Investment Rating - The report maintains a positive outlook on the petrochemical industry, particularly regarding the PTA sector, due to increased maintenance schedules and anticipated production cuts [3][4]. Core Insights - The PTA industry has been in a prolonged state of loss since 2022, exacerbated by rapid capacity expansion. As of November 7, 2025, the PTA industry's gross profit reached -319 CNY/ton, indicating a loss across the sector [3][4]. - Recent increases in PTA maintenance schedules are expected to tighten supply, with major companies like Tongkun and Hengli yet to announce maintenance plans. If these companies proceed with production cuts, industry profitability may return to breakeven levels, with potential profit per ton increasing by 200-300 CNY [3][8]. - The upstream sector is experiencing a decline in oil prices, with Brent crude closing at 63.63 USD/barrel, down 2.21% from the previous week. This decline is coupled with an increase in drilling day rates for self-elevating platforms, indicating a recovery trend in the oil service sector [15][33]. Summary by Sections PTA Sector - The PTA industry is facing a significant downturn, with losses expected to continue into 2025. The increase in maintenance schedules is anticipated to reduce supply and support a recovery in profitability [3][4][8]. - Current PTA operating rates are at 78%, reflecting weak industry conditions, but with no significant inventory pressure, a quicker recovery is expected as maintenance plans are realized [8][10]. Upstream Sector - Brent crude oil prices have decreased, with a closing price of 63.63 USD/barrel, while WTI prices also fell to 59.75 USD/barrel. The overall trend suggests a potential for further price declines, although OPEC's production cuts may provide some support [15][17]. - The number of active drilling rigs in the U.S. has increased slightly, indicating a potential uptick in exploration and production activities despite a year-over-year decline [25][30]. Refining Sector - The refining sector is seeing improved margins, with the Singapore refining margin rising to 23.18 USD/barrel. This improvement is attributed to a recovery in demand and a tightening of supply due to maintenance activities [46][48]. - The domestic refining sector's product price differentials have also improved, suggesting a favorable environment for refining profitability moving forward [46][48]. Polyester Sector - The polyester chain is showing signs of recovery, with expectations for improved profitability as supply and demand dynamics shift. Key companies to watch include Tongkun and Wankai New Materials [10][11].

Summary of CNOOC Engineering Q3 2025 Earnings Call Company Overview - **Company**: CNOOC Engineering - **Report Date**: October 25, 2025 - **Period Covered**: First three quarters of 2025 Key Financial Metrics - **Net Profit**: Decreased by 8.01% to 1.605 billion RMB [2][1] - **Revenue**: Decreased by 13.54% to 17.661 billion RMB [2][1] - **Market Contracting Amount**: Increased by 124.85% to 37.24 billion RMB [2][1] - **Overseas Business Revenue**: Reached a historical high of 29.336 billion RMB [2][1] - **Total Backlog**: Approximately 59.5 billion RMB [2][1] Operational Highlights - **Projects Executed**: 75 large-scale projects, with 22 completed [4][1] - **Construction Achievements**: - 21 land-based jackets and 14 modules constructed - 23 offshore jackets and 16 modules installed - Laid 273 km of subsea pipelines and 167 km of subsea cables [4][1] - **Steel Processing Completion**: 27.7% of planned volume [4][1] - **Offshore Investment**: Decreased by 12.32% [4][1] Order Conversion and Revenue Outlook - **Order Conversion Cycle**: - Domestic projects: 1-2 years - International projects: 2-3 years or longer - New BH project expected to take 5-6 years for revenue recognition [5][1] - **Profitability of Overseas Projects**: - 2024 overseas gross margin: approximately 9%, lower than domestic levels - Slight improvement in 2025 [5][1] Research and Development - **R&D Investment**: Increased significantly compared to the previous year, focusing on apparel and underwater industries [3][1][8][1] - **New Product Development**: - Deepwater trees in R&D phase, expected results in H1 2026 - Nearshore trees awaiting mass production orders [7][1] Cash Flow and Payment Terms - **Cash Flow Management**: - Longer payment cycles for overseas projects (approximately 45 days) compared to domestic (30 days) - Prepayment ratios: 10% for general contracts, up to 20-30% for some overseas projects [9][1] Dividend Policy - **Dividend Strategy**: - Cash dividends prioritized, with a minimum payout ratio of 30% set for 2024-2026 - 2024 actual payout ratio reached 41% [10][1][11][1] Future Outlook - **Short-term Expectations**: Anticipated revenue growth in Q4 due to project deliveries, despite some delays in Q3 [12][1] - **Long-term Goals**: Aim for 30-60 billion RMB revenue with a 7% compound growth rate, targeting a total of 60 billion RMB by 2035 [12][1] Conclusion CNOOC Engineering is navigating a challenging environment with a focus on improving operational efficiency and expanding its overseas presence. The company remains optimistic about future growth driven by a robust project pipeline and strategic investments in R&D.

