Business Summary:

PetroChina is principally engaged in (i) the exploration, development, production, transportation and marketing of crude oil and natural gas, and new energy business; (ii) the refining of crude oil and petroleum products, production and marketing of primary petrochemical products, derivative petrochemical products and other chemical products, and new materials business; (iii) the marketing of refined products and non-oil products, and trading business; and (iv) the transportation and the sale of natural gas business. The stock is also listed on the Shanghai Stock Exchange, as code of 601857.SS

Financial Summary:

Earnings hit a record high of RMB164.684 billion for the year 2024 ended December, 31, making a year-to-year growth of 2%. It also declared a final dividend of RMB0.25 per share.

Net profit for the first quarter ended March 31, 2025, was RMB 46.809 billion, up 2.3% year-on-year. During the period, operating income was RMB753.11 billion, down 7.3% year-on-year, mainly owing to reduced market demand, reduced sales of refined oil products and lower prices of some products. The average realized price of the group’s crude oil was US$70 per barrel, down 7.2% while the average domestic natural gas sales price was US$9.01 per thousand cubic feet, down 3.9%.

The Group achieved oil and gas production of 47 million barrels, an increase of 0.7%, of which domestic oil and gas equivalent production was 420 million barrels, an increase of 1.2%; overseas oil and gas production was 48.9 million barrels, a decrease of 3.4%.  

Risk:

1. Oil price fluctuations: As an oil extraction company, the group earnings are directly affected by international crude oil prices. Fluctuations in oil prices may cause a company’s profits to decrease or increase significantly. 
2. Natural gas price cuts: China’s natural gas prices are regulated by the government and may be reduced prematurely, which will have an impact on the company’s profits.
3. SOE Reform: As a state-owned enterprise, the pace of reform of Petrochina may affect its business model and efficiency, and thus affect the profitability.
4. Geopolitical risks: the group has extensive overseas business, and geopolitical conflicts and policy changes may have an impact on the operation of overseas assets.

Technical Analysis:

The stock price hit monthly high of $6.7; partially owing to $0.25 dividend factor on 17 Jun, 2025 and the capital inflow for this high-dividend stock of a relatively lower price. Note that 52 week-high was $8.36. It is suggested to accumulate the share between the present price and $6.3. The target price for medium term is $7.5 respectively. Cut-loss price will be $5.9.

References

www.hkex.com.hk 

www.etnet.com.hk

www.petrochina.com.cn

I, Gary Tam, am a licensed person under the Securities and Futures Commission. Until the date this commentary was published, neither I and/or my affiliates are the beneficiary of the securities mentioned herein or are entitled to any financial interests in relation thereto.