EB Securities: Maintains "Buy" rating for Sinopec SEG (02386), expects business to experience rapid growth.

EB SECURITIES released a research report stating that the acquisition of assets from the East China Pipeline Design Institute by SINOPEC SEG (02386) will help the company expand its business qualifications in the pipeline storage and transportation field, further enhancing the overall competitiveness of the company. The bank maintains its profit forecast for the company, expecting the company's net profit attributable to shareholders to be 25.95, 27.60, and 29.02 billion yuan respectively in 2025-2027, with corresponding EPS of 0.59, 0.63, and 0.66 yuan per share. With the support of resources from Sinopec Group, the company continues to explore domestic and international markets, and its performance is expected to continue to grow. Against the background of state-owned enterprise reform, the company's undervaluation and high dividend value are highlighted, and the bank maintains a "buy" rating on the company. EB SECURITIES main points are as follows: Event: The company announced that its wholly-owned subsidiary, Nanjing Engineering Company, has signed a Share Transfer Agreement with a pipeline storage and transportation asset company under Sinopec, agreeing to acquire 100% equity of the East China Pipeline Design Institute held by the pipeline storage and transportation asset company. The transaction price for this acquisition is 191 million yuan. Acquisition to expand pipeline storage and transportation business qualifications, enhance competitiveness in the field of pipeline storage and transportation Founded in 1993, the East China Pipeline Design Institute's main business includes storage and transportation of oil and chemical products, pipeline transportation, oil and gas depots, etc. The East China Pipeline Design Institute's after-tax net profit in 2024 was 10.48 million yuan, and its net assets as of August 31, 2025, were 168 million yuan. The East China Pipeline Design Institute holds one professional first-class qualification: Petroleum and Natural Gas (Offshore Petroleum) Pipeline Transportation. This transaction will further consolidate the company's full business chain from design to procurement, construction, and integrated EPC service capabilities. In addition, through this transaction, the company will increase and continuously enrich its qualifications and engineering execution capabilities for long-distance pipelines and storage facilities, creating conditions for expanding into emerging markets such as hydrogen pipelines, aviation fuel pipelines, chemical long-distance pipelines, etc. This transaction will also add an important bargaining chip for the company to expand its storage and transport engineering construction market in the Middle East, further expanding its engineering service scope, strengthening and optimizing its overseas business, and enhancing its international market competitiveness. Rapid growth in new contracts signed domestically and internationally, the company is expected to benefit from strengthened market development The company is accelerating its expansion in domestic and international markets, with rapid growth in the value of new contracts signed. In the first three quarters of 2025, the company's new contract value was 91.3 billion yuan, a year-on-year increase of 24.4%, including 54.5 billion yuan in new domestic contracts, a year-on-year increase of 16.3%, and 36.9 billion yuan in new overseas contracts, a year-on-year increase of 38.6%. As of September 2025, the company's uncompleted contract value was 215.5 billion yuan, a year-on-year increase of 24.8%. Looking ahead, China's modern industrial system is being constructed at an accelerated pace, the high-quality development of the petrochemical industry is solidly promoted, the downstream industrial chain of the petrochemical industry continues to extend, and capital expenditure on high-end new materials projects is growing; capital expenditure in the Middle East region has exceeded a billion US dollars, and the refining production capacity of oil-producing countries is increasing year by year. China Petroleum & Chemical Corporation Group deepens cooperation under the "Belt and Road" initiative, and the company benefits fully from the platform advantages, with broad prospects for obtaining orders in the Middle East market. The company is strengthening its market development efforts, and with the steady progress of new contracts signed domestically and internationally, the business is expected to experience high-speed growth. Risk Warning: Volatility in the petrochemical industry, project progress falling short of expectations, risks in overseas markets.