Oil: We are optimistic about the medium-term up, but felt that there are two higher stages of Phase 1 is expected to promote economic recovery, demand is still in the stage of decline, affecting mainly the oil price expectations for the future and the financial property; the first two stages is expected to boost the marginal effect of decreasing the impact of oil prices is mainly a recovery in demand to promote a balance between supply and demand to find a new ,09-10-year period, we believe that the probability of sharply higher oil prices average less is expected to average in the 60-80 U.S. dollars / barrels per day. An oil refinery is still beneficial to maximize profits, reduce the policy risks, and therefore the first choice in the industry we are still refining enterprises as investment targets. We also believe that the pricing

Development and Reform Commission has two phases, the first phase of a Development and Reform Commission promulgated the oil-price management approach, establishing a new oil pricing mechanism, the first two stages of Development and Reform Commission to adjust oil further improve the strict and did not transfer enough to tune in place, point in time is even shorter.

09 years ago, 7 months, Sinopec outperform the recent decline in a month There are several reasons we feel that the main:

1,9 on 2 oil increases the time lag, an increase is not in place, the market worried that oil pricing mechanism can strictly enforced, affect the valuation; 2 to 4 quarter, an increase of good results this year have been reflected in the Shares on the next step to look at a 10-year stock price performance of support, the market worried about a 10-year expected inflation and higher oil prices, the refined oil as difficult to strictly enforce, refining profits will fall.

Strategy: mid-term we still hold the petroleum and petrochemicals are recommended devaluation Sinopec. Sinopec: Recommended There are 2 main reasons: one, the present problem is not performance is the valuation of the market for refining the risk of future expectations, which we do not think a month because of losses on the view that the mechanism refining problems, a The main reason is a result of raw material till the lag effect is due to the normal inventory turnover caused by fluctuations in production and operation, 2, volume growth, product upgrades and price increase: 10 years of crude oil processing volume increased by 5.4%, 27.7% of ethylene increased. Puguang gas fields natural gas production increased 60%; 10 years, State III standards for gasoline and diesel began the implementation of product upgrades are also a possible price adjustment window (Beijing last year to State III price adjustment 0.39 Yuan / liter). Overseas assets into four quarters are likely to start. Sinopec 09,10-year EPS forecast to 0.8 and 0.92, respectively, maintaining highly recommended rating. Forecast EPS of oil 09 and 10 years respectively, 0.69,0.9, maintain the recommended rating. As the oil and gas production per share, higher profits, therefore the stability of the oil refining, the oil and natural gas price increases of oil prices even higher sensitivity. Liao Tung Chemical Industry: the company's valuation of the level of increase is small in A-share market investment class petrochemical subject of even greater flexibility. Concerned about the coal chemical industry section of higher oil prices bring opportunities for trading. Which recommended that concerned about the new coal chemical technology on behalf of Dan-oriented science and technology, the cost of future decline in chemical space, and Thailand.