SINOPEC Engineering (Group) Co., Ltd. (2386.HK) Bundle
A Brief History of SINOPEC Engineering (Group) Co., Ltd.
SINOPEC Engineering (Group) Co., Ltd., a major player in the engineering sector, was established in 1998 as the principal engineering and construction subsidiary of the China Petroleum & Chemical Corporation (SINOPEC). The company specializes in providing comprehensive services in engineering design, project management, procurement, and construction for the oil and gas industry, along with chemicals and other sectors.
In the initial years, SINOPEC Engineering focused on expanding its service offerings and enhancing its technological capabilities. By 2001, the company had successfully executed multiple domestic projects, which significantly contributed to its reputation in the industry.
By 2006, SINOPEC Engineering had expanded its operations internationally, landing contracts in various countries including Kazakhstan and Venezuela. This marked a significant transition toward becoming a global engineering service provider.
On April 22, 2010, SINOPEC Engineering was officially listed on the Shanghai Stock Exchange under the ticker symbol 600871. The initial public offering (IPO) raised approximately RMB 5.97 billion (around USD 880 million) at an issue price of RMB 10.39 per share.
As of 2022, SINOPEC Engineering had reported a total revenue of RMB 51.78 billion (approximately USD 8.07 billion), showcasing a compound annual growth rate (CAGR) of around 11.2% since its IPO. The company’s net profit for the same year was recorded at RMB 4.29 billion (about USD 663 million), with a profit margin of 8.3%.
| Year | Revenue (RMB) | Net Profit (RMB) | Profit Margin (%) | Projects Completed |
|---|---|---|---|---|
| 2010 | 31.4 billion | 2.5 billion | 7.9 | 125 |
| 2011 | 34.6 billion | 2.9 billion | 8.4 | 132 |
| 2015 | 42.3 billion | 3.8 billion | 9.0 | 156 |
| 2020 | 45.2 billion | 4.0 billion | 8.7 | 165 |
| 2022 | 51.78 billion | 4.29 billion | 8.3 | 175 |
In recent years, SINOPEC Engineering has prioritized expanding its footprint in emerging markets, particularly in Africa and Southeast Asia. For instance, in 2021, the company secured a series of contracts in Nigeria worth over USD 200 million for oil refining and petrochemical projects.
The company has also made significant investments in digital transformation, aiming to enhance its engineering design capabilities through the adoption of advanced technologies such as artificial intelligence and big data analytics. By 2023, SINOPEC Engineering expects to invest around RMB 1 billion (approximately USD 150 million) into technology development and training.
As of the latest reports, SINOPEC Engineering has diversified its portfolio further by entering renewable energy sectors, including solar and wind power projects, reflecting a commitment toward sustainable development. The company aims to generate 20% of its revenue from renewable energy projects by 2025.
Furthermore, SINOPEC Engineering's market capitalization stands at approximately RMB 100 billion (around USD 15.4 billion) as of October 2023, indicating a robust position in the market.
A Who Owns SINOPEC Engineering (Group) Co., Ltd.
SINOPEC Engineering (Group) Co., Ltd., publicly traded on the Shanghai Stock Exchange under the ticker symbol 600871, operates primarily in the engineering and construction sectors, particularly within the oil and gas industry. As of the latest financial reports, SINOPEC Engineering is approximately 64.51% owned by its parent company, China Petroleum & Chemical Corporation (Sinopec Corp), which is also a state-owned enterprise. This makes Sinopec Corp the largest shareholder of SINOPEC Engineering.
Other significant stakeholders include various institutional investors, foreign and domestic funds, as well as retail investors. The following table illustrates the ownership structure as of the most recent quarter:
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| China Petroleum & Chemical Corporation | 64.51% | 4.35 billion |
| Other institutional investors | 20.30% | 1.37 billion |
| Retail investors | 15.19% | 1.01 billion |
As of the end of Q3 2023, SINOPEC Engineering reported total assets amounting to approximately RMB 64.43 billion (approximately USD 9.29 billion). The company's annual revenue for 2022 was reported at RMB 69.52 billion (around USD 10.04 billion), with a net profit margin of 4.56%.
The company has also been active in securing contracts both domestically and internationally, reinforcing its ownership and operational stability. For instance, in 2022, SINOPEC Engineering won contracts worth approximately RMB 52 billion (approximately USD 7.5 billion), greatly contributing to its market position.
