Core Viewpoint - China National Petroleum Corporation (CNPC) shows a strong technical outlook with upward momentum, closing at HKD 6.59 on May 28, 2025, reflecting a 0.92% increase and surpassing key moving averages [1][3]. Technical Analysis - The stock has broken through the first resistance level of HKD 6.68 and is poised to challenge the next resistance at HKD 6.99, with first and second support levels at HKD 6.34 and HKD 6.07 respectively [3]. - The stock is above major support zones, indicating strong market support, with a 5-day volatility of 4.1%, suggesting manageable fluctuations [3]. - The RSI index is at 71, indicating overbought conditions, but no clear signs of weakening are present, suggesting a strong stock trend [3]. - Other indicators like the Williams and Stochastic indicators are also in overbought territory without reversal signals, confirming ongoing market momentum [3]. - The CCI and ADX indicators show robust performance, further validating the current trend [3]. - Overall technical indicators suggest a "strong buy" signal with a total strength of 17, indicating a very strong technical buying zone [3]. Trading Volume and Market Sentiment - The trading volume recorded was HKD 1.273 billion, reflecting active market participation and supporting the price uptrend [5]. - Momentum oscillators and rate of change indicators provide neutral to slightly bullish signals, indicating no signs of capital withdrawal [5]. - Psychological indicators and bull-bear power indicators maintain a positive outlook, boosting investor confidence [5]. Derivative Products - Various call and put options are available for CNPC, including UBS call options with a leverage of 12.7 times and a strike price of HKD 7.51, suitable for investors seeking high returns at lower costs [5]. - Guotai Junan call options offer a leverage of 13.1 times, balancing leverage and implied volatility for more conservative investors [5]. - UBS and Citigroup bear options have a redemption price of HKD 7.5, with actual leverage of 4.6 times and 4.9 times respectively, appealing to investors looking to short CNPC [5]. Short to Medium-Term Outlook - CNPC is expected to have further upward potential in the short to medium term, supported by resistance level breakthroughs and positive technical signals [7]. - Investors are advised to monitor short-term adjustment risks due to the overbought status of RSI and Williams indicators, as well as changes in trading volume for further reference [7].

Financial Performance - The operating revenue for the reporting period was RMB 753,108 million, a decrease of 7.3% compared to the previous year[4]. - The net profit attributable to shareholders of the parent company was RMB 46,809 million, reflecting a 2.3% increase year-on-year[4]. - The net cash flow from operating activities increased by 25.3% to RMB 139,436 million compared to the previous year[4]. - The basic and diluted earnings per share were both RMB 0.26, up 2.3% from the previous year[4]. - The return on equity was 3.0%, a decrease of 0.1 percentage points compared to the previous year[4]. - Net profit for the three months ending March 31, 2025, was RMB 51,885 million, compared to RMB 51,366 million for the same period in 2024, representing a growth of 1.0%[35]. - Operating revenue decreased to RMB 753,108 million from RMB 812,801 million, a decline of approximately 7.3% year-over-year[35]. - The company reported a total comprehensive income of RMB 53,164 million for the first quarter of 2025, compared to RMB 49,105 million in the same quarter of 2024, an increase of approximately 8.3%[35]. - The company achieved an operating profit of RMB 5.043 billion from sales, down RMB 1.720 billion from RMB 6.763 billion year-on-year[22]. - The operating profit for the oil and gas and new energy segment was RMB 46,093 million, up from RMB 43,077 million in the same period of 2024, reflecting an increase of approximately 7.0%[46]. Assets and Liabilities - Total assets at the end of the reporting period amounted to RMB 2,841,230 million, representing a 3.2% increase from the previous year[4]. - The company's total liabilities increased to RMB 1,077,428 million from RMB 1,043,144 million, an increase of about 3.3%[29]. - The total equity attributable to shareholders rose to RMB 1,564,643 million from RMB 1,515,371 million, reflecting an increase of approximately 3.2%[29]. - As of March 31, 2025, total assets increased to RMB 2,841,484 million from RMB 2,753,007 million as of December 31, 2024, reflecting a growth of approximately 3.2%[27]. - The company's total equity increased to RMB 1,763,818 million as of March 31, 2025, compared to RMB 1,709,623 million at the end of 2024[43]. - The company's non-current assets totaled RMB 2,152,207 million as of March 31, 2025, slightly down from RMB 2,161,907 million at the end of 2024[43]. Production and Sales - The company reported a total oil and gas equivalent production of 467.0 million barrels, a 0.7% increase from 463.7 million barrels year-on-year[15]. - Domestic oil and gas equivalent production reached 418.1 million barrels, up 1.2% from 413.0 million barrels in the same period last year[15]. - The company’s wind and solar power generation increased by 94.6%, reaching 1.68 billion kWh compared to 860 million kWh in the previous year[15]. - The average realized price of crude oil was $70.00 per barrel, down 7.2% from $75.41 per barrel in the previous year[14]. - The average sales price of domestic natural gas was $9.01 