Bank of America issued a research report reiterating a "Neutral" rating on SINOPEC SEG (02386) while lowering its target price by 6.25%, from HK$8 to HK$7.5.

The report stated that SINOPEC SEG aims to secure new orders totaling RMB 90 billion in 2026, comprising RMB 55 billion from China and USD 5 billion from overseas. This compares to 2025 targets of RMB 63 billion and USD 5 billion, respectively, which aligns with the bank's view that domestic chemical sector demand has peaked. For the 2025 fiscal year, the company secured new orders worth RMB 101 billion. However, its order backlog reached a record high of RMB 204 billion, with overseas projects contributing 52%. The backlog turnover period extended to 2.7 years in FY2025, compared to an average of 2 years between 2018 and 2024, reflecting longer execution cycles for overseas projects and slower domestic investment. Based on these factors, the bank reduced its forecasts for the company's post-tax net profit for 2026–2027 by 3–4%.

The bank noted that SINOPEC SEG's post-tax net profit for FY2025 fell significantly by 27% year-on-year, falling far short of expectations, primarily due to a sharp decline in profit margins within the construction sector. Although management indicated that some projects are nearing completion, the bank expressed uncertainty about a near-term recovery in margins. The company's dividend remained flat compared to the previous year.