MS: SINOPEC(0386.HK) TP HK$9.70

MS Starts Sinopec At Equal-Weight;HK$9.70 Target2007-6-15 10:59:00 a.m. HKT, DJN

STOCK CALL: Morgan Stanley starts coverage of Sinopec (0386.HK) with Equal-Weight rating and 12-month DCF-based target price of HK$9.70. Says support for share price in near term will come from its undemanding valuation and improvement in operating environment; but adds, "long-term prospects remain uncertain given its high gearing and dependence on government policy." Notes stock trading at FY07 P/E of 11X and EV/EBITDA of 6.5X, which at high end of historical range. Stock +1.5% at HK$8.66.