per thousand cubic feet, down 3.9% from $9.38 per thousand cubic feet year-on-year[14]. - Total sales of gasoline, kerosene, and diesel amounted to 36,776 thousand tons, a decrease of 6.3% compared to 39,258 thousand tons in Q1 2024[23]. - The sales of natural gas increased to 864.42 billion cubic meters, up 3.7% from 833.69 billion cubic meters year-on-year[25]. Cash Flow and Investments - Cash flow from operating activities generated RMB 139,436 million, an increase of 25.3% from RMB 111,257 million in the prior year[38]. - Cash and cash equivalents increased significantly to RMB 291,567 million from RMB 216,246 million, a growth of about 34.8%[27]. - Investment activities resulted in a net cash outflow of RMB 43,547 million, an improvement from RMB 60,404 million in the previous year[38]. - Cash flow from financing activities showed a net outflow of RMB 8,504 million, significantly reduced from RMB 65,439 million in the same period last year[38]. - The cash received from dividends increased significantly to RMB 2,463 million, compared to RMB 241 million in the same period of 2024, representing a substantial increase of approximately 927.0%[45]. Strategic Developments - The company acquired 100% equity of China Petroleum Group Electric Power Co., Ltd. in 2024, which will be consolidated into the financial statements from October 29, 2024[4]. - The company plans to increase its A-shares and H-shares holdings by no less than RMB 2.8 billion and no more than RMB 5.6 billion within 12 months starting from April 8, 2025[11]. - The company plans to enhance its marketing strategies and expand its non-oil business to improve profitability[22]. - The company maintains a stable financial condition and continues to focus on green and low-carbon transformation[14].

Dividend Distribution - The company plans to distribute a final dividend of RMB 0.25 per share, totaling approximately RMB 45.755 billion based on the total share capital of 183,020,977,818 shares as of December 31, 2024[12]. - The company emphasizes its commitment to shareholder returns through dividend distributions[12]. - Cash dividends for 2024 amounted to RMB 86.020 million, representing 52.2% of the net profit[118]. - The proposed final dividend is subject to approval at the 2024 annual general meeting of shareholders[120]. - The dividend for A-shares will be paid in RMB, while H-shares will be paid in HKD, with the applicable exchange rate based on the average midpoint rate published by the People's Bank of China one week prior to the dividend declaration[121]. - Individual shareholders holding A-shares for more than one year will be exempt from individual income tax on dividends, while those holding for one year or less will not have tax withheld[122]. - Qualified Foreign Institutional Investors (QFII) will have a 10% corporate income tax withheld on dividends received[123]. - Non-resident corporate shareholders will also have a 10% withholding tax on dividends distributed[124]. - H-share individual shareholders will have their income tax withheld at rates varying from 10% to 20% based on their residency status and applicable tax treaties[125]. - The company will determine the residency status of H-share individual shareholders based on the registered address as of June 24, 2025[126]. - The company will comply with tax regulations for dividends distributed to investors through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, applying a 20% withholding tax for mainland individual investors[127]. Financial Performance - The company reported significant cash flow and financial performance, although specific figures were not detailed in the provided content[12]. - The company's revenue for 2024 was CNY 2,937,981 million, a decrease of 2.5% compared to CNY 3,012,812 million in 2023[17]. - Operating profit for 2024 was CNY 233,954 million, slightly down from CNY 235,862 million in 2023[17]. - Net profit attributable to shareholders for 2024 was CNY 164,684 million, representing a 2.0% increase from CNY 161,416 million in 2023[19]. - The total assets at the end of 2024 were CNY 2,753,007 million, a slight decrease of 0.2% from CNY 2,759,237 million in 2023[19]. - The company's cash flow from operating activities for 2024 was CNY 406,532 million, down 11.0% from CNY 456,847 million in 2023[19]. - The basic earnings per share for 2024 was CNY 0.90, an increase of 2.0% from CNY 0.88 in 2023[19]. - The company reported a net asset return rate of 10.9% for 2024, slightly down from 11.1% in 2023[17]. - Capital expenditures for 2024 were CNY 275,849 million, compared to CNY 275,393 million in 2023[17]. - Non-recurring losses for 2024 totaled CNY 8,611 million, primarily due to asset disposal losses and other non-operating expenses[22]. Market Position and Operations - The company is one of the largest oil and gas producers and sellers in China, with a dominant position in the industry[13]. - The company operates under both Chinese and International Financial Reporting Standards, ensuring comprehensive financial transparency[11]. - The company is involved in various sectors including exploration, production, refining, and sales of oil and gas, as well as new energy initiatives[13]. - The company has a robust market presence, being one of the largest revenue-generating companies in China[13]. - The company is focused on future growth and expansion in both domestic and international markets[12]. - The company achieved operating revenue of RMB 2,937.981 billion, driven