Financial Performance - The total revenue for 2024 is reported at RMB 2,937,981 million, a decrease of 2.5% compared to RMB 3,240,951 million in 2022[7]. - Net profit attributable to shareholders for 2024 is RMB 164,684 million, reflecting a 2.0% increase from RMB 148,888 million in 2022[7]. - The net cash flow from operating activities for 2024 is RMB 406,532 million, down 11.0% from RMB 393,246 million in 2022[7]. - Basic earnings per share for 2024 is RMB 0.90, up 2.0% from RMB 0.81 in 2022[7]. - The weighted average return on equity for 2024 is 10.9%, a decrease of 0.2 percentage points from the previous year[7]. - The company's net profit for 2024 was RMB 183.76 billion, an increase of 1.8% from RMB 180.56 billion in the previous year[54]. - The operating profit for 2024 was RMB 233,954 million, slightly decreased from RMB 235,862 million in 2023[109]. - The net profit attributable to shareholders was RMB 164.68 billion, a 2.0% increase from RMB 161.42 billion in the previous year[47]. - The company reported a pre-tax profit of RMB 241,508 million, an increase from RMB 237,881 million in 2023[109]. - The income tax expense for 2024 was RMB 57,753 million, slightly higher than RMB 57,318 million in 2023, indicating a year-over-year increase of 0.76%[114]. Assets and Liabilities - Total assets at the end of 2024 amount to RMB 2,752,751 million, a slight decrease of 0.2% from RMB 2,676,845 million in 2022[7]. - The total liabilities decreased by 7.2% to RMB 1,043.128 billion from RMB 1,123.679 billion year-on-year[63]. - The debt-to-asset ratio improved to 37.89% at the end of 2024, down from 40.72% at the end of 2023[27]. - The total amount of current liabilities was RMB 637,317 million in 2024, down from RMB 690,597 million in 2023, a decrease of 7.7%[123]. - The total liabilities decreased to RMB 1,043,144 million in 2024 from RMB 1,123,693 million in 2023, a reduction of 7.1%[123]. - The total equity attributable to shareholders of the parent company rose to RMB 1,515,132 million in 2024 from RMB 1,451,086 million in 2023, an increase of 4.41%[110]. Production and Sales - Domestic crude oil production reached 777.0 million barrels, a 0.4% increase from 773.7 million barrels in the previous year[33]. - The company reported a sales volume of natural gas at 4,956.8 billion cubic feet, up 4.6% from 4,739.0 billion cubic feet in the previous year[33]. - The overseas oil production was 164.8 million barrels, a 0.8% increase from 163.4 million barrels in the previous year[34]. - The company sold 5,133.8 billion cubic feet of marketable natural gas, up 4.1% from 4,932.4 billion cubic feet year-on-year[35]. - The total oil and gas equivalent production was 1,797.4 million barrels, reflecting a 2.2% increase from 1,759.2 million barrels in the previous year[35]. - The company’s total revenue from oil and gas and new energy reached RMB 884,057 million, with a gross margin of 26.2%[84]. - The oil and gas segment achieved operating revenue of RMB 906.81 billion in 2024, up 1.3% from RMB 894.85 billion in 2023, driven by increased sales volumes of crude oil and natural gas[55]. Dividends and Shareholder Information - The proposed final dividend for 2024 is RMB 0.25 per share, totaling approximately RMB 45.755 billion[6]. - As of December 31, 2024, the total number of shareholders was 491,311, with 486,082 domestic A-share shareholders and 5,229 overseas H-share shareholders[11]. - The largest shareholder, China Petroleum Group, holds 82.46% of the total shares, amounting to 150,923,565,570 shares[13]. - The company reported a mid-term dividend distribution of RMB 40,265 million for 2024 and a proposed final dividend of RMB 45,755 million, compared to a total of RMB 80,529 million in 2023[117]. Capital Expenditures and Investments - Capital expenditures for 2024 amount to RMB 275.85 billion, a slight increase of 0.2% from RMB 275.39 billion in 2023[71]. - The oil and gas and new energy segment's capital expenditure for 2024 is RMB 227.63 billion, accounting for 82.52% of total capital expenditures[72]. - The refining and chemical segment's capital expenditure for 2024 is RMB 33.49 billion, primarily for upgrading projects at Jilin Petrochemical and Guangxi Petrochemical[75]. - The company plans to continue expanding its market presence in the oil and gas sector, focusing on new technologies and product development[121]. Future Outlook and Strategy - The company plans to increase its crude oil production to 936.2 million barrels and natural gas sales to 5,341.0 billion cubic feet by 2025[80]. - The company anticipates a stable GDP growth of around 5.0% in China for 2025, with continued demand growth in the natural gas market[79]. - The company aims to enhance exploration efficiency and resource replacement rates in its oil and gas operations, focusing on unconventional resources[80]. - The company plans to process 1,330.9 million barrels of crude oil by 2025[82]. Operational Efficiency - The company maintained a free cash flow of RMB 104.35 billion, remaining above RMB 100 billion[30]. - The company's net interest expense decreased by 24.4% to RMB 11.93 billion in 2024, down from RMB 15.78 billion in the previous year, due to a reduction in interest-bearing debt[54]. - Operating expenses for 2024 were RMB 270.40 billion, a decrease of 2.6% from RMB 277.70 billion in the previous year, with procurement and service costs down by 1.7%[51]. Market Conditions and Regulatory Environment - The Chinese government announced a reduction in the export tax rebate rate for gasoline and diesel from 13% to 9%, effective December 1, 2024[98]. - The National Development and Reform Commission released the updated list of encouraged industries in the western region, effective January 1, 2025, including new technologies for gasoline and diesel production[99].