UPDATE: Citigroup Upgrades China Petroleum & Chemical Corp. to Buy, Raises PT

In a report published Friday, Citigroup upgraded its rating on China Petroleum & Chemical Corp. (NYSE: SNP) from Neutral to Buy.

Citigroup noted, “We rate Sinopec ADRs as Buy. We expect a strong earnings recovery in FY13 after very weak earnings in FY12, on the back of better refining margins and improved regional chemical margins. In FY12 the company posted significant losses due to government price controls on gasoline and diesel fuel. However we believe the government's implementation of the oil product pricing mechanism improved in 2H12 leading the domestic refining to turn positive late in the year. We also believe the government is likely to introduce a new more market-oriented system for changing domestic oil product prices in 2013, which may reduce the regulatory risk in Sinopec's refining business.”

China Petroleum & Chemical Corp. closed on Thursday at $100.71.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.