BEIJING, Nov. 6, 2009 (Xinhua News Agency) -- Taifook Securities believes that Sinopec's (NYSE:SNP) (SNP.NYSE; 0386.HK; 600028.SH) refining profit margin would become narrower on anticipation that the crude oil price would keep climbing in the future.

According to Taifook, Sinopec may see its refining profit margin reduced even if the Chinese government raised the retail ceiling price, because the oil price rise would be much faster than the domestic oil products price rise.

The broker calculates that Sinopec's profit margin in 2010 would narrow to 5 US dollars/barrel, lower than the 8.60 US dollars and six US dollars respectively in the first half of 2009 and the third quarter of 2009.

Taifook has adjusted downward its projection of Sinopec's profit in the 2009 to 2010 financial years by 1 to 5 percent.

Believing that the operating environment in the 2010 financial year is much better for Sinopec than that in 2008, Taifook maintains a "buy" rating on Sinopec H-shares and set the target price at 9.48 HK dollars.