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 7.03, indicating a potential upside of 26.6% from the current price of HKD 5.55 [2][4]. Core Insights - The company's performance met expectations, with significant growth in the natural gas business, despite a decline in oil sales revenue due to fluctuating oil prices [2][4]. - The oil and new energy segments showed a year-on-year production increase of 2.1%, with total oil equivalent production reaching 1443 million barrels [2][4]. - The refining segment experienced a profit decrease, while the chemical segment showed profit growth, indicating a mixed performance across different business units [2][4]. Financial Performance Summary - For the first three quarters of 2024, the company reported revenue of RMB 702.41 billion, a decrease of 5.3% year-on-year, and a net profit of RMB 132.52 billion, an increase of 0.7% year-on-year [2][4]. - The average crude oil price for the first three quarters was USD 76.88 per barrel, with natural gas sales volume reaching 1629.6 billion cubic meters, reflecting a 30% increase in operating profit for the natural gas segment [2][4]. - The company’s refining throughput was 1036.2 million barrels, with gasoline production decreasing by 2.7% to 8990 million tons, while kerosene production saw a significant increase [2][4]. Revenue and Profitability Forecast - The forecasted revenues for 2024-2026 are RMB 3.10 trillion, RMB 3.11 trillion, and RMB 3.16 trillion respectively, with net profits projected at RMB 180.1 billion and RMB 186.0 billion for the same period [2][4]. - The report anticipates a net profit growth rate of 7 times PE for the years 2024-2026, supporting the bullish outlook on the company's stock [2][4].

Financial Performance - The total revenue for the reporting period was RMB 1,553,869 million, representing a 5.0% increase compared to RMB 1,479,871 million in the same period last year[11]. - The net profit attributable to shareholders of the parent company was RMB 88,607 million, up 3.9% from RMB 85,276 million year-on-year[11]. - The basic earnings per share for the reporting period was RMB 0.48, reflecting a 3.9% increase from RMB 0.47 in the same period last year[11]. - The company achieved a gross profit of RMB 1,249.29 billion, up 3.6% from RMB 1,206.17 billion year-on-year[45]. - The operating profit for the first half of 2024 reached RMB 105.03 billion, a 5.9% increase from RMB 99.25 billion in the same period last year, driven by rising crude oil prices and increased natural gas sales[46]. - The net profit for the first half of 2024 was RMB 99.61 billion, a 5.3% increase from RMB 94.58 billion year-on-year[46]. - The total comprehensive income for the six months ended June 30, 2024, was RMB 83,393 million, a decrease from RMB 86,385 million in the same period last year, indicating a decline of about 3.4%[116]. Cash Flow and Investments - The net cash flow from operating activities was RMB 217,329 million, a decrease of 2.0% from RMB 221,706 million in the previous year[11]. - The net cash flow used in investing activities increased by 17.5% to RMB 140.29 billion from RMB 119.41 billion year-on-year[54]. - The net cash flow used in financing activities rose significantly by 69.0% to RMB 133.01 billion from RMB 78.69 billion in the previous year[55]. - The capital expenditure for the first half of 2024 was RMB 78.94 billion, a decrease of 7.3% from RMB 85.14 billion in the same period last year, with a full-year forecast of RMB 258.00 billion[59]. - The total cash outflow from investing activities was RMB 172,778 million, compared to RMB 149,756 million in the same period last year, reflecting an increase of approximately 15.4%[115]. - The cash inflow from financing activities totaled RMB 288,192 million, down from RMB 345,321 million in the same period last year, representing a decrease of approximately 16.5%[115]. Assets and Liabilities - The total assets at the end of the reporting period were RMB 2,768,297 million, a 0.6% increase from RMB 2,752,710 million at the end of the previous year[11]. - The total liabilities decreased by 2.8% to RMB 1,090.13 billion from RMB 1,122.08 billion at the end of 2023[51]. - The company's total equity attributable to shareholders increased to RMB 1,489,904 million as of June 30, 2024, from RMB 1,446,410 million at the end of 2023, reflecting a growth of approximately 3%[112]. - The company's debt-to-asset ratio improved to 39.38% as of June 30, 2024, down from 40.76% at the end of 2023[109]. Shareholder Information - The company declared an interim dividend of RMB 0.22 per share, amounting to approximately RMB 402.65 million based on the total share capital as of June 30, 2024[10]. - The largest shareholder, China National Petroleum Corporation, holds 150,923,565,570 shares, representing 82.46% of the total shares[17]. - The company has a cash dividend policy that mandates a minimum distribution of 30% of the net profit attributable to shareholders of the parent company, provided cash flow supports it[71]. Operational Highlights - In the first half of 2024, the company's crude oil production reached 474.8 million barrels, a 0.1% increase from 474.3 million barrels in the same period last year[32]. - The company achieved a sales volume of natural gas of 2,584.2 billion cubic feet, up 2.7% from 2,517.1 billion cubic feet year-on-year[32]. - The total oil and gas equivalent production was 905.5 million barrels, reflecting a 1.3% increase from 893.8 million barrels in the previous year[32]. - The company reported a significant increase in wind and solar power generation, reaching 2.17 billion kilowatt-hours, a 154.5% increase from 850 million kilowatt-hours in the same period last year[33]. Environmental