China Petroleum & Chemical Corp

China Petroleum & Chemical Corp maintains a capital structure characterized by significant leverage, with long-term debt of CNY 531.0 billion against total equity of CNY 827.5 billion, resulting in a debt-to-equity ratio of 0.64. The company holds CNY 81.1 billion in cash and equivalents, but this is insufficient to cover total liabilities of CNY 1.33 trillion, leading to a negative net cash position. Liquidity is constrained, evidenced by a current ratio of 0.75, which falls below the standard threshold of 1.0, indicating potential short-term working capital pressures. The firm generates substantial operating cash flow of CNY 162.5 billion, which supports its heavy capital expenditure program of CNY 115.5 billion, resulting in a modest free cash flow of CNY 19.8 billion.

Profitability metrics reflect the cyclical nature of the integrated oil and gas business, with a net income of CNY 32.5 billion on revenue of CNY 2.78 trillion. The return on equity stands at 4.38%, while return on assets is 1.68%, suggesting efficient but capital-intensive operations. The company trades at a compressed valuation multiple, with a price-to-earnings ratio of 2.66 and a price-to-book ratio of 0.12, indicating the market prices in significant asset heaviness and cyclical risk. The EV/EBITDA multiple of 10.23 provides a broader view of enterprise value relative to earnings power, while the EV/Revenue ratio of 0.2 underscores the low-margin, high-volume nature of the business.

Analysts project 17.7% upside to a mean price target of 5.17, reflecting a consensus buy recommendation from 14 analysts.

Cash conversion of 4.48 ranks best-in-class among 194 integrated oil and gas peers, indicating superior cash generation efficiency.

Free cash flow improved by 26.9% year-over-year to nearly 20 billion CNY, demonstrating recovering cash generation capabilities.

Dilution risk is assessed as low, suggesting minimal threat to existing shareholder equity value from share issuance.

Operating margin of 1.94% places the company in the bottom quartile of 180 integrated oil and gas peers.

Credit risk is flagged as high, indicating significant potential for financial distress or default issues.

Long-term debt increased to 531 billion CNY in FY2026, reflecting a rising leverage burden on the balance sheet.

Revenue ¥706.70B, −3,9% YoY; Operating income +23,1% YoY.

• ▍Revenue ¥706.70B, −3,9% YoY
• ▍Operating income +23,1% YoY
• ▍Net income +26,9% YoY
• ▍Free cash flow +26,5% YoY
• ▍Net margin 2.5%

Revenue ¥670.14B, −5,3% YoY; Operating income −73,0% YoY.

• ▍Revenue ¥670.14B, −5,3% YoY
• ▍Operating income −73,0% YoY
• ▍Net income −89,3% YoY
• ▍Free cash flow +41,9% YoY
• ▍Net margin 0.1%

Revenue ¥704.39B, −10,9% YoY; Operating income +5,5% YoY.

• ▍Revenue ¥704.39B, −10,9% YoY
• ▍Operating income +5,5% YoY
• ▍Net income +3,5% YoY
• ▍Free cash flow +99,1% YoY
• ▍Net margin 1.2%

Revenue ¥673.70B, −14,3% YoY; Operating income −47,1% YoY.

• ▍Revenue ¥673.70B, −14,3% YoY
• ▍Operating income −47,1% YoY
• ▍Net income −46,7% YoY
• ▍Free cash flow −29,9% YoY
• ▍Net margin 1.5%

Revenue ¥735.36B; Operating income ¥20.89B.

• ▍Revenue ¥735.36B
• ▍Operating income ¥20.89B
• ▍Net margin 1.9%

Revenue ¥708.02B; Operating income ¥7.09B.

• ▍Revenue ¥708.02B
• ▍Operating income ¥7.09B
• ▍Net margin 0.5%

Revenue ¥790.41B; Operating income ¥12.57B.

• ▍Revenue ¥790.41B
• ▍Operating income ¥12.57B
• ▍Net margin 1.0%

Revenue ¥786.16B; Operating income ¥23.70B.

• ▍Revenue ¥786.16B
• ▍Operating income ¥23.70B
• ▍Net margin 2.3%

Revenue ¥2.78T, −9,5% YoY; Operating income −31,2% YoY.

• ▍Revenue ¥2.78T, −9,5% YoY
• ▍Operating income −31,2% YoY
• ▍Net income −33,6% YoY
• ▍Free cash flow +26,9% YoY
• ▍Net margin 1.2%

Revenue ¥3.07T, −4,3% YoY; Operating income −18,6% YoY.

• ▍Revenue ¥3.07T, −4,3% YoY
• ▍Operating income −18,6% YoY
• ▍Net income −16,1% YoY
• ▍Free cash flow +236,3% YoY
• ▍Net margin 1.6%

Revenue ¥3.21T, −3,2% YoY; Operating income +14,5% YoY.

• ▍Revenue ¥3.21T, −3,2% YoY
• ▍Operating income +14,5% YoY
• ▍Net income −11,9% YoY
• ▍Free cash flow +54,3% YoY
• ▍Net margin 1.8%

Revenue ¥3.32T, +21,1% YoY; Operating income −19,9% YoY.

• ▍Revenue ¥3.32T, +21,1% YoY
• ▍Operating income −19,9% YoY
• ▍Net income −8,1% YoY
• ▍Free cash flow −165,3% YoY
• ▍Net margin 2.0%