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

• Market Cap: HK$29.57B
• Dividend Yield: 5.94%
• Average Volume (3M): 8.22M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.28
• Revenue Growth: 11.89%
• EPS Growth: N/A
• Country: HK
• Employees: 15,935
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.35
• Shares Outstanding: 1,426,824,000
• 10 Day Avg. Volume: 3,924,466
• 30 Day Avg. Volume: 8,217,246
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$7.94
• Price Target Upside: 17.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 79 Outperform
• Price Target: HK$7.50 ▲(11.44% Upside)

The overall stock score is primarily driven by strong technical analysis indicators and a solid valuation, suggesting the stock is currently undervalued with strong market momentum. Financial performance is stable but highlights the need for improved profitability and cash flow management. The absence of earnings call data and corporate events did not impact the score.

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

Company Description

SINOPEC Engineering (Group) Co., Ltd., together with its subsidiaries, provides engineering, procurement, and construction (EPC) contracting services in the People's Republic of China, the Kingdom of Saudi Arabia, Kuwait, Russia, Malaysia, and internationally. It operates through four segments: Engineering, Consulting and Licensing; EPC Contracting; Construction; and Equipment manufacturing. The Engineering, Consulting and Licensing segment offers design, consulting, research and development, feasibility studies, and compliance certification services. The EPC Contracting segment provides integrated engineering, procurement, construction, maintenance, and project management services. The Construction segment offers infrastructure for oil refining and chemical industries, oil and gas storage, pipelines transportation, construction, renovation, expansion, repair and maintenance services, and large equipment lifting, as well as transportation services in construction projects. The Equipment Manufacturing segment designs, develops, manufactures, and sells equipment and spare parts for oil refining and chemical facilities. The company also provides technical, and equipment selling and leasing services, as well as medicine, pesticide, and chemical research services. The company serves petrol refining, chemical engineering, aromatics, coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation facilities, environmental protection, energy saving, and other industry sectors. The company is headquartered in Beijing, China. SINOPEC Engineering (Group) Co., Ltd. is a subsidiary of China Petrochemical Corporation.

How the Company Makes Money

SINOPEC 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

The company shows stable revenue growth and a strong balance sheet with low leverage. However, profitability margins are modest, and recent negative cash flow raises concerns about cash management despite a history of positive cash flows.

Income Statement

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.20B	56.22B	53.03B	57.76B	52.35B
Gross Profit	5.34B	5.61B	5.61B	6.47B	5.71B
EBITDA	3.98B	3.79B	2.21B	2.32B	2.68B
Net Income	2.47B	2.34B	2.29B	2.13B	2.38B
Balance Sheet
Total Assets	81.51B	80.97B	78.68B	72.92B	71.47B
Cash, Cash Equivalents and Short-Term Investments	21.40B	24.88B	24.03B	18.67B	16.72B
Total Debt	572.33M	254.89M	271.04M	225.49M	327.07M
Total Liabilities	49.93B	50.12B	48.64B	43.79B	43.21B
Stockholders Equity	31.51B	30.84B	30.03B	29.12B	28.25B
Cash Flow
Free Cash Flow	-2.56B	2.12B	6.10B	2.29B	2.55B
Operating Cash Flow	-2.21B	2.52B	6.81B	2.94B	2.96B
Investing Cash Flow	2.53B	-2.66B	-905.08M	503.38M	-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: Positive
• Last Price: 6.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2386, the sentiment is Positive. The current price of 6.73 is below the 20-day moving average (MA) of 7.04, above the 50-day MA of 6.60, and above the 200-day MA of 5.87, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 43.15 is Neutral, neither overbought nor oversold. The STOCH value of 14.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2386.

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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2386	79 Outperform	HK$29.57B	10.84	8.27%	5.94%	11.89%	―
1618	74 Outperform	HK$73.17B	7.95	4.41%	2.60%	-18.28%	1.37%
0390	70 Outperform	HK$138.94B	3.60	7.86%	5.19%	-7.46%	-21.80%
3311	69 Neutral	HK$52.35B	5.32	13.19%	6.31%	-5.14%	-4.05%
3996	66 Neutral	HK$69.09B	5.32	7.24%	3.64%	11.09%	3.52%
2068	51 Neutral	HK$14.00B	37.27	3.36%	―	-1.99%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

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

SINOPEC Engineering Announces Interim Dividend for 2025

SINOPEC Engineering (Group) Co., Ltd. has announced an interim dividend of RMB 0.16 per share for the six months ending June 30, 2025, which will be paid in Hong Kong dollars at a rate of HKD 0.176 per share. The announcement outlines the withholding tax rates applicable to different categories of shareholders, including non-resident enterprises and individual shareholders, with rates varying based on residency and existing tax agreements with China. This dividend declaration reflects the company’s financial performance and commitment to returning value to its shareholders, while also highlighting the tax implications for various stakeholders.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$6.60 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.

SINOPEC Engineering Releases 2025 Interim Results

SINOPEC Engineering (Group) Co., Ltd. announced its audited interim results for the first half of 2025, which have been published in compliance with the relevant listing rules. The announcement is available in both Chinese and English on the company’s and the Hong Kong Stock Exchange’s websites. This disclosure is part of the company’s transparency efforts and may impact stakeholders by providing insights into its financial health and operational performance for the period.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$6.60 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.

SINOPEC Engineering Announces Key Resolutions from Board Meeting

SINOPEC Engineering (Group) Co., Ltd. announced the resolutions from its seventh board meeting of the fifth session, held on August 15, 2025. The board approved several key proposals, including the fulfillment report of key targets for the first half of 2025, the audited interim financial report, the interim report and results announcement, and the interim dividend distribution plan. These resolutions reflect the company’s strategic planning and financial health, which may influence its market positioning and stakeholder confidence.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$6.60 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.

SINOPEC Engineering Announces 2025 Interim Dividend Plan

SINOPEC Engineering (Group) Co., Ltd. announced the approval of its 2025 interim dividend distribution plan, with a dividend of RMB0.160 per share, to be paid to shareholders by October 27, 2025. The distribution reflects the company’s commitment to returning profits to shareholders and is calculated based on net profits of RMB1.376 billion for the first half of 2025. The dividend will be paid in RMB for domestic shares and in Hong Kong dollars for H shares, with specific tax implications for non-resident shareholders.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$6.60 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.

SINOPEC Engineering Announces Upcoming Board Meeting to Review Interim Results

SINOPEC Engineering (Group) Co., Ltd. has scheduled a board meeting on August 15, 2025, to review and potentially approve the interim results for the first half of 2025 and discuss the interim profit distribution plan for the year. This meeting is significant as it will provide insights into the company’s financial performance and strategic direction, impacting stakeholders’ expectations and the company’s market positioning.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$6.60 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.

SINOPEC Engineering Secures Green Hydrogen Project in Saudi Arabia

SINOPEC Engineering (Group) Co., Ltd. announced that its subsidiary, Sinopec Guangzhou Engineering Co., Ltd., has been awarded a FEED contract in collaboration with Técnicas Reunidas for a large-scale green hydrogen project in Yanbu, Saudi Arabia. This project, led by ACWA Power, aims to produce green hydrogen and ammonia using renewable energy sources, marking a significant step in global energy transition and potentially impacting the company’s market positioning in the green energy sector.

The most recent analyst rating on (HK:2386) stock is a Buy with a HK$7.10 price target. To see the full list of analyst forecasts on SINOPEC Engineering (Group) Co., Ltd. Class H stock, see the HK:2386 Stock Forecast page.