and Social Responsibility - The company has implemented a three-step strategy focusing on "clean alternatives, strategic replacements, and green transformation" to reduce carbon emissions and enhance energy efficiency[92]. - The company has maintained a strong commitment to environmental protection, with no significant environmental pollution incidents reported during the period[92]. - The company has actively engaged in rural revitalization initiatives, including the "Happy Village" project to improve living conditions in rural areas[93]. Regulatory and Compliance - The financial statements were prepared in accordance with the accounting standards set by the Ministry of Finance of China, ensuring compliance and transparency[120]. - The company has maintained compliance with corporate governance standards and has not encountered any insider trading violations[71]. - The company is subject to various regulatory risks, including changes in government policies regarding exploration and production licenses, special taxes, and environmental standards[98]. Future Outlook - The company expects moderate global economic growth in the second half of 2024, with domestic demand for natural gas continuing to grow rapidly[68]. - The company plans to increase investment in unconventional resources and clean energy projects, with a focus on enhancing exploration and development capabilities[61]. - The company aims to enhance its market share and operational capabilities in both domestic and international markets[47].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 8.07, indicating a potential upside of 36.1% from the current price of HKD 5.93 [1]. Core Insights - The company achieved a record high in interim dividends, with a cash dividend payout ratio of 45% [1]. - The natural gas business is experiencing rapid growth, contributing to revenue and profit increases [1]. - The oil and gas segment reported revenue of RMB 4,497 billion, a year-on-year increase of 5.9%, while the chemical segment turned a profit of RMB 3.126 billion, recovering from a loss in the previous year [1]. - The company is focusing on green transformation through acquisitions, such as the 100% stake in CNOOC Power [1]. Financial Performance Summary - For the first half of 2024, the company reported revenue of RMB 1,553.9 billion, a decrease of 5% year-on-year, and a net profit of RMB 88.6 billion, an increase of 3.9% [1]. - The average oil price increased, and domestic natural gas business volume and prices rose, leading to revenue and profit growth [1]. - The company processed 693 million barrels of crude oil, a 3% increase year-on-year, while total oil equivalent production reached 906 million barrels, up 1.3% [1]. - Natural gas sales reached 147.2 billion cubic meters, a 5.8% increase, with revenue from this segment growing by 7.9% [1]. Business Segment Analysis - The refining business faced challenges, with operating profit declining by 43% to RMB 10.5 billion, while the chemical segment saw a turnaround with a profit of RMB 3.126 billion [1]. - The sales of refined oil products decreased by 2% to 79.05 million tons due to the growth of domestic electric vehicles and extreme weather conditions [1]. - The company is actively reducing international procurement costs in the natural gas sector, anticipating continued growth in the second half of the year [1].

Financial Performance - In the first half of 2024, the company achieved operating revenue of RMB 155.39 billion, a 5.0% increase from RMB 147.99 billion in the same period last year[10]. - Net profit attributable to shareholders was RMB 88.61 billion, up 3.9% from RMB 85.27 billion year-on-year[10]. - The company’s operating profit reached RMB 91.66 billion, reflecting a 7.2% increase compared to RMB 85.52 billion in the previous year[17]. - The total operating expenses amounted to RMB 1,428,940 million, up from RMB 1,359,254 million in the previous year, reflecting a year-on-year increase of approximately 5.1%[67]. - The total profit for the first half of 2024 was RMB 129.14 billion, compared to RMB 121.75 billion for the same period in 2023, reflecting a year-on-year increase of 6.5%[97]. - The net profit for the period was RMB 99,614 million, representing a growth of 5.4% from RMB 94,579 million in the same period last year[67]. - The company's basic earnings per share for the first half of 2024 was RMB 0.48, compared to RMB 0.47 in the same period of 2023[97]. - The company reported a pre-tax profit of RMB 129,139 million, an increase from RMB 121,755 million in the previous year, indicating a growth of approximately 6.1%[67]. Assets and Liabilities - The total assets of the company amounted to RMB 2768.04 billion, a 0.6% increase from RMB 2752.45 billion at the end of the previous year[21]. - Total liabilities decreased by 2.8% to RMB 1090.13 billion from RMB 1122.08 billion at the end of the previous year[22]. - The company's cash and cash equivalents as of June 30, 2024, were RMB 192.10 billion, down from RMB 249.00 billion at the end of 2023[50]. - The total liabilities as of June 30, 2024, were RMB 1,090,144 million, down from RMB 1,122,089 million as of December 31, 2023[78]. - The equity attributable to shareholders of the parent company increased to RMB 1,489,904 million from RMB 1,446,410 million[78]. - The company's current assets totaled RMB 672,371 million, an increase from RMB 658,520 million in the previous period[68]. Capital Expenditure and Investments - Capital expenditure for the oil and gas and new energy division was RMB 67.41 billion, primarily focused on key basins in China and unconventional resource development[27]. - The company plans to allocate RMB 6.00 billion for capital expenditure in the natural gas sales division for the