Core Viewpoint - Morgan Stanley has identified resilient "winners" in the current oil price rally, specifically focusing on Hong Kong stocks, all of which are rated as "overweight" [1] Group 1: Company Ratings and Target Prices - China Petroleum & Chemical Corporation (00857) has a target price set at HKD 13 [1] - China Hongqiao Group Limited (01378) has a target price set at HKD 40 [1] - Aluminum Corporation of China Limited (02600) has a target price set at HKD 16 [1] - Yanzhou Coal Mining Company Limited (01171) has a target price set at HKD 12 [1]

Market Performance - The Hang Seng Index decreased by 0.52% [1] - The Hang Seng Tech Index fell by 0.42% [1] Company Movements - Li Auto, CATL, and Horizon Robotics experienced significant declines [1] - China Shenhua Energy rose by over 2% [1] - NetEase increased by nearly 2% [1] - CNOOC and PetroChina both saw gains of over 1% [1]

PETROCHINA COMPANY LIMITED 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而産生或因倚 賴該等內容而引致的任何損失承擔任何責任。 中國石油天然氣股份有限公司 承董事會命 中國石油天然氣股份有限公司 公司秘書 王華 中國北京 2026 年 3 月 12 日 於本公告日，本公司董事會由戴厚良先生擔任董事長，由周心懷先生擔任副董事長及非執行董 事，由段良偉先生、周松先生及謝軍先生擔任非執行董事，由任立新先生、張道偉先生及宋大 勇先生擔任執行董事，由蔣小明先生、何敬麟先生、閻焱先生、劉曉蕾女士及張玉新先生擔任 獨立非執行董事。 （於中華人民共和國註册成立之股份有限公司） (股份代號：857) 董事會會議通知 中國石油天然氣股份有限公司（「本公司」）董事會（「董事會」）僅此宣佈，董事會會 議將於二零二六年三月二十七日（星期五）在中華人民共和國（「中國」）北京市東城區東直 門北大街 9 號中國石油大廈舉行，藉以（其中包括）審議及批准本公司及其附屬公司截至二零 二五年十二月三十一日止之年度業 ...

（於中華人民共和國註册成立之股份有限公司） (股份代號：857) 董事會會議通知 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而産生或因倚 賴該等內容而引致的任何損失承擔任何責任。 中國石油天然氣股份有限公司 PETROCHINA COMPANY LIMITED 中國石油天然氣股份有限公司（「本公司」）董事會（「董事會」）僅此宣佈，董事會會 議將於二零二六年三月二十七日（星期五）在中華人民共和國（「中國」）北京市東城區東直 門北大街 9 號中國石油大廈舉行，藉以（其中包括）審議及批准本公司及其附屬公司截至二零 二五年十二月三十一日止之年度業績及其發佈，以及考慮派發末期股息之建議。 承董事會命 中國石油天然氣股份有限公司 公司秘書 王華 中國北京 2026 年 3 月 12 日 於本公告日，本公司董事會由戴厚良先生擔任董事長，由周心懷先生擔任副董事長及非執行董 事，由段良偉先生、周松先生及謝軍先生擔任非執行董事，由任立新先生、張道偉先生及宋大 勇先生擔任執行董事，由蔣小明先生、何敬麟先生、閻焱先生、劉曉 ...