Investment Rating - The report maintains a positive outlook on the petrochemical industry, highlighting potential investment opportunities in specific companies within the sector [6][33][46]. Core Insights - The report indicates that the oil price has shown a slight increase in Q3 2025, with Brent crude averaging $68.2 per barrel, a 2.1% increase quarter-on-quarter but a 19.8% decrease year-on-year [6][22][29]. - The upstream oil and gas sector has seen improved performance due to rising oil prices, while the downstream refining sector is experiencing pressure from weak terminal demand [33][34]. - The report recommends focusing on quality companies in the polyester sector, such as Tongkun Co. and Wan Kai New Materials, as well as large refining companies like Hengli Petrochemical and Rongsheng Petrochemical [6][33][46]. Summary by Sections Upstream Oil and Gas Sector - In Q3 2025, the oil and gas extraction and oilfield services sector achieved total revenue of 1,579.75 billion yuan, a 4.0% decrease year-on-year but a 3.5% increase quarter-on-quarter [21][23]. - The net profit for the sector was 93.05 billion yuan, down 6.1% year-on-year but up 6.2% quarter-on-quarter, with a gross margin of 20.9% [21][23]. Downstream Refining and Chemical Sector - The refining and chemical industry reported total revenue of 1,670.2 billion yuan in Q3 2025, a 5.3% decrease year-on-year but a 3.8% increase quarter-on-quarter [33][34]. - The net profit for this sector was 59.69 billion yuan, reflecting a 5.4% increase year-on-year and a 14.8% increase quarter-on-quarter, with a gross margin of 17.8% [33][34]. Price Trends and Margins - The report notes that the price spread for major petrochemical products has shown mixed trends, with some margins expanding while others contracted [15][18][34]. - The average price spread for ethylene-ethylene was $605 per ton, an increase of $38 per ton quarter-on-quarter, while the propylene-acrylic acid spread decreased by 440 yuan per ton [15][18]. Recommendations - The report suggests that the polyester sector is tightening in supply and demand, with expectations for improvement in profitability, particularly for companies like Tongkun Co. and Wan Kai New Materials [6][33][46]. - It also highlights the potential for large refining companies to benefit from cost improvements and competitive advantages due to domestic policies and overseas refinery contractions [6][33][46].

Investment Rating - The report maintains a "Positive" outlook on the petrochemical industry for Q3 2025 [3] Core Insights - Q3 2025 saw a slight recovery in oil prices, with Brent crude averaging $68.2 per barrel, a 2.1% increase quarter-on-quarter but a 19.8% decrease year-on-year [6][22] - The upstream oil and gas sector experienced improved performance due to rising oil prices, while the downstream refining sector faced challenges from weak terminal demand [34][21] - The report highlights potential investment opportunities in high-quality companies within the polyester sector and large refining enterprises [6][34] Summary by Sections Upstream Oil and Gas Sector - In Q3 2025, the oil and gas extraction and service industry achieved total revenue of CNY 15,797.5 billion, a 4.0% decrease year-on-year but a 3.5% increase quarter-on-quarter [21] - The net profit for the sector was CNY 930.5 billion, down 6.1% year-on-year but up 6.2% quarter-on-quarter, with a gross margin of 20.9% [21][23] - The report notes that the recovery in oil prices contributed to improved performance in upstream extraction and sales [21] Downstream Refining and Chemical Sector - The refining and chemical industry reported total revenue of CNY 16,702.0 billion in Q3 2025, a 5.3% decrease year-on-year but a 3.8% increase quarter-on-quarter [34] - The net profit for this sector was CNY 596.9 billion, reflecting a 5.4% increase year-on-year and a 14.8% increase quarter-on-quarter, with a gross margin of 17.8% [34][36] - The report indicates that while oil prices rose, the downstream refining product margins decreased, particularly in the polyester sector due to seasonal demand fluctuations [35][34] Price Trends and Margins - The report details various price trends, including the average price of Brent crude at $68.2 per barrel and the average price differences for key petrochemical products [16][18] - Specific price differences such as the ethylene-ethylene price difference at $605 per ton and the propylene-propane price difference at CNY 1,464 per ton were noted, with some margins expanding while others contracted [15][18] - The report emphasizes the concentration of profits in the polyester industry, with the PTA segment under pressure [15][34] Investment Recommendations - The report recommends focusing on high-quality companies in the polyester sector, such as Tongkun Co. and Wan Kai New Materials, as well as large refining companies like Hengli Petrochemical and Rongsheng Petrochemical [6][34] - It also suggests that the oil price is expected to maintain a mid-to-high level with limited downside potential, recommending companies with high dividend yields like China National Petroleum and China National Offshore Oil [6][34]

