China Petroleum and Chemical Corporation (Sinopec) announced a y-o-y increase in crude oil production and refinery throughput for 1H 09. Going forward, we expect the company to benefit from the Chinese government's policy to support downstream companies by more rapidly moving retail gasoline and diesel prices in tandem with the movement in international crude oil price. However, we believe that the positives are factored in to the stock price and therefore maintain our HOLD rating over our 6-12 month investment horizon until we will reassess the rating after the company releases its full 1H 09 results. In line with our fundamental outlook, we maintain the ADR a HOLD. The Hong Kong dollar is currently pegged to the US dollar. We will reassess our rating for the ADR (1 ADR = 100 common shares) after the company releases its 1H 09 results.

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