China Petroleum & Chemical Corp (ADR) (SNP), Exxon Mobil Corporation (XOM): Turnaround of Asia’s Largest Refiner

China Petroleum & Chemical Corp (ADR) (NYSE:SNP) had earlier captured global headlines due to its $3.5 billion bond sale, the largest in Asia in a decade (excluding Japan). In February this year, the business also raised $3.1 billion through private placement. The company is purchasing overseas assets from its parent Sinopec Group to improve its portfolio as it aims to compete with the big boys of this industry such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A). About a month ago it revealed that it would buy assets — including some located in Russia, Columbia and Kazakhstan — worth $1.5 billion from its parent as it plans to quadruple its proven overseas reserves to 330.2 million barrels.

Source: Yahoo! Finance

Both Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) have released their quarterly results in the final week of April, in which they managed to beat the Wall Street’s earnings expectations but missed revenue estimates. Shell also released its earnings report, in which it too beat the earnings estimates–but the main focus was the WSJ report that revealed that its CEO Peter Voser will retire next year.

In the last six months, China Petroleum & Chemical Corp (ADR) (NYSE:SNP)’s ADR is up 4.6% while PetroChina is down 7.5%, but the latter is still more expensive than the former. With its current price level, Sinopec offers an extremely attractive yield of 5.4%. Both companies generate almost identical return on asset while Sinopec’s gives a better return on equity. However, the two Chinese stocks are currently more expensive than ExxonMobil, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and Chevron. All of these three oil majors generate significantly higher returns on assets and equities than their Chinese peers.

The article Turnaround of Asia’s Largest Refiner originally appeared on Fool.com and is written by Sarfaraz Khan.

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