SINOPEC Engineering (Group) Co (HKSE:02386) Operating Income : HK$1,898 Mil (TTM As of Dec. 2023)

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What is SINOPEC Engineering (Group) Co Operating Income?

SINOPEC Engineering (Group) Co's Operating Income for the six months ended in Dec. 2023 was HK$1,062 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was HK$1,898 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. SINOPEC Engineering (Group) Co's Operating Income for the six months ended in Dec. 2023 was HK$1,062 Mil. SINOPEC Engineering (Group) Co's Revenue for the six months ended in Dec. 2023 was HK$34,335 Mil. Therefore, SINOPEC Engineering (Group) Co's Operating Margin % for the quarter that ended in Dec. 2023 was 3.09%.

Warning Sign:

SINOPEC Engineering (Group) Co Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -7.7%.

SINOPEC Engineering (Group) Co's 5-Year average Growth Rate for Operating Margin % was -7.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. SINOPEC Engineering (Group) Co's annualized ROC % for the quarter that ended in Dec. 2023 was 4.76%. SINOPEC Engineering (Group) Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 54.44%.

SINOPEC Engineering (Group) Co Operating Income Historical Data

The historical data trend for SINOPEC Engineering (Group) Co's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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SINOPEC Engineering (Group) Co Operating Income Chart

SINOPEC Engineering (Group) Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Operating Income

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2,010.82

2,450.35

1,931.08

1,722.58

1,898.32

SINOPEC Engineering (Group) Co Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
Operating Income	Get a 7-Day Free Trial															556.94	1,226.23	554.39	836.06	1,062.26

SINOPEC Engineering (Group) Co Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the semi-annually data reported by the company within the most recent 12 months, which was HK$1,898 Mil.

SINOPEC Engineering (Group) Co (HKSE:02386) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

SINOPEC Engineering (Group) Co's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	2124.526 * ( 1 - 19.5% )	/	( (34961.06	+	36849.192)	/ 2 )
=	1710.24343	/	35905.126
=	4.76 %

where

	Invested Capital		(Q: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	84328.306	-	24324.996	-	( 25042.25	-	max(0, 48721.576	-	75482.926	+	25042.25	))
=	34961.06

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	88560.729	-	24811.928	-	( 27212.262	-	max(0, 52467.211	-	79366.82	+	27212.262	))
=	36849.192

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

SINOPEC Engineering (Group) Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Dec. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2023		Q: Dec. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	2854.748	/	( ( (5044.036 + max(-37544.118, 0))	+	(5443.851 + max(-48004.781, 0)) )	/	2 )
=	2854.748	/	( ( 5044.036	+	5443.851 )	/	2 )
=	2854.748	/	5243.9435
=	54.44 %

where Working Capital is:

	Working Capital		(Q: Jun. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(3059.396	+	906.974	+	6996.7)	-	(24324.996	+	0	+	24182.192)
=	-37544.118

	Working Capital		(Q: Dec. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(3716.175	+	517.198	+	98.871000000014)	-	(24811.928	+	0	+	27525.097)
=	-48004.781

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

SINOPEC Engineering (Group) Co's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	1062.263	/	34334.792
	=	3.09 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

SINOPEC Engineering (Group) Co Operating Income Related Terms

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SINOPEC Engineering (Group) Co (HKSE:02386) Business Description

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GURUFOCUS.COM » STOCK LIST » Industrials » Construction » SINOPEC Engineering (Group) Co Ltd (HKSE:02386) » Definitions » Operating Income

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SENGF:USA

Address

Shenggu Middle Road, No. 8 Building, Shenggu Home, Chaoyang District, Beijing, CHN, 100029

Website

http://www.segroup.cn

SINOPEC Engineering (Group) Co Ltd is a wholly owned subsidiary of the Sinopec Group, a Chinese company. The group provides integrated engineering services and technical patents for domestic and international refining and chemical engineering businesses. The group mainly contains four segments: engineering, consulting and licensing; engineering, procurement and construction (EPC) contracting; construction; and equipment manufacturing. The company generates most of its revenue from the EPC contracting segment. Geographically, the business presence of the group is primarily seen in China, Malaysia, Kuwait, and Saudi Arabia.

Executives

Fmr Llc	2201 Interest of corporation controlled by you
Fidelity Investment Trust	2101 Beneficial owner
Fil Limited	2201 Interest of corporation controlled by you
Pandanus Associates Inc.	2201 Interest of corporation controlled by you
Pandanus Partners L.p.	2201 Interest of corporation controlled by you
Brown Brothers Harriman & Co.	2502 Approved lending agent
Blackrock, Inc.	2201 Interest of corporation controlled by you

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