China Aviation: The merger of the parent company with Sinopec Corp. is expected to have no impact on the business | Lianhe Zaobao

China Aviation Oil (Singapore) listed on the main board of the Singapore Exchange responded to shareholder inquiries, stating that the restructuring of its controlling shareholder, China Aviation Oil Group, with another major local oil company, Sinopec, is being conducted at the parent company level and is not expected to have a significant impact on the company's and its subsidiaries' daily business operations. The company issued a statement on Monday (April 20) on the Singapore Exchange, addressing questions raised by shareholders and the Singapore Investor Association (SIAS) regarding the upcoming 32nd Annual General Meeting scheduled for April 23. Regarding the progress of the restructuring, the company noted that the relevant parties are currently advancing the approval and filing procedures as required. The company will continue to monitor the situation and fulfill its information disclosure obligations at the appropriate time. China Aviation Oil (Singapore) was informed by its parent company on January 8 this year that, after consideration by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and approval from the Beijing authorities, PetroChina and China Aviation Oil Group will implement a restructuring. At that time, market news indicated that if the merger is successful, Sinopec is expected to absorb all assets and businesses of China Aviation. In terms of business performance, the company pointed out that despite the escalating geopolitical tensions in the Middle East, which have caused fluctuations in oil supply and prices, the group currently expects that the related conflicts will not have a substantial impact on overall business. This is mainly because the company's direct business exposure in the Middle East is limited, while the fundamentals of the core Chinese market remain robust, and its diversified layout in Asia, Europe, and America helps to mitigate risks. The company also noted that as the largest physical aviation fuel buyer and an important midstream supplier in the Asia-Pacific region, it has the ability to pass cost changes downstream, thereby enhancing business resilience. Further Reading China Aviation Oil's parent company will restructure with Sinopec China Aviation Oil's net profit in the second half of last year increased by 68.3% year-on-year to 76.46 million yuan Regarding the performance for the fiscal year 2025, the company revealed that the annual net profit reached USD 110.6 million (approximately SGD 140 million), a year-on-year increase of 41.69%, mainly driven by the continued recovery of the global and Chinese civil aviation industries, strong performance from joint ventures, and the gradual contribution of sustainable aviation fuel (SAF) business. Looking ahead, the company believes that as the global aviation industry recovers and passenger traffic in China rebounds, the demand for aviation fuel will continue to grow. At the same time, the company will also regard sustainable aviation fuel as an important growth engine, actively expanding related supply chains and market layouts. China Aviation Oil is one of the major shareholders of Shanghai Pudong International Airport Aviation Fuel Co., Ltd. The company pointed out that, given the status of Shanghai Pudong International Airport as an international aviation hub, as well as the potential benefits brought by the continued recovery and rapid growth of the Chinese civil aviation industry, it remains "cautiously optimistic" about the overall outlook for 2026. In terms of capital management, the company reiterated its policy of distributing 30% of net profit as dividends, while maintaining flexibility in a turbulent market environment with ample cash and zero interest-bearing debt, and seizing potential investment opportunities. China Aviation Oil (Singapore) closed at SGD 2.08 on Monday, down 1.42%