full year of 2024[29]. - The company plans to allocate RMB 3.00 billion for capital expenditures in 2024[56]. - The company reported investment income of RMB 1.14 billion for the first half of 2024, down from RMB 6.70 billion in the same period of 2023[97]. Production and Sales - The company achieved a domestic crude oil production of 392.8 million barrels in the first half of 2024, a slight increase of 0.1% from 392.3 million barrels in the previous year[139]. - The company reported a natural gas production of 2,486.8 billion cubic feet, reflecting a 2.9% increase from 2,417.3 billion cubic feet year-on-year[139]. - The total oil and gas equivalent production reached 905.5 million barrels, up 1.3% from 893.8 million barrels in the previous year[141]. - The company processed 693.3 million barrels of crude oil, a 3.0% increase from 673.0 million barrels in the previous year, and produced 60.12 million tons of refined oil, up 2.1% from 58.86 million tons[186]. - The company achieved a natural gas sales volume of 1,472.17 billion cubic meters, representing a 12.9% increase compared to 1,303.52 billion cubic meters in the previous year[165]. - The company's total sales of gasoline, kerosene, and diesel amounted to 79,053 thousand tons, a decrease of 2.0% from 80,668 thousand tons in the previous year[164]. Research and Development - The company reported a significant increase in research revenue, contributing to the growth in the main business income[33]. - The company's research and development expenses for the first half of 2024 were RMB 9.66 million, slightly up from RMB 9.65 million in the same period last year[97]. - Research and development expenses remained stable at RMB 9,657 million, slightly up from RMB 9,651 million year-over-year[88]. - The company is actively developing new chemical products and materials, establishing a new subsidiary focused on advanced materials[186]. Market and Strategic Initiatives - The company aims to enhance the production of high-end, high-value-added refining products and new chemical materials, while optimizing production processes and product structures[45]. - The company is focusing on market expansion strategies, including enhancing online trading and developing new customer segments in the natural gas sales business[58]. - The company is actively participating in the development of hydrogen energy and geothermal heating markets, as well as advancing CCUS-EOR demonstration projects[57]. - The company is enhancing its marketing network and service capabilities, focusing on green and low-carbon transformation initiatives, including the expansion of integrated energy stations[187]. Dividends and Shareholder Returns - The company declared an interim dividend of RMB 40,265 million for the first half of 2024, compared to no dividend in the same period of 2023[72]. - The company plans to distribute an interim dividend of RMB 0.22 per share, amounting to approximately RMB 40.27 billion based on the total share capital as of June 30, 2024[109].

Investment Rating - The report assigns a "Buy" rating for the company [1]. Core Views - The company is positioned as a leading integrated oil and gas operator in China, benefiting from a comprehensive upstream and downstream operational structure, which enhances its risk resilience and profitability [1][7]. - The company is expected to maintain stable revenue growth in its oil and gas and new energy segments, with projected revenues of 1,732 billion, 1,895 billion, and 2,001 billion RMB for 2024-2026, reflecting year-on-year increases of 7%, 9%, and 6% respectively [1][7]. - The target price for the company's stock is set at 10.06 HKD, indicating a potential upside of 19.3% from the current price [1]. Summary by Sections Company Overview - The company, known as China National Petroleum Corporation (CNPC), is the largest oil and gas producer and seller in China and ranks third among the world's top oil companies [3][7]. - Its main business segments include oil and gas exploration, production, transportation, sales, refining, and new energy [3][7]. Financial Performance - In 2023, the company reported total revenues of 30,110.12 billion RMB, a decrease of 7.04% year-on-year, while net profit attributable to shareholders increased by 8.34% to 1,611.46 billion RMB [7]. - The company's oil and gas production reached 1,759.2 million barrels in 2023, a year-on-year increase of 4.4% [17]. Oil and Gas Segment - The company's oil and gas exploration and production revenues are highly correlated with international oil prices, which are expected to remain elevated due to ongoing global economic recovery and seasonal demand [1][27]. - The company has a robust resource base, with proven oil and gas reserves totaling 18,352 million barrels as of 2023 [26]. Natural Gas Business - The company is actively developing unconventional natural gas resources and has introduced foreign resources to enhance supply channels [66]. - The natural gas sales volume reached 2,198 billion cubic meters in 2023, reflecting a year-on-year growth of 6% [66]. Refining and Chemical Segment - The refining and chemical segment is expected to see improved profitability due to a recovery in product prices and stable demand for refined products [42]. - The company processed 1,399 million barrels of crude oil in 2023, marking a 15.3% increase from the previous year [41]. Sales and Marketing - The company has expanded its marketing efforts, resulting in a significant increase in sales volumes for gasoline, kerosene, and diesel, which totaled 166 million tons in 2023, a 10.1% increase year-on-year [73]. - The company operates approximately 22,800 gas stations, accounting for 20% of the national total, which supports its integrated operational strategy [72].

