Sinopec Shares Fall to Three-Month Low After Reporting 2025 Profit Drop

By Megan Cheah

The Hong Kong-listed shares of China Petroleum & Chemical Corp. fell to a three-month low after the Chinese energy major posted a drop in 2025 net profit.

The stock fell as much as 3.8% to 4.50 Hong Kong dollars, or US$0.57, on Monday morning, before paring losses to trade 3.4% lower. The Shanghai-listed shares dropped as much as 2.5%.

The Chinese energy major, better known as Sinopec, said Sunday that net profit for 2025 dropped 34% to 32.48 billion yuan, equivalent to US$4.72 billion.

While the company's free cash flow turned positive for the first time since 2022 thanks to capital-expenditure discipline, analysts from Citi expect Sinopec's refining margin to come under pressure into the second quarter as crude oil premium and freight costs jump amid the ongoing Strait of Hormuz disruption.

The company's muted 2026 gas production growth target and stagnant marketing could also raise concerns, the Citi analysts said. Sinopec set a spending target between 131.6 billion yuan to 148.6 billion yuan, lower than 2025's target of 164.3 billion yuan.

The Citi analysts favor Chinese oil-and-gas peer PetroChina over Sinopec, given the former's access to competitive pipeline gas and favorably priced Russian crude supply, which is less pressured by higher freight rates. PetroChina's earnings are due this week.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

March 22, 2026 23:40 ET (03:40 GMT)