SHI - Sinopec Shanghai: All Eyes On Earnings Recovery And Dividends

• Sinopec Shanghai's share price performed very well in early-September as it was likely the subject of short-term speculative activity which I think will not be sustained.
• Sinopec Shanghai's Q2 2021 results were poor given a major maintenance exercise, but the company should see an earnings recovery in subsequent quarters as the overhaul has been completed.
• The stock offers appealing consensus forward dividend yields of 8.9% and 9.2% for the current fiscal year and the next fiscal year, respectively.
• Sinopec Shanghai trades at consensus forward FY 2021 and FY 2022 normalized P/E multiples of 6.3 times and 5.8 times, respectively which I think are fair.

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