Summary of Key Points from the Conference Call Industry Overview - **Industry**: Oil and Gas Sector in China - **Focus**: Opportunities in deep-sea exploration and oil price recovery Core Insights 1. **Deep-Sea Exploration Growth**: The acceleration in the deep-sea exploration permitting framework in the US has attracted investor interest in deep-sea mining and oil & gas exploration. Notably, order intake for FPSOs has significantly increased, driven by deepwater and ultra-deepwater oilfield exploration in South America and Africa [2][2] 2. **Guyana's Oilfields**: The Stabroek oilfield in Guyana, developed by ExxonMobil (45%), Chevron (30%), and CNOOC (25%), is highlighted as a key area of growth. Four additional projects are under construction, with expected production ramp-ups leading to higher returns by 2030 [2][2] 3. **Oil Price Forecasts**: UBS has revised its oil price forecasts, lowering the 2026 estimate to US$62/bbl due to anticipated oversupply of 1.9Mb/d. However, a gradual recovery is expected as supply and demand improve [3][3] 4. **Impact of US Sanctions on Venezuela**: If US sanctions on Venezuela are lifted, production could recover to 1Mb/d, potentially increasing to 1.2-1.3Mb/d. This could exert additional pressure on the oil market in 2026, but the overall supply-demand dynamics are not expected to change significantly [4][4] Company-Specific Insights 1. **PetroChina and CNOOC Price Target Adjustments**: - PetroChina's price target raised to Rmb14.0/HK$11.5 from Rmb12.9/HK$10.3, reflecting a re-rating of the oil and chemical sector [5][5] - CNOOC's price target increased to HK$30.0 from HK$26.5, based on a higher EV/EBITDA multiple [5][5] 2. **Valuation Comparisons**: China's oil majors are trading at lower valuation multiples compared to their overseas peers, with an average 2026E PE/PBV of 11/1.0x versus 13/1.6x for global counterparts. This suggests potential upside for Chinese oil companies [5][5] Additional Insights 1. **Dividend Yield**: The average dividend yield for A+H shares of China's oil majors is projected at 5.2%, which is above the overseas peer average of 4.8% [5][5] 2. **Market Dynamics**: Teapot refineries in China, which typically import Venezuelan crude, may shift to cheaper alternatives like Russian crude, indicating a limited impact from potential Venezuelan oil supply increases [4][4] Conclusion - The oil and gas sector in China is poised for growth, particularly in deep-sea exploration, with favorable long-term price recovery expectations. Companies like PetroChina and CNOOC are well-positioned to benefit from these trends, despite short-term challenges related to oil supply dynamics and geopolitical factors.

Investment Rating - The report maintains a positive outlook on the oil and petrochemical industry, indicating a "Buy" rating due to the current geopolitical risks and potential for price recovery in the medium to long term [1]. Core Insights - The report highlights that the recent surge in oil prices reflects geopolitical risk premiums, particularly due to ongoing tensions between the U.S. and Iran, which significantly impact global oil supply security [4][7]. - It is anticipated that oil prices will exhibit characteristics of being "geopolitically driven with fundamental support" around the Chinese New Year, with potential further increases if conflict expectations materialize [7]. - The medium to long-term outlook suggests a return to fundamental pricing logic as the oil supply-demand balance is expected to loosen, limiting upward price movement without sustained geopolitical conflict [7]. Summary by Sections Upstream Sector - As of January 30, Brent crude oil futures closed at $70.69 per barrel, a 7.30% increase from the previous week, while WTI futures rose by 6.78% to $65.21 per barrel [15]. - U.S. commercial crude oil inventories decreased to 424 million barrels, down 2.296 million barrels week-on-week, which is 3% lower than the five-year average [17]. - The report notes a trend of increasing oil service activity, with drilling day rates remaining stable despite low levels, indicating potential for future increases as global capital expenditures rise [15][35]. Refining Sector - The Singapore refining margin for major products fell to $9.40 per barrel, a decrease of $2.69 from the previous week [54]. - The report indicates that while refining profitability has improved, the current product price differentials remain low, with expectations for gradual improvement as economic recovery progresses [51]. Polyester Sector - The report observes an increase in PTA profitability, with prices rising to 5,271.4 CNY per ton, a 4.66% increase week-on-week [1]. - The overall performance of the polyester industry is deemed average, with a need to monitor demand changes closely [1]. Investment Recommendations - The report recommends focusing on high-quality companies in the polyester sector, such as Tongkun Co. and Wankai New Materials, as well as large refining companies like Hengli Petrochemical and Rongsheng Petrochemical due to expected improvements in cost structures and competitive advantages [1][10]. - It also suggests maintaining a neutral outlook on oil companies, with a focus on those offering high dividend yields, such as China National Petroleum and China National Offshore Oil [10].

