SINOPEC CORP (00386) declined nearly 4% in afternoon trading. As of press time, the stock was down 3.34% to HK$4.34, with a turnover of HK$798 million.

On the news front, China Petroleum & Chemical Corporation released its interim results. According to financial data and indicators prepared under China's enterprise accounting standards, the group achieved revenue of RMB 1.41 trillion in the first half of this year, down 10.6% year-on-year; net profit attributable to shareholders was RMB 21.483 billion, down 39.8% year-on-year.

The group's main business revenue in the first half was RMB 1,380.4 billion, down 10.7% year-on-year, mainly due to declining prices of petroleum and petrochemical products as well as lower sales volumes of refined oil products.

UBS published a research report noting that SINOPEC CORP's second-quarter net profit was RMB 8.2 billion, down 53% year-on-year and 38% quarter-on-quarter. The firm expects SINOPEC CORP's third-quarter earnings to improve slightly. Oil prices were more stable during the period compared to the previous quarter, and the bank believes the negative impact of crude oil inventory on earnings will be smaller. Additionally, as the third quarter is the traditional peak season for chemicals, profits from the chemical business may increase.

In the long term, the firm believes that China's anti-involution measures, combined with overseas capacity exits, will boost refining fundamentals. Furthermore, the company has lowered its full-year capital expenditure guidance by 5%.