(Reuters, Oct 29, 2006) Sinopec Corp. (0386.HK: Quote, Profile, Research), which has been outshone by China's two other listed oil companies CNOOC Ltd. (0883.HK: Quote, Profile, Research) and PetroChina Co Ltd.(0857.HK: Quote, Profile, Research), may be worth another look, some analysts and fund managers told Barron's financial weekly.

Sinopec, or China Petroleum & Chemical, derives a large part of its revenue from refining, marketing, distribution and petrochemical production and less than 10 percent from exploration and production.

China's government allows crude-oil prices to move in line with international markets, but controls refined-oil products to avoid civil, unrest, Barron's said in its Oct. 30 edition. Over the past two years, this has hurt Sinopec, which has lost money for each barrel of oil it refined but stayed profitable because of high-margin oil-production operations and government subsidies, Barron's said.

With crude prices down about 23 percent from its peak, Sinopec's refining losses may have finally stopped, Barron's said in its Oct. 30 edition, citing a Leman Brothers note.

"The rest of the world's (oil majors) are suffering, but Sinopec is laughing all the way to the bank," Barron's said, citing a note from CLSA Asia-Pacific Markets analyst Gordon Kwan.

The company's earnings could rise 45 percent next year, Barron's said, citing BOCI Research analyst Lawrence Lau.
source:Reuters