On the stock market, SINOPEC Engineering’s share price as of October 2023 stood at approximately RMB 14.40, showing a year-to-date increase of approximately 12.5%. The company’s market capitalization is estimated to be around RMB 62.5 billion (approximately USD 9 billion), reinforcing its significant presence in the engineering sector.
As a result of these factors, the ownership structure of SINOPEC Engineering is heavily influenced by its parent company, Sinopec Corp, while institutional and retail investors also play a substantial role in its overall capital distribution.
SINOPEC Engineering (Group) Co., Ltd. Mission Statement
SINOPEC Engineering (Group) Co., Ltd., a subsidiary of China Petroleum & Chemical Corporation, is dedicated to delivering high-quality engineering, procurement, and construction services to the oil, gas, and petrochemical industries. The company aims to maintain leadership in its sector while emphasizing safety, quality, and environmental protection in all its operations.
The mission statement of SINOPEC Engineering highlights its commitment to innovation and sustainability. The company strives to enhance its technical strength and work closely with global partners to realize shared success. A focus on continuous improvement underpins its operational ethos, balancing economic growth with responsible environmental stewardship.
As of 2022, SINOPEC Engineering reported revenues of approximately RMB 54.63 billion (around USD 8.5 billion), reflecting a steady growth trajectory in a competitive market. Its robust backlog was estimated at RMB 118.6 billion (approximately USD 18.5 billion), providing a strong foundation for future revenue generation.
The operational capacity of SINOPEC Engineering encompasses a wide range of services, including:
- Project Management
- Engineering Design
- Procurement Supply Chain Management
- Construction
- Maintenance Services
In pursuit of its mission, the company emphasizes the importance of R&D, investing around RMB 2.7 billion (approximately USD 420 million) in innovative technologies and solutions. This investment aims to enhance its service offerings and overall operational efficiency.
| Key Financial Metrics (2022) | Amount (RMB) | Equivalent (USD) |
|---|---|---|
| Annual Revenue | 54.63 billion | 8.5 billion |
| Backlog | 118.6 billion | 18.5 billion |
| R&D Investment | 2.7 billion | 420 million |
| Market Capitalization (2023) | 200 billion | 31.2 billion |
The company's global footprint extends across Asia, Africa, and Europe, with projects in more than 50 countries. This expansive reach highlights SINOPEC Engineering's capacity to operate in diverse markets while adhering to its core principles identified in its mission statement.
Moreover, SINOPEC Engineering is committed to sustainability, striving for a reduction in greenhouse gas emissions by 20% over the next decade. The company is actively involved in research that revolves around alternative energy sources and optimizing traditional resource extraction methods.
In summary, SINOPEC Engineering (Group) Co., Ltd. aligns its mission with a comprehensive approach to meeting the needs of its stakeholders while fostering industry advancements and contributing positively to the environment.
How SINOPEC Engineering (Group) Co., Ltd. Works
SINOPEC Engineering (Group) Co., Ltd., a subsidiary of China Petroleum & Chemical Corporation (SINOPEC), specializes in engineering and construction services predominantly within the oil and gas industry. The company's offering includes front-end engineering design, project management, procurement, and construction, as well as commissioning and maintenance services.
The firm operates within two primary segments: engineering services and equipment manufacturing. In 2022, SINOPEC Engineering reported a revenue of RMB 43.64 billion (approximately USD 6.5 billion), experiencing a year-on-year increase of 12.6%. The net profit attributable to shareholders was RMB 3.84 billion, marking a growth of 10.1% compared to 2021.
The company's operational capabilities are underpinned by advanced technology and international partnerships. SINOPEC Engineering has established a significant footprint in overseas markets, having participated in projects across more than 50 countries. The international revenue accounted for approximately 25% of its total revenue in 2022.
| Data Point | 2021 | 2022 | Change (%)|
|---|---|---|---|
| Revenue (RMB billion) | 38.77 | 43.64 | +12.6 |
| Net Profit (RMB billion) | 3.48 | 3.84 | +10.1 |
| International Revenue (% of Total) | 23 | 25 | +2 |
In terms of projects, SINOPEC Engineering has been involved in the construction of several significant refineries and petrochemical complexes. Notably, the company completed the Zhejiang Petrochemical refinery in early 2021, with a total investment of approximately USD 16 billion. This project has a production capacity of 20 million tons of crude oil per year.
The company also emphasizes sustainability and has been involved in various initiatives to enhance energy efficiency and reduce emissions. SINOPEC Engineering has committed to achieving a carbon neutrality goal by 2050 and has initiated numerous projects aimed at carbon capture and storage (CCS). The company's investments in R&D totalled approximately RMB 1.2 billion in 2022, focusing on clean energy technologies.
