China Petroleum & Chemical Corp (Sinopec) Financial Update

Dividend and Share Buyback Announcement

On May 29, 2025, China Petroleum & Chemical Corporation (Sinopec) announced that the combined payout ratio of cash dividends and share buybacks reached 75%. This decision was highlighted by the company’s financial research center, addressing investor inquiries about the substantial undistributed profits and the company’s strategy to enhance shareholder confidence and corporate credibility. The announcement reflects Sinopec’s commitment to returning value to its shareholders while maintaining a balance with other financial strategies.

Financial Expenses and Foreign Exchange Impact

Investors have raised questions regarding the increase in financial expenses for Sinopec in the first quarter of 2025, noting a significant rise compared to the previous year. The company attributed this increase primarily to changes in foreign exchange rates affecting foreign currency loans. Despite a modest change in interest expenses and income, the overall financial expenses saw a notable uptick, underscoring the impact of currency fluctuations on the company’s financials.

Fixed Assets and Depreciation

Inquiries about Sinopec’s fixed assets and depreciation rates were addressed, revealing that the company’s fixed assets include machinery and equipment, oil and gas assets, and buildings. The depreciation rate for the first quarter was reported at 4.3%, with total fixed assets valued at 7,082,000 million CNY. This low depreciation rate was explained in the context of the company’s asset composition and accounting practices.

Market Performance and ETFs

The oil and gas sector, including Sinopec, benefited from a rise in crude oil prices, with the Oil & Gas ETF (159697) increasing by 0.10% to 0.97 CNY. The National Oil and Gas Index (399439) saw a modest rise, with several component stocks, including Sinopec, experiencing gains. This positive market movement was attributed to the strengthening of oil and gas industry assets, driven by a 3% increase in the SC crude oil futures contract.

Dividend Reduction

In a separate announcement, Sinopec declared a dividend of 0.31 HKD per share for the year 2024, as decided during the Hang Seng Paper’s annual general meeting. This decision marks a reduction in dividend payout, reflecting the company’s strategic financial management and allocation of resources.

Corporate Developments

Sinopec also announced resolutions from its 2024 annual shareholders’ meeting and the first A-share and H-share shareholders’ meetings for 2025. These developments include updates to the company’s charter and legal opinions, indicating ongoing corporate governance and structural adjustments.

Brand Development and Global Strategy

In a significant move towards enhancing its global brand presence, Sinopec released its first-ever Brand Development Report and a global brand concept video titled “Pure Earth.” This initiative, part of the “Brand Leadership Action” campaign, aims to create and share brand value, marking a strategic step in Sinopec’s global branding efforts.

Conclusion

China Petroleum & Chemical Corporation continues to navigate the complexities of the global energy market, balancing shareholder returns with strategic investments in brand development and financial management. The company’s recent announcements reflect its commitment to transparency, shareholder value, and global brand positioning.