According to a research report from BOCI, SINOPEC CORP (00386) recorded a net profit increase of 54% quarter-on-quarter to RMB 13.6 billion in the third quarter, which was 21% higher than the bank's expectations. This outperformance was primarily driven by significantly better-than-expected profits in the refining segment.

Despite the sharp rise in oil prices, BOCI forecasts that Sinopec's fourth-quarter earnings will decline by 7% quarter-on-quarter. The bank maintains its "Hold" rating and has raised its target price from HK$4.92 to HK$5.

The report also noted that recent deterioration in Middle East geopolitical tensions has once again pushed up freight and insurance costs for seaborne imported crude. Additionally, the Chinese government's increases in domestic gasoline and diesel prices since September have been below theoretical levels.