China Petroleum & Chemical Corporation (0386.HK) stock analysis

In our weekly check, China Petroleum & Chemical Corporation is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 6, red flags: 7.

About China Petroleum & Chemical Corporation

China Petroleum & Chemical Corporation is an Energy company (Oil & Gas Integrated) based in China, listed on HKSE as 0386.HK.

What our checks show for 0386.HK

Red flags

• Operating profit does not cover the interest bill (-0.2x): interest is paid from cash or new debt.
• The net margin fell by 1.3 points over 5 years, to 1.3%: the company keeps less of each sale as profit.
• The gross margin fell by 11.8 points, to 12.4%: costs are rising faster than prices.
• Revenue fell 6.2% a year over the last 3 years.
• The net margin is only 1.3%: little room if costs rise.
• The stock has fallen as much as 72% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 4.8%.

Warning signs

• Net debt is 3.3x a year of EBITDA (debt/equity 0.75). That limits room in a downturn and raises refinancing risk.
• Earnings per share fell 18.8% a year over the last 3 years.
• Net profit fell 19.4% a year over the last 3 years.
• Free cash flow is only 0.7% of revenue.
• Free cash flow covers the dividend only 0.8 times.
• The stock is still below its previous peak.

Strengths

• Operating cash flow is 4.76x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 25.8% a year over the next years.
• A large company: market value $95 billion.
• Beta 0.7: the stock usually moves less than the market.
• Actively traded: about 107 million shares a day.
• Pay in shares is only 0% of free cash flow.

Next earnings report: 2026-10-29

Similar companies

XOM · CVX · SHEL · 0857.HK · TTE · PKN.WA

Questions

What grade does China Petroleum & Chemical Corporation (0386.HK) have?

In our weekly check, China Petroleum & Chemical Corporation is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 12 pass, warnings: 6, red flags: 7. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of 0386.HK stock?

This week's biggest flags for China Petroleum & Chemical Corporation: Weak interest cover, Margins falling, Gross margin falling. In total 13 of 25 checks show a warning or a red flag.

What does China Petroleum & Chemical Corporation do?

China Petroleum & Chemical Corporation is an Energy company (Oil & Gas Integrated) based in China, listed on HKSE as 0386.HK.

When does China Petroleum & Chemical Corporation report earnings next?

The next earnings report is expected on 2026-10-29. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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