Privatization of ZRCC by Sinopec Corp.

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Privatization of ZRCC by Sinopec Corp.
China Petroleum Chemical Corporation 14
November 2005
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Disclaimer
This presentation and the presentation materials
distributed herewith include forward-looking
statements. All statements, other than statements
of historical facts, that address activities,
events or developments that Sinopec Corp. expects
or anticipates will or may occur in the future
(including but not limited to projections,
targets, estimates and business plans) are
forward-looking statements. Sinopec Corp.'s
actual results or developments may differ
materially from those indicated by these
forward-looking statements as a result of various
factors and uncertainties, including but not
limited to price fluctuations, actual demand,
exchange rate fluctuations, market shares,
competition, environmental risks, changes in
legal, financial and regulatory frameworks,
international economic and financial market
conditions, political risks, project delay,
project approval, cost estimates and other risks
and factors beyond our control. In addition,
Sinopec Corp. makes the forward-looking
statements referred to herein as of today and
undertakes no obligation to update these
statements. Financial figures in this
presentation are based on International Financial
Reporting Standards.
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Transaction Overview
Proposed Transaction
Privatization of ZRCC by Sinopec Corp. through
Ningbo Yonglian
Cancellation Price and Form of Payment
Cash payment of HK10.60 per H share of ZRCC,
total consideration for the H shares
approximately HK7,672 million

• Include but not limited to
• Approval by shareholders and independent
  shareholders of ZRCC
• Approval by relevant regulatory authorities

Conditions Precedent
Financial Adviser to Sinopec Corp.
China International Capital Corporation (Hong
Kong) Limited
Financial Adviser to ZRCC
Lehman Brothers Asia Investment Limited
Independent Financial Adviser to ZRCC
N M Rothschild China Holding AG
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Business Overview of ZRCC
000 Tonnes
USD/Barrel
RMB/Tonnes
SourceAnnual/Interim Report of ZRCC
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Financial Highlights of ZRCC
1H2005
2004
1H2004
2003
Change ()
Change ()
(RMB,Million)
Note2004 interim results and 2005 interim
results are unaudited
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Strategic Rationale for Transaction

• Integration of ZRCCs oil refining business into
  Sinopec Corps value chain
• Synergy effects in capital allocation,
  investment, branding, resources, marketing,
  distribution channels, etc.
• Elimination of related party transactions and of
  intra-group competition
• Consolidation and simplification of management
  structure and efficiency improvement

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Transaction Procedures

• Key Events
• 12 November 2005, boards of Sinopec Corp. and
  ZRCC approved the transaction
• Mid January 2006, shareholders and independent
  shareholders meetings will be held to seek
  approval for the transaction
• After approval by relevant regulatory
  authorities, ZRCC will apply for delisting and
  deregistration, and pay the consideration to its
  H share shareholders

Sinopec Corp.
Issue New Registered Capital
100
71.3
H Shareholders
H
???
UNIPEC
28.7
Cash Cancellation Price
90
10
Merged into
ZRCC
Ningbo Yonglian
Cash/new registered capital flow
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Pricing Principle and Methodology
Based on principle of fairness for a win-win
transaction
Principle
Applied various commonly adopted valuation
methods in capital markets
Methodology
Based on opinions from financial advisors,
pricing principle, methodology and cancellation
price were substantially discussed and negotiated
at arms length between both parties before final
agreement was reached
Procedure
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Cancellation Price
Cancellation Price to H share shareholders of
ZRCC at HKD10.60 per Share

• Implied Multiples

• Premium of proposed Cancellation Price over
  historical trading prices of ZRCC H shares

• This transaction meets Sinopecs investment
  criteria and is proposed to be included in the
  2006 investment arrangement

SourceZRCC 2004 Annual Report All periods
stated above refer to the period up to and
including 2 November 2005
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Conclusion

• This transaction is consistent with the corporate
  strategy of Sinopec Corp.
• Cancellation Price is fair to shareholders of
  both parties
• Upon completion of the Merger, Sinopec Corp. will
  further realize synergies in investment,
  management and resources allocation, and enhance
  overall operating efficiency

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For Further Information
http//www.sinopec.com
Investor Relations Beijing Tel [phone]
Fax [phone] Email ir_at_sinopec.com Hong
Kong Tel [phone] Fax (852)
28243669 Email ir_at_sinopechk.com New York Tel
[phone] Fax [phone] Email
fangzq_at_sinopecusa.com
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64990093 Email media_at_sinopec.com