Investment Summary
Performance of the company`s four main businesses was not optimistic, with big risk of downward performance in H1 2012.
Global economic recovery and geopolitical crisis will drive long-term hikes of international oil prices, which is favorable for the company`s upstream exploration business, thus ensuring continuous rise of the corporate overall performance.
The expected delay of pricing reform for the domestic natural gas can hardly improve loss-making situation of the corporate natural gas business for a while. However, with the natural gas consumption expansion, natural gas price rise and pricing reform kickoff, natural gas business will become the company`s main profit growth sector.
The rise of Special oil income threshold will benefit the corporate 2012 year-round performance. Compared with its peers, Petro China benefits most.
We adjust the company`s EPS to HKD0.88 in 2012, and down-regulate the 6-month target price to HKD10.57. In combination with its dividend HKD0.44 per share, 6-month integrated yield of the company is predicted to be 17.28%,“accumulate” rating still to be maintained.
Financial Predications
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