Summary of Conference Call on Oil and Chemical Industry Industry Overview - The conference focused on the impact of the Iran situation on the oil, natural gas, and chemical industries, with a comparison to the 1973 oil crisis [2][4] - The current oil crisis is characterized by external forces affecting a specific oil-producing country, Iran, which has limited transportation, leading to extreme market emotions [2][4] Key Points and Arguments Oil Price Predictions - The current oil price is expected to fluctuate between $70 and $90, with a risk premium compared to previous estimates of $60 [3][4] - The ability of Iran to block the Strait of Hormuz is not expected to last long, and the production capacity of surrounding oil-producing countries is not anticipated to decline significantly [3][4] - In extreme scenarios, if Iran's actions severely disrupt production, oil prices could exceed $100 in the medium term [4] Impact on Chinese Oil and Gas Companies - Chinese oil companies, such as China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC), are expected to benefit from rising oil prices due to their production capabilities and low dependency on imports [5][6] - CNPC's dividend yield is projected to remain attractive even in recessionary conditions, with yields around 7% at oil prices between $75 and $80 [5] Chemical Industry Dynamics - The recent surge in oil and natural gas prices has led to rapid price increases in the global chemical sector, driven by both cost-push factors and supply chain disruptions [6][12] - China's chemical supply chain is relatively complete compared to overseas counterparts, particularly in Europe and Japan, but still faces challenges in crude oil supply [6][12] Supply Chain and Production Insights - China's refining capacity is projected to reach 737 million tons by 2025, with crude oil production at 217 million tons last year [7][8] - Approximately 50% of China's crude oil is imported, with potential disruptions from Middle Eastern suppliers impacting imports significantly [7][8] - The country has a strategic reserve that could sustain supply for 2-3 years under extreme conditions [7][8] Market Adjustments and Future Outlook - The chemical industry is expected to undergo a period of inventory adjustment, leading to a potential recovery in demand as global supply chains stabilize [14][19] - The crisis is likely to accelerate the transition to alternative energy sources and chemical products, benefiting companies involved in coal-based chemicals and renewable energy [17][18] Investment Recommendations - Investment in resilient supply chain companies, particularly in the coal chemical sector, is recommended due to their stability and growth potential [16][18] - Companies like Baofeng Energy and Luxi Chemical are highlighted as strong candidates for investment due to their robust supply chains and market positions [16][18] Other Important Insights - The potential for increased agricultural commodity prices due to supply chain disruptions in fertilizers and chemicals is noted, with China positioned to leverage its abundant resources [15][16] - The overall sentiment is optimistic regarding the long-term prospects of the Chinese chemical industry, with expectations of sustained growth and recovery following the current crisis [19][20]

Core Viewpoint - The Energy ETF Guangfa (159945) experienced a significant decline of 6.91% at the opening on March 10, 2023, trading at 1.428 yuan [1] Group 1: ETF Performance - The Energy ETF Guangfa (159945) has a performance benchmark of the CSI All Share Energy Index [1] - Since its establishment on June 25, 2015, the fund has achieved a return of 53.08% [1] - The fund's return over the past month is reported at 17.00% [1] Group 2: Major Holdings Performance - Major holdings in the Energy ETF include: - China Shenhua down 4.09% [1] - China Petroleum down 5.73% [1] - China Petrochemical down 7.14% [1] - Shaanxi Coal and Chemical Industry down 4.37% [1] - China National Offshore Oil Corporation down 9.99% [1] - Jereh Group up 0.03% [1] - Yanzhou Coal Mining down 5.42% [1] - China Coal Energy down 9.67% [1] - Guanghui Energy down 8.89% [1] - Shanxi Coking Coal down 3.67% [1]