Financial Performance - Operating revenue for the first quarter reached RMB 812,184 million, an increase of 10.9% compared to RMB 732,471 million in the same period last year[11] - Net profit attributable to shareholders of the parent company was RMB 45,683 million, reflecting a growth of 4.7% from RMB 43,624 million year-on-year[11] - Basic and diluted earnings per share were both RMB 0.25, up 4.7% from RMB 0.24 in the previous year[11] - The company reported a total comprehensive income of RMB 49,020 million for the first quarter of 2024, compared to RMB 44,962 million in the same period of 2023, representing an increase of about 9.1%[42] - Net profit for the same period was RMB 51,283 million, up 5.8% from RMB 48,503 million year-over-year[58] - Operating profit increased to RMB 64,541 million, compared to RMB 62,396 million in the previous year, reflecting a growth of 3.4%[61] Cash Flow and Assets - Net cash flow from operating activities was RMB 111,077 million, a decrease of 12.1% from RMB 126,382 million at the end of the previous year[11] - Cash received from sales of goods and services was RMB 879,183 million, up 9.7% from RMB 801,094 million year-over-year[45] - Cash and cash equivalents at the end of the period were RMB 232,017 million, down from RMB 242,243 million at the end of the same period last year[45] - The company’s cash and cash equivalents increased significantly to RMB 99,054 million from RMB 62,807 million, marking a growth of approximately 57.7%[36] - The total amount of cash and cash equivalents decreased to RMB 232,017 million from RMB 249,001 million, reflecting cash flow dynamics during the period[65] Production and Sales - The company’s oil and gas equivalent production reached 463.7 million barrels, a 2.6% increase from 452.0 million barrels in the same period last year[21] - Domestic oil and gas equivalent production was 413.0 million barrels, also up 2.6% from 402.6 million barrels year-on-year[21] - Sales of refined oil products amounted to 39,258 thousand tons, a 4.5% increase from 37,575 thousand tons year-over-year[27] - Natural gas sales increased to 83.369 billion cubic meters, a 14.2% rise from 73.008 billion cubic meters year-over-year[26] Assets and Liabilities - Total assets at the end of the reporting period amounted to RMB 2,753,922 million, a slight increase of 0.1% from RMB 2,752,448 million year-on-year[11] - The total liabilities decreased to RMB 677,819 million as of March 31, 2024, from RMB 689,466 million at the end of 2023, a reduction of about 1.0%[39] - The total equity attributable to shareholders of the parent company rose to RMB 1,326,339 million as of March 31, 2024, compared to RMB 1,291,608 million at the end of 2023, reflecting an increase of about 2.7%[39] - The total liabilities and equity combined reached RMB 2,004,158 million as of March 31, 2024, compared to RMB 1,981,074 million at the end of 2023, indicating a growth of approximately 1.2%[39] Operational Efficiency - The company continues to focus on innovation, resource optimization, market expansion, and green low-carbon strategies to enhance operational efficiency and financial health[20] - The company aims to enhance market analysis and strengthen sales efforts to improve operational efficiency[26] - Operating profit from oil and gas and new energy businesses was RMB 42.965 billion, a 4.8% increase from RMB 40.996 billion year-on-year, mainly due to increased domestic natural gas sales[21] Research and Development - Research and development expenses for the first quarter of 2024 were RMB 5,998 million, slightly up from RMB 5,934 million in the same period of 2023[42] Other Financial Metrics - The weighted average return on net assets remained stable at 3.1%, unchanged from the previous year[11] - The company processed 353.8 million barrels of crude oil, an 8.2% increase from 326.9 million barrels year-over-year[24] - Operating profit from refining and chemical business was RMB 8.115 billion, a 4.2% decrease from RMB 8.470 billion year-over-year[23] - Operating profit from the chemical business turned around to RMB 1.145 billion from a loss of RMB 0.926 billion year-over-year[23]

Corporate Governance and Board Activities - The Board of Directors' Sustainability Committee held 2 meetings during the reporting period, reviewing the company's 2022 ESG report and health safety environmental report, and forming committee resolutions[1] - The company's Supervisory Committee consists of 8 members, including 4 shareholder representatives and 4 employee representatives. The committee held 5 meetings during the reporting period, reviewing the company's 2022 annual report and quarterly reports for 2023[4] - The Supervisory Committee attended 4 Board meetings and submitted 4 proposals to the shareholders' meetings, providing oversight on the company's financials and the performance of directors and senior management[4][5] - The company held 4 shareholders' meetings in 2023, approving 9 ordinary proposals and 3 special proposals, including the 2022 financial report, profit distribution plan, and board authorization for share repurchase[20][21] - Shareholders holding 10% or more of the company's voting shares can request the Board to convene an extraordinary general meeting, and if the Board does not respond within 10 days, they can request the Supervisory Committee to convene the meeting[14][15] - The company's independent directors attended all shareholders' meetings and did not raise any objections to the resolutions passed[22] - The Board is responsible for preparing the company's annual financial statements in accordance with international financial reporting standards and Chinese accounting standards, ensuring true and fair reporting of the company's status[7] - The Board believes the company has sufficient resources to continue as a going concern in the foreseeable future, and the financial statements are prepared on a going concern basis[8] - Shareholders can submit written inquiries to the Board, and the company provides a Q&A session during shareholders' meetings, with written questionnaires available for shareholders who cannot attend[19] - The company's risk management and internal control