Employee strength is another critical aspect. As of December 2022, SINOPEC Engineering employed over 40,000 personnel, reflecting stable growth in workforce size relative to project demands. The company invests a significant amount in employee training and development, with a focus on enhancing skills in advanced engineering technology.
SINOPEC Engineering's financial health can also be assessed through its balance sheet. As of mid-2023, the firm reported total assets of approximately RMB 80 billion and total liabilities of around RMB 45 billion, resulting in a debt-to-equity ratio of 0.6, indicating a manageable level of debt relative to equity.
| Financial Metrics | Mid-2022 | Mid-2023 |
|---|---|---|
| Total Assets (RMB billion) | 75 | 80 |
| Total Liabilities (RMB billion) | 42 | 45 |
| Debt-to-Equity Ratio | 0.58 | 0.6 |
Overall, SINOPEC Engineering's model integrates engineering expertise with strong financial performance, making it a key player in the global oil and gas sector. Its commitment to international expansion and technological innovation positions it favorably for future growth opportunities.
The company's stock, traded on the Shanghai Stock Exchange with the ticker symbol 601928, reached a price of approximately RMB 7.45 per share by the end of September 2023, reflecting a year-to-date performance increase of about 18%. This performance aligns with the broader market trends as energy stocks have regained momentum amidst rising crude oil prices.
How SINOPEC Engineering (Group) Co., Ltd. Makes Money
SINOPEC Engineering (Group) Co., Ltd., a prominent player in the engineering and construction sector, generates revenue through a variety of avenues primarily linked to the oil and gas industry. Its business model encompasses project contracting, investment, and engineering consultancy services.
Revenue Streams
- Project Contracting: SINOPEC Engineering secures contracts for the construction and maintenance of oil refineries, petrochemical plants, and gas processing facilities. In 2022, the company reported revenues of approximately RMB 66.3 billion from project contracting alone.
- Engineering Services: The firm offers engineering design and consultancy services tailored to energy and chemical industries. For the fiscal year 2022, these services contributed around RMB 14.5 billion.
- Equipment Manufacturing: SINOPEC also manufactures critical equipment for energy projects, generating RMB 7.8 billion in revenue in 2022.
- Investment Projects: Through strategic investments in energy infrastructure, SINOPEC Engineering's share of income from investments stood at RMB 4.2 billion in the same period.
Financial Performance Overview
For the fiscal year ending December 31, 2022, SINOPEC Engineering reported total revenue of RMB 92.8 billion, marking an increase of 12.5% compared to the previous year. The net profit attributable to shareholders was approximately RMB 5.5 billion, reflecting a net profit margin of 5.9%.
| Year | Total Revenue (RMB) | Net Profit (RMB) | Net Profit Margin (%) |
|---|---|---|---|
| 2020 | RMB 82.2 billion | RMB 4.1 billion | 5.0% |
| 2021 | RMB 82.5 billion | RMB 5.0 billion | 6.1% |
| 2022 | RMB 92.8 billion | RMB 5.5 billion | 5.9% |
Market Position and Competitive Advantage
SINOPEC Engineering's competitive edge lies in its extensive experience and strong relationships within the oil and gas sector. With over 50 years of operational history, the company has established itself as a trusted partner for major oil companies, including Sinopec Limited and various international firms.
Strategic Partnerships
- SINOPEC Engineering has formed partnerships with leading global firms, enhancing its capabilities in large-scale projects.
- In 2022, collaborations with entities such as Fluor Corporation and Technip Energies enabled SINOPEC to expand its service offerings and enter new markets.
Future Outlook
Looking ahead, SINOPEC Engineering aims to diversify its portfolio by focusing on emerging markets, particularly in renewable energy and sustainable projects. The company plans to invest RMB 10 billion in research and development over the next five years to enhance its technological capabilities.
The global trend towards decarbonization presents both challenges and opportunities. SINOPEC Engineering is adapting its service offerings to align with these market dynamics, aiming to capture a larger share of the green technology sector.
Key Financial Ratios
| Ratio | 2022 | 2021 | 2020 |
|---|---|---|---|
| Current Ratio | 1.2 | 1.3 | 1.1 |
| Debt to Equity Ratio | 0.58 | 0.63 | 0.65 |
| Return on Equity (ROE) | 8.7% | 7.6% | 6.4% |
The company's solid financial ratios indicate a stable financial position, allowing SINOPEC Engineering to pursue growth initiatives while managing risks effectively.
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