Core Viewpoint - The development of coalbed methane, particularly at the Daqi Gas Field, is crucial for increasing natural gas production in China and ensuring energy security, with significant strategic value for the country's energy independence [2][3]. Group 1: Daqi Gas Field Development - The Daqi Gas Field has achieved a daily gas production of over 1.1 million cubic meters and an annual production capacity exceeding 4 billion cubic meters, accounting for over 80% of the national coalbed methane output [2]. - The field has proven geological reserves of 400 billion cubic meters, and coalbed methane is a type of unconventional natural gas found in deep coal seams, typically buried deeper than 1,500 meters [2]. - China's deep coalbed methane resources are abundant, with estimates indicating that the resource volume exceeds 40 trillion cubic meters at depths of 2,000 meters, with approximately 12 trillion cubic meters being recoverable [2]. Group 2: Strategic Importance of Coalbed Methane - The large-scale development of coalbed methane is seen as a strategic move for enhancing natural gas production and ensuring national energy security, as stated by Liu Hongtao, General Manager of PetroChina's Coalbed Methane Company [2]. - Prior to the 14th Five-Year Plan, traditional exploration theories regarded coal seams deeper than 1,500 meters as having low gas content and high development costs, leading to their classification as a "forbidden zone" for coalbed methane development [2]. - The successful commercial development of coalbed methane began with the Daqi 3-7 well in 2019, and by October 2021, the Jishen 6-7 well had tested a daily gas production of 101,000 cubic meters, marking a significant breakthrough in deep coalbed methane development [2]. Group 3: Future Outlook - The demand for natural gas in China is projected to remain high, with consumption expected to reach 426.55 billion cubic meters by 2025, while domestic industrial natural gas production is estimated at 261.9 billion cubic meters, indicating a substantial supply gap [3]. - Coalbed methane is anticipated to become a key resource for natural gas production in the next 3 to 5 years, following tight sandstone gas and shale gas [3]. - Liu Hongtao emphasized that coalbed methane serves as a "new engine" for driving current performance growth for PetroChina and a "new high ground" for future strategic positioning, while also being a "new cornerstone" for enhancing national energy self-sufficiency [3].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the energy sector, specifically oil, LNG (liquefied natural gas), fertilizers, and propane, highlighting potential supply disruptions due to geopolitical tensions in the Asia Pacific region [1][8][10]. Core Insights and Arguments - **Supply Disruptions**: Geopolitical tensions are likely to disrupt supply chains in oil, LNG, fertilizers, and propane, which may lead to increased transportation costs and affect production and exports from Asia. The duration of these tensions will determine the severity of the disruptions [1][8][10]. - **Regional Exposure**: Countries such as India, Thailand, Taiwan, and Korea are identified as being most exposed to potential disruption risks in these sectors [8][15]. - **Oil Reserves**: While oil reserves are relatively high, LNG reserves are lower due to storage challenges. Economies with long-term contracts may be better positioned to secure supplies [8][10][18]. - **Transportation Costs**: Shipping and air-freight costs are rising sharply, which could impact end users if these conditions persist [8][10]. - **Fertilizer Dependence**: India and Thailand are particularly vulnerable to sourcing risks for fertilizers, while Indonesia and China are largely self-sufficient [20][80]. Additional Important Insights - **Mitigating Factors**: - Oil and fuel reserves in Asia Pacific range from 30 to 200 days, providing some buffer against immediate supply disruptions. However, LNG reserves are critically low, with some countries like India having only 5-6 days of inventory [16][57][66]. - Long-term contracts may allow economies to secure additional supplies, mitigating the impact of disruptions [18][66]. - **Sectoral Beneficiaries**: - Refiners such as S-Oil, Reliance, and Indian Oil are expected to benefit from tighter energy markets, as fuel refinery margins continue to rise due to export curbs [21][43]. - Chemical producers outside of China, like Reliance and Siam Cement, may also benefit from higher product prices due to lower propane exports affecting Chinese producers [86]. - **Energy Consumption**: Oil and gas account for 36% of Asia's primary energy consumption, with significant reliance on imports from the Middle East [11][12][22]. Conclusion - The geopolitical landscape poses significant risks to energy supply chains in Asia, particularly for oil, LNG, fertilizers, and propane. Countries with high import dependence and limited reserves are at greater risk, while certain refiners and chemical producers may find opportunities amidst the disruptions. The situation requires close monitoring as the duration of geopolitical tensions will heavily influence the overall impact on production and exports in the region [1][8][15][80].

