Everbright Securities released a research report stating that SINOPEC SEG's (02386) acquisition of the East China Pipeline Design Institute assets from its parent group will help the company expand its business qualifications in the pipeline storage and transportation sector, thereby further enhancing its overall competitiveness. The brokerage maintains its profit forecasts for the company, expecting net profit attributable to shareholders for 2025-2027 to be RMB 2.595 billion, RMB 2.760 billion, and RMB 2.902 billion, respectively, with corresponding EPS of RMB 0.59, RMB 0.63, and RMB 0.66 per share. Leveraging the resource advantages of the Sinopec Group, the company continues to explore domestic and international markets, with performance expected to grow steadily. Against the backdrop of state-owned enterprise reform, the company's low valuation and high dividend value are prominent, leading the brokerage to maintain its "Buy" rating. The main views of Everbright Securities are as follows.
The company announced that its wholly-owned subsidiary, Nanjing Engineering Company, signed an Equity Transfer Agreement with Sinopec's Pipeline Storage and Transportation Assets Company. Accordingly, Nanjing Engineering Company agreed to acquire a 100% equity stake in the East China Pipeline Design Institute held by Pipeline Storage and Transportation Assets Company. The transaction consideration is RMB 191 million.
The acquisition expands the company's qualifications in the pipeline storage and transportation business, enhancing its competitiveness in this field. Established in 1993, the East China Pipeline Design Institute's main businesses include the storage and transportation of petroleum and chemical products, pipeline transportation, and oil and gas depots. In 2024, the design institute reported a net profit after tax of RMB 10.48 million, with net assets of RMB 168 million as of August 31, 2025. It holds one professional Class-A qualification: the pipeline transportation specialty within the oil and natural gas (offshore oil) industry. This transaction will further consolidate the company's full business chain, integrated EPC service capabilities from design to procurement and construction. Furthermore, it will enable the company to augment and continuously enrich its EPC qualifications and project execution capabilities for long-distance pipelines and storage facilities, creating conditions for expanding into emerging markets such as hydrogen pipelines, aviation fuel pipelines, and long-distance chemical product pipelines. The transaction also adds significant leverage for the company to开拓 the storage and transportation engineering construction market in the Middle East, further broadening its engineering service scope and strengthening, optimizing, and expanding its overseas business to enhance international market competitiveness.
With rapidly growing new contracts domestically and internationally, the company's strengthened market expansion efforts are expected to yield full benefits. The company is accelerating its market expansion at home and abroad, leading to rapid growth in the value of new contracts. In the first three quarters of 2025, the value of new contracts signed reached RMB 91.3 billion, a year-on-year increase of 24.4%. This includes domestic new contracts worth RMB 54.5 billion, up 16.3% year-on-year, and overseas new contracts worth RMB 36.9 billion, surging 38.6% year-on-year. As of September 2025, the company's outstanding contract value stood at RMB 215.5 billion, an increase of 24.8% year-on-year. Looking ahead, China's modern industrial system is accelerating its development, high-quality development in the petrochemical industry is steadily advancing, the downstream petrochemical industry chain continues to extend, and capital expenditure for high-end new material projects remains growing. In the Middle East, active capital expenditure has exceeded one hundred billion US dollars, and the refining and chemical production capacity of oil-producing countries is increasing year by year. As Sinopec Group deepens its "Belt and Road" cooperation, the company fully benefits from its platform advantages, presenting broad prospects for securing orders in the Middle Eastern market. By intensifying its market development work and as new domestic and international contracts progress steadily, the company's business is poised for high-speed growth.
Risk提示: Fluctuations in the refining and chemical industry's景气度, project progress falling short of expectations, and overseas market risks.
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