China Petroleum & Chemical Corp. (600028), Asia's biggest refiner, posted its lowest half-yearly profit since 2008 after the sale of fuels at state-controlled prices reduced earnings.

Net income fell 41 percent to 24.5 billion yuan ($3.9 billion) from 41.17 billion yuan a year earlier, the Beijing- based company known as Sinopec said in an exchange filing today. The result beat a median estimate of seven analysts compiled by Bloomberg that called for a profit of 22.9 billion yuan.

The profit slide follows lower earnings for PetroChina Co. (857), China's biggest oil and gas producer, which expects fuel-pricing reforms in the second half to help cut losses from refining. Sinopec and parent China Petrochemical Corp. have announced more than $40 billion in deals to acquire assets globally since 2009 to build up oil and gas output and diversify from refining.

"Sinopec somehow did a nice job in cost control because they can process less-expensive, low-grade crude in many refineries," said Gordon Kwan, Hong Kong-based head of energy research at Mirae Asset Securities Ltd. "Further upside in the second half will hinge on the pace of China's domestic fuel- pricing reforms and improvement in its upstream-asset quality. Until then, it is likely Sinopec shares will lag behind rivals PetroChina and Cnooc."

China Petroleum & Chemical Corp. (600028), Asia's biggest refiner, posted its lowest half-yearly profit since 2008 after the sale of fuels at state-controlled prices reduced earnings.

Net income fell 41 percent to 24.5 billion yuan ($3.9 billion) from 41.17 billion yuan a year earlier, the Beijing- based company known as Sinopec said in an exchange filing today. The result beat a median estimate of seven analysts compiled by Bloomberg that called for a profit of 22.9 billion yuan.

The profit slide follows lower earnings for PetroChina Co. (857), China's biggest oil and gas producer, which expects fuel-pricing reforms in the second half to help cut losses from refining. Sinopec and parent China Petrochemical Corp. have announced more than $40 billion in deals to acquire assets globally since 2009 to build up oil and gas output and diversify from refining.

"Sinopec somehow did a nice job in cost control because they can process less-expensive, low-grade crude in many refineries," said Gordon Kwan, Hong Kong-based head of energy research at Mirae Asset Securities Ltd. "Further upside in the second half will hinge on the pace of China's domestic fuel- pricing reforms and improvement in its upstream-asset quality. Until then, it is likely Sinopec shares will lag behind rivals PetroChina and Cnooc."