (ROE) is modest, reflecting steady but unspectacular returns on shareholder investment. The Equity Ratio is healthy, showcasing a solid balance sheet with a strong equity base compared to total assets.
Cash Flow
60
Neutral
The cash flow position shows some volatility, particularly with negative free cash flow in 2024 due to significant capital expenditures and negative operating cash flow. The Free Cash Flow to Net Income ratio has dropped, indicating challenges in converting income to cash. However, the company has maintained positive cash flow in previous years, suggesting potential for recovery.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue64.20B56.22B53.03B57.76B52.35B
Gross Profit5.34B5.61B5.61B6.47B5.71B
EBITDA3.98B3.79B2.21B2.32B2.68B
Net Income2.47B2.34B2.29B2.13B2.38B
Balance Sheet
Total Assets81.51B80.97B78.68B72.92B71.47B
Cash, Cash Equivalents and Short-Term Investments21.40B24.88B24.03B18.67B16.72B
Total Debt572.33M254.89M271.04M225.49M327.07M
Total Liabilities49.93B50.12B48.64B43.79B43.21B
Stockholders Equity31.51B30.84B30.03B29.12B28.25B
Cash Flow
Free Cash Flow-2.56B2.12B6.10B2.29B2.55B
Operating Cash Flow-2.21B2.52B6.81B2.94B2.96B
Investing Cash Flow2.53B-2.66B-905.08M503.38M-2.95B
Financing Cash Flow-1.70B-1.62B-1.53B-1.39B-1.26B

SINOPEC Engineering (Group) Co., Ltd. Class H Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price5.95
Price Trends
50DMA
5.71
Positive
100DMA
5.60
Positive
200DMA
5.62
Positive
Market Momentum
MACD
0.09
Positive
RSI
56.26
Neutral
STOCH
30.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2386, the sentiment is Neutral. The current price of 5.95 is below the 20-day moving average (MA) of 6.03, above the 50-day MA of 5.71, and above the 200-day MA of 5.62, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 56.26 is Neutral, neither overbought nor oversold. The STOCH value of 30.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:2386.

SINOPEC Engineering (Group) Co., Ltd. Class H Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
€63.48B5.515.56%4.79%-19.10%-30.15%
79
Outperform
$61.70B6.2914.62%4.88%1.21%2.15%
77
Outperform
€64.84B4.898.19%5.49%4.81%1.42%
73
Outperform
$144.26B3.278.83%5.98%-9.80%-18.36%
71
Outperform
€26.45B9.907.81%6.44%12.37%
58
Neutral
HK$13.89B4.44-3.01%7.32%3.67%-54.16%
53
Neutral
€13.82B33.237.03%2.57%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:2386
SINOPEC Engineering (Group) Co., Ltd. Class H
5.95
1.18
24.63%
HK:1618
Metallurgical Corporation of China Ltd. Class H
1.66
0.11
7.37%
HK:3311
China State Construction International Holdings
11.48
1.04
9.93%
HK:0390
China Railway Group
3.86
-0.13
-3.26%
HK:3996
China Energy Engineering Corp. Ltd. Class H
1.09
0.29
36.76%
HK:2068
China Aluminum International Engineering Corporation Limited Class H
2.21
0.53
31.55%

SINOPEC Engineering (Group) Co., Ltd. Class H Corporate Events

SINOPEC Engineering Announces Board Composition and Roles
May 9, 2025

SINOPEC Engineering (Group) Co., Ltd. has announced the composition of its board of directors, highlighting the roles and functions of each member. This announcement provides clarity on the leadership structure, which could impact the company’s strategic direction and governance, potentially influencing stakeholder confidence and the company’s market positioning.

SINOPEC Engineering Holds Successful 2024 AGM and Shareholder Meetings
May 9, 2025

SINOPEC Engineering (Group) Co., Ltd. recently held its annual general meeting for 2024, along with class meetings for domestic and H shareholders. The meetings, chaired by Mr. Jiang Dejun, saw significant shareholder participation, with compliance to legal and procedural requirements, indicating strong governance and stakeholder engagement.

SINOPEC Engineering Announces Final Dividend for 2024
May 9, 2025

SINOPEC Engineering (Group) Co., Ltd. has announced a final cash dividend of RMB 0.208 per share for the financial year ending December 31, 2024, which will be paid in Hong Kong dollars at a rate of HKD 0.224 per share. This announcement updates previous information regarding the currency, amount, exchange rate, and withholding tax details, impacting shareholders and investors, especially those involved in cross-border stock connect programs.

SINOPEC Engineering Reports Strong Q1 2025 Contract Growth
Apr 15, 2025

SINOPEC Engineering (Group) Co., Ltd. announced a significant increase in new contract values and backlog for the first quarter of 2025. The company secured new contracts worth RMB44.373 billion, marking a 31.4% increase from the previous year, and reported a backlog of RMB201.19 billion, a 16.5% rise from the end of 2024. Notable contracts include projects with Sinopec Maoming Petrochemical Company and Sonatrach in Algeria, indicating strong growth and expansion in the petrochemical sector. This development underscores the company’s robust market positioning and potential for sustained growth, benefiting stakeholders and enhancing its competitive edge in the industry.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 14, 2025