Summary of Natural Gas Industry Conference Call Industry Overview - The natural gas industry is experiencing a decline in domestic demand growth, with industrial electricity pricing and carbon accounting disadvantages weakening the substitution advantage of natural gas [1][2] - The LNG spot market share is continuously shrinking due to geopolitical conflicts causing production halts in Qatar and shipping disruptions, which temporarily reverses the expectation of supply looseness [1][2] - By Q2 2026, the pricing formula for PetroChina is expected to adjust, with the regulated gas proportion reduced to 55% and the floating proportion linked to COD increased to 12%, leading to a slight increase in comprehensive gas prices [1][10] Key Insights - The rise in gas prices benefits renewable energy and nuclear power, with coal-fired power generation's share expected to drop below 50% [1] - The short-term focus should be on the navigation of the Hormuz Strait and the resumption of production in Qatar, while the medium-term focus is on the impact of PetroChina's pricing policy on costs [1][2] - The profitability of upstream self-produced gas companies is highly elastic, with a 10% increase in gas prices leading to approximately a 20% increase in net profit [1][12] Geopolitical Impact - The recent geopolitical tensions have led to a significant increase in international gas prices, but the long-term supply logic remains intact, with expectations of increased LNG capacity from non-Qatar sources by 2026 [5][6] - The current geopolitical situation has created a temporary supply tightness, but the long-term outlook is still for a return to supply looseness [5][6] Pricing and Cost Structure - The domestic LNG spot market's direct impact on gas companies is limited due to the low proportion of LNG spot volume, with the main concern being the long-term pricing mechanisms of onshore and offshore long-term contracts [2][12] - The pricing structure for PetroChina in 2025 includes a regulated gas proportion of 60% and a floating portion linked to the Shanghai Natural Gas Trading Center's import spot price [11] Market Dynamics - The LNG market is characterized by a lack of significant arbitrage opportunities compared to 2022, with current price differentials being insufficient to create profitable resale opportunities [9] - The domestic LNG price has risen to approximately 4,500 RMB/ton, reflecting a 13% increase from February, driven by international price transmission and recovering domestic demand [10][11] Investment Opportunities - Upstream gas companies are expected to benefit the most from rising gas prices, with a focus on companies with shale gas and coalbed methane assets [15] - The midstream sector, particularly companies with fixed income from pipeline transportation and LNG trading, is expected to maintain stable earnings despite price fluctuations [16] Long-term Outlook - The long-term outlook for the industry suggests a gradual return to a balanced supply-demand scenario, with increasing imports of Russian gas and expanded LNG receiving station capacities [8][13] - The industry is expected to see a gradual recovery in price differentials, with a focus on companies that can effectively pass on costs to consumers [17][19] Monitoring Variables - Key variables to monitor in the coming weeks include geopolitical developments, international gas price fluctuations, PetroChina's pricing policy, and changes in industry demand [20] Conclusion - The natural gas industry is navigating a complex landscape influenced by geopolitical tensions, pricing adjustments, and evolving market dynamics, with significant implications for investment strategies and company profitability [1][5][20]

Market Overview - Global markets are experiencing a sell-off trend due to risk aversion and inflation concerns, with the Nikkei 225 index dropping over 6% and falling below 52,000 points [1] - The A-share market also saw declines, with the Shanghai Composite Index down 1.13%, Shenzhen Component down 2.14%, and ChiNext Index down 2.42% [1][2] - The total trading volume in the Shanghai and Shenzhen markets reached 1.79 trillion yuan, an increase of 403.1 billion yuan compared to the previous trading day [1] Stock Performance - In the A-share market, over 4,500 stocks declined, while only 872 stocks rose [3] - The Hong Kong stock market also faced declines, with the Hang Seng Index and Hang Seng Tech Index both dropping over 2% [4] - Key sectors such as communication equipment and computing hardware experienced significant pullbacks, while oil, coal, and electricity sectors showed strength [4] Sector Analysis - The oil and gas sector saw a surge, with international oil prices rising over 30%, leading to strong performances from major oil companies [7][8] - China National Offshore Oil Corporation hit a new high since its A-share listing, with a market capitalization of 2.12 trillion yuan [8] - The methanol sector was notably active, with several stocks hitting the daily limit up, driven by rising global prices and supply chain disruptions [8][9] Investment Opportunities - The rising oil prices are expected to enhance the sales revenue of oil extraction companies, leading to improved profit margins [8] - The chemical industry is undergoing a significant supply-demand restructuring, with methanol being one of the most affected products [9][10]