The largest refiner in Asia – China Petroleum & Chemical Corp. revealed some of the rules that it intends to follow when examining and evaluating potential private investors for its fuel retailing operations.
According to a filing of the Hong Kong stock exchange, China Petroleum & Chemical Corp. said that the major terms when selecting its new investors will be the size of investment, bidding price, brand image and financial health and stability. Another main criteria is that none of the candidates already existing businesses and investments should “significantly” conflict with the core business of the Chinese company.
The future investors will be also evaluated as potential partners of the companys sales division. Another feature that will be considered is whether the candidates are listed abroad or onshore.
In February this year the company announced that it intends to allow offshore companies to acquire no more than 30% in its sales division. This step was approved by a large number of both investors and analysts.
In addition, the Chinese company, also known under the name Sinopec, disclosed details about the performance of its retail division. The retail unit of the company, Sinopec Sales Co., was reported by China Petroleum & Chemical Corp. to have made a net profit estimated to 25.1 billion yuan (4 billion US dollars) during 2013 and 7.71 billion yuan (1.24 billion US dollars) during the first four months of the current year. The unit currently holds more than 30 000 gasoline stations as well as more than 20 000 convenience stores.
As reported by the Wall Street Journal, China Petroleum & Chemical Corp. did not revealed a schedule for the sale of its Sinopec Sales Co. unit, but said that the partial sale would be conducted through “multiple rounds of selection and competitive negotiation”. The option of an Initial Public Offering was rejected by the company.
China Petroleum & Chemical Corp. was 3.23% down to close at 5.10 Chinese yuan per share yesterday, marking a one-year increase of 19.44%. According to data published by the Financial Times, the 7 analysts offering 12-month price targets for China Petroleum & Chemical Corp. have a median target of 6.20, with a high estimate of 7.32 and a low estimate of 5.40. The median estimate represents a 17.65% increase from the last price of 5.27.