Sinopec Kantons Holdings Limited (‘Sinopec Kantons’) is a major oil and natural gas logistics service provider in China and listed on the Hong Kong Stock Exchange. As a red chip, Sinopec Kantons (ticker code 0934 HK) IPO-ed in 1999 at HKD1.02. It is the midstream logistics arm of Sinopec Group (HKEX: 0386), an oil major in China. Sinopec Group owns ~60% of Sinopec Kantons, with the remaining publicly held. As at 21 June 2020, Sinopec Kantons has a market capitalisation of HKD$7.4 billion. It has business activities in crude oil jetties, overseas oil storage terminals, gas pipelines and LNG vessels.

BUSINESS MODEL OF SINOPEC KANTONS HOLDINGS

As seen its Diagram 1, Sinopec Kantons’ main business segments can be broken down into 4 categories:

I) CRUDE OIL JETTY

Sinopec Kantons is the largest oil terminal operator in China, with a total of 7 ports with 37 berths and an annual handling capacity of 290m tonnes as at end 2019. It dominates the oil jetty VLCC market...