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JPMorgan raised the forecast of Sinopec, PetroChina, and CNOOC’s dividend payout ratios to 80%, 60%, and 50%, respectively, from previous estimates of 75%, 45%, and 40%.
The bank expects the three energy giants’ final dividends will reach 0.29 yuan, 0.3 yuan, and 0.7 yuan per share, respectively, with a dividend yield of 7%, 7.4%, and 6.9% compared to the current H-share prices.
The bank also predicts that the return on equity for Sinopec, PetroChina, and CNOOC will reach 11.6%, 10.7%, and 17.5%, respectively, by 2025, higher than market expectations and may lead to a revaluation of the industry, it said.
JPMorgan raised target prices for Sinopec and PetroChina to HK$5.5 and HK$5.4, respectively, while maintaining a Buy rating for both stocks.