CLSA has released a research report indicating that SINOPEC CORP's (00386) full-year and fourth-quarter results for 2025 fell short of expectations. Net profit reached RMB 32.5 billion, a decline of 34% year-on-year, which was 12% below the bank's forecast and 19% below market consensus. Fourth-quarter net profit was only RMB 400 million, down 89% compared to the same period last year and dropping 95% quarter-on-quarter. The firm maintains an "Outperform" rating on the company with a target price of HK$5.2. The report suggests that escalating tensions in the Middle East could impact domestic supplies of petroleum products and petrochemicals in China. Prolonged supply disruptions, should the situation intensify, are expected to significantly affect the refining and chemical sectors in the second quarter of 2026. Shortages of gasoline and diesel supplies may worsen in the coming weeks, and plants could be forced to reduce operating rates or even halt production due to a lack of petrochemical feedstocks. As the largest downstream operator in China and Asia, SINOPEC's operations are likely to face substantial pressure under these conditions.