CLSA released a research report stating that based on a sum-of-the-parts valuation method, SINOPEC CORP's (00386) target price has been reduced from HK$4.6 to HK$4.5, while China Petrochemical Corp's (600028.SH) target price has been correspondingly lowered from RMB 6.5 to RMB 6.3. The firm maintains its "Outperform" rating for both SINOPEC's H-shares and A-shares, though it should be noted that CLSA's preference order for the "three oil barrels" is: PetroChina Company Limited (00857), China National Offshore Oil Corp (00883), and finally SINOPEC. CLSA noted that SINOPEC issued a profit warning for the first half of 2025, indicating weak profitability in the second quarter of 2025, reflecting the continued challenging operating environment for China's downstream oil sector (refining and petrochemicals). While the market appears to expect SINOPEC and other Chinese refining companies to benefit from China's anti-involution policies, the firm believes the upside potential may be overestimated. CLSA has lowered its forecasts for SINOPEC's fiscal years 2025 to 2027 by 4% to 5% to reflect the weak second-quarter 2025 performance.