by increased oil and gas production and optimized product structure[49]. - The company processed 1,378.4 million barrels of crude oil in 2024, a decrease of 1.5% from 1,398.8 million barrels in the previous year[65]. - The total sales volume of gasoline, kerosene, and diesel was 15,900.0 thousand tons in 2024, down 4.1% from 16,579.8 thousand tons in 2023[69]. - The company’s market share for gasoline, kerosene, and diesel increased to 31.3% in 2024, up from 31.1% in 2023[70]. Shareholder Information - 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[30]. - By February 28, 2025, the total number of shareholders increased to 547,674, with 542,478 domestic A-share shareholders and 5,196 overseas H-share shareholders[31]. - The largest shareholder, China National Petroleum Corporation, holds 82.46% of the shares, totaling 150,923,565,570 shares, with no changes during the reporting period[33]. - The second-largest shareholder, Hong Kong Central Clearing Limited, holds 11.43% of the shares, totaling 20,919,164,608 shares, with an increase of 11,598,632 shares during the reporting period[33]. - The company has no other shareholders holding 10% or more of the shares, apart from China National Petroleum Corporation[42]. - The actual controller of the company is the State-owned Assets Supervision and Administration Commission of the State Council[43]. Governance and Compliance - The financial reports have been audited by KPMG Huazhen and KPMG, both issuing unqualified audit opinions[11]. - The company has a strong governance structure with a board of directors ensuring the accuracy and completeness of financial reports[11]. - The company has established a comprehensive internal governance structure to ensure good corporate governance and internal control mechanisms[196]. - The board has evaluated the internal control and risk management system, deeming it effective and sufficient for the fiscal year ending December 31, 2024[186]. - The company has established a risk management system to identify, analyze, evaluate, and respond to risks that may materially impact its strategy, operations, compliance, and financial condition[186]. - The independent non-executive directors have a maximum term of six years, ensuring a rotation of perspectives[199]. - The company has received independence confirmation letters from 5 independent non-executive directors, confirming their full independence in accordance with the Hong Kong Listing Rules[197]. - The board has established 5 specialized committees: Nomination Committee, Audit Committee, Investment and Development Committee, Remuneration and Assessment Committee, and Sustainability Committee to support decision-making[197]. - The company has mechanisms in place to ensure the board receives independent opinions, including the establishment of management measures for independent directors and regular communication with auditors[198]. Future Plans and Investments - The company aims to build a world-class comprehensive international energy company and is focusing on high-quality development and innovation strategies[42]. - For 2025, the company plans to produce 936.2 million barrels of crude oil and 5,341.0 billion cubic feet of marketable natural gas[50]. - The company aims to process 1,330.9 million barrels of crude oil in 2025 as part of its refining and chemical business strategy[51]. - The company plans to strengthen its market position by expanding its comprehensive energy service stations and improving its marketing strategies[51]. - The company plans to allocate RMB 210.00 billion for oil and gas and new energy in 2025, representing 80.09% of total projected capital expenditures[104]. - The company expects capital expenditure for the oil and gas and new energy segment to decrease to RMB 210.000 billion in 2025, continuing to focus on key domestic basins[106]. Related Party Transactions - The group continues to engage in several ongoing related party transactions with China National Petroleum Corporation, with transaction limits approved for the period from January 1, 2024, to December 31, 2026[154]. - A total agreement for mutual supply of products and services has been established with China National Petroleum Corporation, effective from January 1, 2024, for a duration of three years[155]. - The group will provide various products and services to China National Petroleum Corporation, including crude oil, natural gas, and financial services[156]. - China National Petroleum Corporation is expected to provide more products and services to the group than the group provides to them, including engineering and production services[157]. - The company has confirmed that all related transactions for 2024 have been conducted under normal business terms and are in the overall interest of shareholders[175][176]. Environmental and Renewable Energy Initiatives - The company's renewable energy segment saw a significant increase in wind and solar power generation, reaching 4.72 billion kWh, a 116.2% increase from 2.18 billion kWh in 2023[63]. - The Chinese government is promoting high-quality development in refined oil circulation, which is expected to enhance the group's sustainable growth and operational results[150]. - The government is also deepening the market-oriented reform of renewable energy grid prices, aiming for all renewable energy generation to enter the electricity market, which will benefit the group's ongoing business[151].

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]