details can be found in the "Corporate Governance Improvement" and "Internal Control System Improvement" sections of the annual report[10] - The company's board of supervisors submitted several proposals to the 2023 shareholders' meeting, including the 2022 Supervisory Committee Report and proposals on the appointment of auditors and the election of supervisors[79] - The company's board of supervisors reviewed and approved the company's compliance with laws and regulations, financial status, and environmental, social, and governance (ESG) practices in 2023[81][84] - The company's board of supervisors noted that all related party transactions in 2023 were conducted within approved limits and in compliance with regulatory requirements[83] Executive and Board Compensation - The company's board of directors includes Chairman Dai Houliang, Vice Chairman Hou Qijun, and other key executives, with total pre-tax compensation for 2023 ranging from 597,000 RMB to 1,502,000 RMB for non-independent directors[86] - The company's board of supervisors includes members such as Xie Haibing and Zhao Ying, with total pre-tax compensation for 2023 ranging from 906,000 RMB to 1,389,000 RMB for employee representatives[70] - The company's independent non-executive directors, including Jiang Xiaoming and Xiong Lushan, receive fixed salaries and meeting allowances, with compensation levels set based on market conditions and industry benchmarks[86] - The company's total pre-tax compensation for senior management in 2023 was 1,655 thousand RMB for the Safety Director, 432 thousand RMB for the Vice President and Chief Engineer, and 1,571 thousand RMB for the Vice President (including compensation from January to June as a supervisor and from June to December as Vice President)[97][102][104] - The company's total pre-tax compensation for employee representatives in 2023 was 357 thousand RMB for one supervisor and 1,571 thousand RMB for another (including compensation from January to June as a supervisor and from June to December as Vice President)[97][109] - The company's senior management, including Vice Presidents Zhu Guowen, Wan Jun, Wang Hua, Li Ruxin, He Jiangchuan, and Chief Geologist Jiang Tongwen, received pre-tax remuneration ranging from 867 to 1,597 thousand RMB in 2023[110] Financial Performance and Reporting - Revenue for Q1 2023 was RMB 732.471 billion, Q2 was RMB 747.4 billion, Q3 was RMB 802.264 billion, and Q4 was RMB 728.877 billion[148] - Net profit attributable to shareholders in Q1 2023 was RMB 43.63 billion, Q2 was RMB 41.646 billion, Q3 was RMB 46.375 billion, and Q4 was RMB 29.493 billion[148] - Operating cash flow for Q1 2023 was RMB 126.382 billion, Q2 was RMB 95.324 billion, Q3 was RMB 119.294 billion, and Q4 was RMB 115.596 billion[148] - Non-recurring losses for 2023 totaled RMB 25.986 billion, including RMB 11.325 billion from disposal of non-current assets and RMB 19.238 billion from tax and accounting adjustments[149] - The company proposed a final dividend of RMB 0.23 per share for 2023, totaling approximately RMB 42.095 billion[157] - The company's total share capital as of December 31, 2023, was 183,020,977,818 shares[157] - Revenue for 2023 reached RMB 3,011,012 million, a decrease of 7.0% compared to RMB 3,239,167 million in 2022[171] - Net profit attributable to parent company shareholders in 2023 was RMB 161,146 million, up 8.3% from RMB 148,743 million in 2022[171] - Total assets increased to RMB 2,752,448 million in 2023, up 3.1% from RMB 2,670,400 million in 2022[171] - Capital expenditures in 2023 amounted to RMB 275,338 million, slightly higher than RMB 274,307 million in 2022[171] - Net cash flow from operating activities in 2023 was RMB 456,596 million, a 16.0% increase from RMB 393,768 million in 2022[171] - The company's net profit under International Financial Reporting Standards (IFRS) was RMB 180,293 million, while under Chinese Accounting Standards, it was RMB 180,291 million, with a minimal difference of RMB 0.02 million[175] - The company's return on equity (ROE) for 2023 was 11.1%, up from 10.9% in 2022[171] - The company's total equity increased to RMB 1,630,373 million in 2023, up 6.3% from RMB 1,534,166 million in 2022[171] - Revenue for 2023 decreased by 7.0% to RMB 3,011,012 million compared to 2022[200] - Net profit attributable to parent company shareholders increased by 8.3% to RMB 161,144 million in 2023[200] - Operating cash flow increased by 16.0% to RMB 456,596 million in 2023[200] - Basic earnings per share increased by 8.3% to RMB 0.88 in 2023[200] - Total assets increased by 3.1% to RMB 2,752,710 million at the end of 2023[200] - Equity attributable to parent company shareholders increased by 5.9% to RMB 1,446,410 million at the end of 2023[200] Shareholder Information and Ownership - The company's total number of shareholders as of December 31, 2023, was 479,245, with 473,714 domestic A-share holders and 5,531 overseas H-share holders[178] - China National Petroleum Corporation (CNPC) holds 82.46% of the company's shares, totaling 150,923,565,570 shares, an increase of 3,819,948,462 shares during the reporting period[180] - China National Petroleum Corporation holds 82.46% of the total share capital[186] - BlackRock, Inc. holds 0.80% of the total share capital through H-shares[186] Business Operations and Strategy - The company's main businesses include exploration, production, and sales of crude oil and natural gas, as well as new energy and materials businesses[140] - The company is listed on the Shanghai Stock Exchange (A-share code: 601857) and the Hong Kong Stock Exchange (H-share code: 857)[142] - The company's registered office is located at No. 16 Ande Road, Dongcheng District, Beijing, China[142] - The company's financial reports are audited by PricewaterhouseCoopers Zhong Tian LLP in China and PricewaterhouseCoopers in Hong Kong[142] - The company expects China's GDP growth target to be around 5% in 2024[195] - The company plans to accelerate the development of new energy and new materials businesses in 2024[195] Executive and Board Member Backgrounds - The company's independent non-executive directors, Jiang Xiaoming and Xiong Lushan, have extensive experience