Market Overview - The oil service engineering sector increased by 0.66% on November 6, with CNOOC Engineering leading the gains [1] - The Shanghai Composite Index closed at 4007.76, up 0.97%, while the Shenzhen Component Index closed at 13452.42, up 1.73% [1] Stock Performance - Key stocks in the oil service engineering sector showed varied performance, with notable gainers including: - CNOOC Engineering (600583) at 5.70, up 1.60% with a trading volume of 727,200 shares and a turnover of 413 million yuan [1] - Zhongman Petroleum (603619) at 21.50, up 1.46% with a trading volume of 117,000 shares and a turnover of 250 million yuan [1] - Other stocks such as PetroChina Engineering (600339) and Sinopec Oilfield Service (600871) remained flat [1] Capital Flow - The oil service engineering sector experienced a net outflow of 166 million yuan from institutional investors, while retail investors saw a net inflow of 207 million yuan [2] - The capital flow data indicates that retail investors were more active in the market compared to institutional and speculative investors [2] Individual Stock Capital Flow - Specific stocks showed significant capital flow patterns: - Zhongyou Petroleum (002207) had a net inflow of 6.37 million yuan from institutional investors but a net outflow from retail investors [3] - CNOOC Engineering (600583) faced a net outflow of 6.51 million yuan from institutional investors, while retail investors contributed a net inflow of 46.41 million yuan [3] - Other stocks like Huibo Yin (002554) and Beiken Energy (002828) also showed mixed capital flow results [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its performance relative to the market [8]. Core Insights - The company reported a revenue of 17.66 billion yuan for the first three quarters of 2025, a year-on-year decrease of 13.54%. The net profit attributable to shareholders was 1.61 billion yuan, down 8.01% year-on-year, while the non-recurring net profit increased by 7.59% to 1.40 billion yuan [6]. - The third quarter saw a revenue of 6.34 billion yuan, a decline of 9.34% year-on-year but a slight increase of 1.96% quarter-on-quarter. The net profit for Q3 was 507 million yuan, down 7.55% year-on-year and 9.13% quarter-on-quarter [6]. - The company’s gross margin for Q3 was 11.03%, a decrease of 2.56 percentage points, primarily due to the impact of typhoons and a temporary decline in workload [6]. - The company achieved a record high in overseas contract awards, with a total of 37.24 billion yuan in new orders, a year-on-year increase of 124.85%, including significant projects in Qatar and Thailand [8]. - The capital expenditure of China National Offshore Oil Corporation (CNOOC) is expected to remain high, providing a solid foundation for the company's performance [8]. Financial Summary - For 2025, the company is projected to achieve total revenue of 34.48 billion yuan, with a year-on-year growth rate of 15.1%. The net profit is expected to be 2.34 billion yuan, reflecting an 8.3% increase [7]. - The earnings per share (EPS) for 2025 is estimated at 0.53 yuan, with a price-to-earnings (PE) ratio of 11 [7]. - The company’s return on equity (ROE) is projected to be 8.3% for 2025, with a slight increase to 8.8% in the following years [7].

Core Insights - The oil service engineering sector experienced a rise of 1.98% on November 3, with Huibo Energy leading the gains [1] - The Shanghai Composite Index closed at 3976.52, up 0.55%, while the Shenzhen Component Index closed at 13404.06, up 0.19% [1] Stock Performance - Huibo Energy (002554) closed at 3.69, with a significant increase of 10.15% and a trading volume of 885,600 shares, amounting to 314 million yuan [1] - Tongyuan Petroleum (300164) saw a rise of 3.94%, closing at 6.07 with a trading volume of 1,109,500 shares [1] - Beiken Energy (002828) increased by 3.82%, closing at 11.70 with a trading volume of 255,600 shares [1] - Other notable performers include Zhongman Petroleum (619809) up 3.44%, Haiding Tian Station (600583) up 3.12%, and PetroChina Engineering (600339) up 1.69% [1] Capital Flow - The oil service engineering sector saw a net inflow of 286 million yuan from institutional investors, while retail investors experienced a net outflow of 136 million yuan [2][3] - Huibo Energy attracted a net inflow of 79.89 million yuan from institutional investors, while retail investors withdrew 44.58 million yuan [3] - Tongyuan Petroleum had a net inflow of 57.54 million yuan from institutional investors, with retail investors withdrawing 36.61 million yuan [3]

