Sinopec: A Bullish Signal For Long-Term Investors
By James Hartje:Sinopec (NYSE: SNP) is a state-owned, China-based integrated oil, gas and chemical company. Through its subsidiaries, the company operates in four business segments: Exploration/production, refining, marketing/distribution/chemicals, corporate and other. The company generates around three-fifths of its revenue from its refining segment, while exploration, production and chemicals contribute the remainder. Currently, Sinopec owns eight of the top ten refineries in China and its refining capacity is ranked second globally. Sinopec has become a world leader in recent years. China's new refined oil pricing mechanism in 2008 turned Sinopec's refining business completely around, as it had been struggling in previous years.One problem with Sinopec’s business is the fact that it is highly vulnerable to spikes in crude oil prices, a commodity that is constantly shifting; Sinopec buys more than 70% of its supply from the global markets. Just look at the trend recently as crude oil has surged recently to overComplete Story »
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