in investment management and corporate governance, with Jiang holding a PhD in Economics from the University of Cambridge and Xiong having a background in tax advisory services[66][67] - The company's current Chairman, Dai Houliang, is 60 years old and holds a Ph.D. in Engineering. He has extensive experience in the petroleum industry, including roles at Sinopec and China National Petroleum Corporation (CNPC)[87] - Huang Yongzhang, aged 57, serves as the company's President and is a senior engineer with a Ph.D. He has held various leadership positions within CNPC, including roles in international operations and safety management[87] - Hou Qijun, aged 57, is the Vice Chairman of the company and holds a Ph.D. in Engineering. He has a strong background in oil and gas exploration and production, having served in multiple senior roles within CNPC[87] - Ren Lixin, aged 56, is a Senior Vice President and holds a Ph.D. in Engineering. He has extensive experience in the refining and chemical sectors, having served in various leadership roles within CNPC[87] - Xie Jun, aged 56, is a Director and holds a Ph.D. in Engineering. He has a strong background in natural gas and pipeline operations, having served in multiple senior roles within CNPC[87] - Zhang Daowei, aged 51, is a Senior Vice President and holds a Ph.D. in Engineering. He has extensive experience in oil and gas exploration and production, having served in various leadership roles within CNPC[87] - Cai Jinyong, aged 64, is an Independent Non-Executive Director with a Ph.D. in Economics. He has over 30 years of experience in the financial services industry, including roles at Goldman Sachs and Morgan Stanley[89] - Zhang Laibin, aged 62, is an Independent Non-Executive Director and a professor at China University of Petroleum (Beijing). He holds a Ph.D. and is a member of the Chinese Academy of Engineering[90] - He Jinglin, aged 48, is an Independent Non-Executive Director with a Ph.D. He has extensive experience in the banking and investment sectors, including roles at Macau Tai Fung Bank and Asia Pioneer Entertainment Holdings[91] - The company's executive directors and senior management have a strong background in engineering and petroleum industry, with most holding Ph.D. degrees and having extensive experience in various leadership roles within CNPC[87][89][90][91] - In 2023, the company underwent a board and senior management reshuffle, with several key positions including Executive Director, Chief Geologist, and Independent Non-Executive Directors being replaced due to term limits or age reasons[105] - Shen Fuxiao was appointed as the company's Safety Director in March 2024 and will receive remuneration from the company[111] - He Jiangchuan, Vice President, has been serving as the Executive Director of the Oil, Gas, and New Energy Division since May 2023[113] - Jiang Tongwen, Chief Geologist, has been the General Manager of the Science and Technology Management Department since June 2022[113] - Yang Weisheng, Chief Engineer, has been the Executive Director and President of the Petrochemical Research Institute since June 2022[113] - Shen Fuxiao, Safety Director, also serves as the Deputy Safety Director of China National Petroleum Corporation and General Manager of the Quality, Health, Safety, and Environmental Protection Department[113] - Tian Jinghui resigned as Vice President due to age reasons on January 6, 2023[116] Financial Reporting and Auditing - The company's financial reports for 2023 were prepared in accordance with both Chinese Accounting Standards and International Financial Reporting Standards and were audited by PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers[129] - The company's registered Chinese name is China National Petroleum Corporation, with Dai Houliang as the legal representative[131][132] - The company's contact address is 9 Dongzhimen North Street, Dongcheng District, Beijing, China, with a fax number of 86(10) 6209 9557 and a phone number of 86(10) 5998 2622[133][134][136] Risk Management and Exchange Rate Impact - The company's financial performance is subject to exchange rate risk due to its operations in both RMB and foreign currencies, with potential impacts from fluctuations in the RMB exchange rate[76]

Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for the stock's performance in the next 6 to 12 months [10][36]. Core Insights - The company achieved a revenue of 3,011 billion RMB in 2023, a decrease of 7% year-on-year, while the net profit attributable to shareholders was 161.1 billion RMB, an increase of 8% year-on-year [36]. - Oil and gas production is steadily increasing, with a total production of 1,759 million barrels of oil equivalent in 2023, representing a 4.4% year-on-year growth [37]. - The company plans to increase capital expenditure to 2,580 billion RMB in 2024, focusing on upstream investments [37]. - The company emphasizes shareholder returns, with a total dividend payout of 80.5 billion RMB in 2023, resulting in a dividend yield of 4.3% for A shares and 6.6% for H shares [37]. Summary by Sections 1. Oil Price Outlook - The report suggests a tight balance in oil supply and demand, with expectations for oil prices to remain high due to reduced capital expenditures by international oil companies and OPEC+ production cuts [8][9]. 2. Production and Reserves - The company has a natural gas reserve of approximately 20 trillion cubic meters, significantly higher than its peers, and is expected to increase its natural gas production in the coming years [18][37]. 3. Financial Performance - The company forecasts net profits of 183.7 billion RMB, 190.3 billion RMB, and 194.6 billion RMB for 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 7.37, 7.12, and 6.96 [10][36]. 4. Segment Performance - The oil and gas segment remains the primary source of revenue, with significant contributions from the natural gas and pipeline business, which has been steadily increasing its share of total revenue [44][54]. 5. Capital Expenditure - The company’s actual capital expenditure in 2023 was 2,753 billion RMB, exceeding the planned amount, and it plans to maintain a high level of investment in 2024 [37][53].

