Sinopec SSC (Sinopec Shanghai Petrochemical Company Limited, stock symbol: 600688.SH) is a major petrochemical company headquartered in Shanghai, China. It is a subsidiary of China Petroleum & Chemical Corporation (Sinopec), one of the world's largest oil and gas companies.
1. company profile Sinopec SSC specializes in the production and distribution of petrochemical products, including plastics, synthetic fibers, lubricants, chemicals and petrochemical intermediates. The company operates refineries and chemical plants in the Shanghai region and supplies both domestic and international markets. The main source of revenue is the production and sale of petrochemical products, especially plastics and synthetic fibers.
2 Competition and market position Sinopec SSC operates in a highly competitive market where it competes with other major Chinese petrochemical companies such as PetroChina and CNOOC. The company benefits from its affiliation with the Sinopec Group, which gives it access to resources and markets. However, it faces challenges such as commodity price volatility and the need to invest in more environmentally friendly technologies.
3. fundamental figures Revenue: In 2023, Sinopec SSC generated revenue of approximately CNY 89.15 billion. Profit performance: The company recorded a net loss of approximately CNY 651 million in the same year. Equity: Equity amounted to approximately CNY 24.84 billion. Debt: Total debt was approximately CNY 1.5 billion, resulting in a gearing ratio of 6.1%. Return on equity (RoE): The RoE amounted to -2.58%, which indicates the current financial challenges. Margins: The gross margin was 15.32%, while the operating margin was -0.74% and the net margin was -0.43%.
4. dividend quality Sinopec SSC has paid dividends in the past, but there have been no distributions in recent years. The company's dividend policy appears to be conservative, especially given the current financial situation.
5. current valuation The forward P/E ratio is negative, indicating expected losses. The P/E ratio is around 0.27, indicating that the stock is favorably valued compared to sales. The P/B ratio is around 1.5, which is moderate compared to the industry average. The EV/sales ratio is around 0.26, which indicates a low valuation compared to sales.
6. opportunities and risks Opportunities: Recovery in global demand for petrochemical products. Possible government support for the petrochemical industry in China. Potential for cost reductions through efficiency improvements.
Risks: Continued price fluctuations for raw materials. Environmental regulations and pressure to reduce emissions.
7 Conclusion and assessment Sinopec SSC is currently facing financial challenges such as negative margins and losses. The stock is valued favorably relative to sales, but the negative financial metrics reflect the company's current difficulties. Investors should closely monitor developments in the industry and the company's financial results before making an investment decision.
