August 30, 2007
Target $120 on Buy-Rated Sinopec

By Zacks Equity Research

While we track several of the strongest Chinese companies for investors looking to increase their exposure to the world\'s fastest-growing economy, we excerpt a few notes from the latest Buy report on Sinopec (NYSE: SNP) by Zacks senior Chinese market analyst Paul Cheung, CFA:

\'Sinopec recently reported strong interim results for the first half of 2007. While a number of uncertainties remain, we believe that the near- to medium-term environment supports its continued upstream production growth and downstream capacity expansion.

\'Moreover, Sinopec\'s integrated petrochemical and refining businesses are expected to benefit from possible price reform for refined products in China. Therefore, we are maintaining our Buy recommendation on Sinopec.

\'Currently, SNP ADRs are trading at 12.0x our 2007 earnings estimate, lower than its global and Chinese peers. SNP ADRs are also trading at 10.9x our 2008 earnings estimate, still lower than its global and Chinese peers. Given the company\'s good position to leverage China\'s strong economic growth, we see upside potential from current levels. Our $120.00 price objective reflects a P/E multiple of 11.8x our 2008 earnings estimate.\'

Read the full analyst report on SNP

(Source: Zacks.com)