Shareholder Information - As of December 31, 2023, the total number of shareholders was 479,245, with domestic A-share shareholders accounting for 473,714 and overseas H-share shareholders for 5,531[1]. - The largest shareholder, China National Petroleum Corporation, holds 82.46% of the shares, equating to 150,923,565,570 shares[2]. - BlackRock, Inc. holds 1,472,617,558 H-shares, representing a significant stake in the company[6]. Financial Performance - The company's operating revenue for 2023 was RMB 3,011.01 billion, down 7.0% from RMB 3,239.17 billion year-on-year, with a decline smaller than the drop in oil prices[19]. - Net profit attributable to shareholders reached RMB 161.15 billion, an increase of 8.3% from RMB 148.74 billion in the previous year, marking a historical high[19]. - Free cash flow for 2023 was RMB 176.12 billion, up 17.1% from RMB 150.42 billion year-on-year, also a historical high[19]. - The company reported a net profit attributable to non-controlling interests of RMB 19.147 billion, a 31.1% increase from RMB 14.605 billion year-on-year[84]. - The company's net profit for 2023 was RMB 180.29 billion, an increase of 10.4% from RMB 163.35 billion in the previous year[109]. - The company achieved operating profit for 2023 of RMB 43.044 billion, an increase of RMB 30.087 billion compared to RMB 12.957 billion in the same period last year, reflecting a significant growth in profitability[143]. Debt and Assets - The company's debt-to-asset ratio improved to 40.76% in 2023 from 42.55% in 2022[15]. - Total assets at the end of 2023 were RMB 2,752.71 billion, representing a 3.1% increase from RMB 2,670.67 billion at the end of 2022[62]. - The company's total liabilities decreased by 1.2% to RMB 1,122.075 billion from RMB 1,136.234 billion at the end of the previous year[94]. - The company's total debt as of December 31, 2023, included fixed-rate loans of RMB 138.029 billion (47.3%) and floating-rate loans of RMB 153.949 billion (52.7%)[150]. - The total equity attributable to shareholders increased by 5.9% to RMB 1,446.163 billion, mainly due to an increase in retained earnings[146]. Production and Sales - Domestic crude oil production was 773.7 million barrels, a 0.8% increase from 767.4 million barrels in the previous year[22]. - The company achieved a total oil and gas equivalent production of 1,759.2 million barrels, a 4.4% increase from 1,685.4 million barrels year-on-year[24]. - The overseas oil production increased by 17.7% to 163.4 million barrels from 138.8 million barrels in the previous year[24]. - The total sales of natural gas reached 4,932.4 billion cubic feet, a 5.5% increase from 4,675.0 billion cubic feet year-on-year[27]. - The company sold 165.80 million tons of gasoline, kerosene, and diesel in 2023, a 10.1% increase from 150.65 million tons in 2022[59]. - Natural gas sales reached 273.548 billion cubic meters, up 5.1% from 260.284 billion cubic meters year-on-year, with domestic sales increasing by 6.1%[76]. Operational Efficiency - EBITDA to total debt ratio increased to 1.67 in 2023, up from 1.39 in 2022[15]. - EBITDA interest coverage ratio was 35.86 in 2023, compared to 38.25 in 2022[15]. - The company achieved a crude oil processing load rate of 85.6%, an increase of 4.7 percentage points from 80.9% in the previous year[36]. - The company processed 1,398.8 million barrels of crude oil in 2023, a 15.3% increase from 1,212.7 million barrels in the previous year[36]. New Energy and Sustainability - New energy projects saw significant development with wind and solar power generation reaching 2.2 billion kWh and an installed capacity of 3.7 million kW added in 2023[25]. - The company is actively pursuing green and low-carbon transformation, with a notable acceleration in the development of new energy and new materials[19]. - The company plans to increase natural gas sales capital expenditure to RMB 6 billion in 2024, focusing on LNG infrastructure and market expansion[132]. Dividends and Shareholder Returns - The company plans to distribute a year-end dividend of RMB 0.23 per share, totaling approximately RMB 42.095 billion based on a total share capital of 183,020,977,818 shares as of December 31, 2023[68]. - A cash dividend of RMB 0.23 per share is proposed for the year-end 2023, totaling approximately RMB 42.095 billion[163]. Compliance and Regulatory Changes - The company will ensure compliance with new government regulations regarding mineral rights transfer revenue collection, effective from May 1, 2023[169]. - The company is required to confirm the residency status of H-share individual shareholders based on their registered addresses by June 19, 2024[188]. - The company will strictly comply with tax regulations as of June 25, 2024, for H-share shareholders[187]. Future Outlook - The forecast for total revenue in 2024 is RMB 258 billion, with the oil and gas and new energy segment expected to maintain a significant contribution[128]. - The company anticipates a 5% GDP growth in China for 2024, with a competitive domestic refined oil market and rapid growth in natural gas demand[134]. - The company aims to achieve an oil production target of 909.2 million barrels and natural gas sales of 5,142.6 billion cubic feet in 2024[134].