Market Overview - The Shanghai Composite Index closed at 3976.52 points, above the six-month moving average, with an increase of 0.55% [1] - The total trading volume of A-shares reached 21,329.04 million yuan [1] Stocks Breaking the Six-Month Moving Average - A total of 222 A-shares have surpassed the six-month moving average today [1] - Notable stocks with significant deviation rates include: - Baose Co., Ltd. (300402) with a deviation rate of 16.81% and a price increase of 19.99% [1] - Meirui New Materials (300848) with a deviation rate of 11.80% and a price increase of 19.99% [1] - Deer Chemical (920304) with a deviation rate of 10.57% and a price increase of 20.75% [1] Stocks with Smaller Deviation Rates - Stocks with smaller deviation rates that have just crossed the six-month moving average include: - Zhuhai Port, Tianhong Shares, and New Energy Tai Shan [1] - The table lists various stocks with their respective trading performance, including: - Academic shares (300261) with a deviation rate of 9.21% and a price increase of 11.98% [1] - Dahongli (300865) with a deviation rate of 7.54% and a price increase of 11.29% [1]

Core Viewpoint - The stock of CNOOC Engineering has shown fluctuations in trading performance, with a slight increase of 2.02% on November 3, 2023, and a year-to-date price increase of 5.33% [1][2]. Group 1: Stock Performance - As of November 3, 2023, CNOOC Engineering's stock price reached 5.55 CNY per share, with a trading volume of 1.36 billion CNY and a turnover rate of 0.56%, resulting in a total market capitalization of 24.539 billion CNY [1]. - The stock has experienced a decline of 0.89% over the last five trading days, but has increased by 4.91% over the last 20 days and by 1.09% over the last 60 days [1]. Group 2: Financial Performance - For the period from January to September 2025, CNOOC Engineering reported a revenue of 17.661 billion CNY, reflecting a year-on-year decrease of 13.54%, and a net profit attributable to shareholders of 1.605 billion CNY, down 8.01% year-on-year [2]. - CNOOC Engineering has distributed a total of 7.178 billion CNY in dividends since its A-share listing, with 1.981 billion CNY distributed over the past three years [3]. Group 3: Shareholder Information - As of September 30, 2025, the number of shareholders for CNOOC Engineering was 78,900, a decrease of 15.77% from the previous period, while the average number of circulating shares per shareholder increased by 18.72% to 56,047 shares [2]. - The second-largest circulating shareholder is Hong Kong Central Clearing Limited, holding 85.3675 million shares, a decrease of 30.1612 million shares from the previous period [3].

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of 17.661 billion yuan for the first three quarters of 2025, a year-on-year decrease of 13.54%. The net profit attributable to the parent company was 1.605 billion yuan, down 8.01% year-on-year, while the net profit after deducting non-recurring items increased by 7.59% to 1.404 billion yuan [2][6] - In Q3 alone, the company achieved a revenue of 6.343 billion yuan, a decline of 9.34% year-on-year, with a net profit of 507 million yuan, down 7.55% year-on-year. The net profit attributable to the parent company after deductions was 444 million yuan, a decrease of 4.68% [2][6] - The decline in oil prices, along with delivery schedules and typhoon impacts, has put pressure on work volume. However, new overseas contracts have significantly increased, ensuring sufficient orders for future workloads. The potential of offshore oil and gas resources is substantial, and the company is expected to benefit from CNOOC's efforts to increase reserves and production [2][6] - The company completed the construction of 6 jackets and 6 modules on land in Q3, a year-on-year decrease of 25% and 64.71%, respectively. Offshore, it completed 4 jackets and 6 modules, down 42.86% and 57.14% year-on-year. The total length of subsea pipeline laid was 76 kilometers, a decrease of 44.93% [13] - The company has signed new overseas contracts worth approximately 40 billion USD in the Middle East, with total orders on hand amounting to about 59.5 billion yuan, a year-on-year increase of 63.01% [2][6] - The government work report for 2025 highlights the development of deep-sea technology, indicating new opportunities for the company in deep-sea resource development and equipment manufacturing [2][6] Financial Summary - The company expects EPS for 2025-2027 to be 0.54 yuan, 0.60 yuan, and 0.65 yuan, respectively, with corresponding PE ratios of 10.12X, 9.20X, and 8.44X based on the closing price on October 30, 2025 [2][6]