HSBC Research maintains a Hold rating on SINOPEC CORP due to a strong 27% YoY increase in net profit in 1QYY, driven by robust refining margins. However, they anticipate a decline in profitability in 2QYY due to rising crude oil procurement and logistics costs, along with a price cap on refined oil products limiting cost pass-through. Additionally, the chemicals segment is expected to face widening losses due to lower operating rates and weak downstream demand. Despite raising earnings forecasts for 2026 to 2028, the overall outlook remains cautious.