Investment Rating - The report maintains a positive outlook on the oil and petrochemical industry, indicating a "Buy" rating due to the current geopolitical risks and potential for price recovery in the medium to long term [1]. Core Insights - The report highlights that the recent surge in oil prices is primarily driven by geopolitical risks, particularly the ongoing tensions between the US and Iran, which have led to Brent crude oil prices exceeding $70 per barrel [1][4]. - It is anticipated that oil prices will exhibit characteristics of being "geopolitically driven with fundamental support" around the Chinese New Year, with potential further increases if conflict expectations materialize [7]. - The medium to long-term outlook suggests a return to fundamental pricing logic, with oil supply and demand expected to be in a loose balance, limiting upward price movement unless geopolitical tensions persist [7]. Summary by Sections Upstream Sector - As of January 30, Brent crude oil futures closed at $70.69 per barrel, reflecting a week-on-week increase of 7.30%, while WTI futures rose by 6.78% to $65.21 per barrel [15]. - US commercial crude oil inventories decreased to 424 million barrels, down by 2.296 million barrels from the previous week, marking a 3% decline compared to the past five years [17]. - The report notes a trend of increasing oil service activity, with drilling day rates remaining stable despite low levels, indicating potential for future increases as global capital expenditures rise [15]. Refining Sector - The report indicates a decline in overseas refined oil crack spreads, with Singapore's refining margin dropping to $9.40 per barrel, down by $2.69 from the previous week [54]. - The report anticipates that refining profitability may improve as oil prices adjust, with expectations of gradual recovery in refining product margins as economic conditions stabilize [51]. Polyester Sector - The report highlights an increase in PTA profitability, with prices rising to 5,271.4 CNY per ton, reflecting a week-on-week increase of 4.66% [1]. - The overall performance of the polyester industry is described as average, with a need to monitor demand changes, but a gradual improvement is expected as new production capacities taper off [1]. Investment Recommendations - The report recommends focusing on high-quality companies in the polyester sector, such as Tongkun Co. and Wankai New Materials, as well as large refining companies like Hengli Petrochemical and Rongsheng Petrochemical, which are expected to benefit from improved cost structures and competitive advantages [1][10]. - It also suggests maintaining a neutral outlook on oil companies, with a preference for those offering higher dividend yields, such as China National Petroleum and China National Offshore Oil Corporation [10].

有券商机构指出，1月制造业PMI（采购经理指数）再度回落到荣枯线以下，反映出有效需求仍不足。A 股流动性支撑延续，临近2026年春节长假，市场交投活跃度依然处于较高水平，短期市场或仍以结构性 震荡为主。 每经记者：刘明涛每经编辑：彭水萍 上周，随着热门板块出现高位震荡，A股主要股指迎来调整，均出现小幅回落，每经品牌100指数在蓝 筹股带动下，周涨幅为0.51%。 有市场人士认为，短期来看，A股市场在交投活跃支撑下，或将延续盘整过程。 "中字头"个股表现出色 上周，A股市场主要指数波动加剧，从周K线来看，截至1月30日收盘，上证指数下跌0.44%，以4117.95 点报收；深证成指下跌1.62%，以14205.89点报收；创业板指和科创50指数周跌幅分别达到0.09%和 2.85%，每经品牌100指数实现小幅反弹，周涨0.51%，以1154.56点报收。 市场热点方面，A股市场板块轮动速度加快，周内半导体、白酒、地产等板块阶段性走高，但行情持续 性仍显不足。经历近期持续上涨后，受国际贵金属价格高位回落影响，上周五有色金属板块大幅回调。 成分股方面，"中字头"个股上周表现出色，中国海油、中国石油以及中国重汽周涨幅 ...

Investment Rating - The report maintains a "Positive" investment rating for the oil processing industry [1]. Core Insights - International oil prices have significantly strengthened due to escalating geopolitical risks in Iran and adverse weather conditions affecting U.S. oil production. As of January 30, 2026, Brent and WTI prices were reported at $69.32 and $65.21 per barrel, respectively, marking increases of 6.53% and 6.78% from the previous week [2][9]. - The oil and petrochemical sector has shown strong performance, with the sector index rising by 7.95% as of January 30, 2026, compared to a slight increase of 0.08% in the broader market index [10]. - The report highlights a notable increase in the number of active offshore drilling platforms, with a total of 376 self-elevating platforms and 134 floating platforms as of January 26, 2026 [26]. Summary by Sections Oil Price Review - Brent crude futures settled at $69.32 per barrel, up $4.25 (+6.53%) from the previous week, while WTI crude futures rose to $65.21 per barrel, an increase of $4.14 (+6.78%) [23]. - The Urals crude price remained stable at $65.49 per barrel, while ESPO crude increased by $4.42 (+8.66%) to $55.46 per barrel [23]. Offshore Drilling Services - The global count of self-elevating drilling platforms remained at 376, while floating platforms increased by one to a total of 134 [26]. U.S. Oil Supply - U.S. crude oil production was reported at 13.696 million barrels per day, a decrease of 36,000 barrels from the previous week. The number of active drilling rigs remained stable at 411 [32]. - The U.S. fracking fleet decreased by 15 units to a total of 148 [32]. U.S. Oil Demand - U.S. refinery crude processing averaged 16.209 million barrels per day, down by 395,000 barrels from the previous week, with a refinery utilization rate of 90.90%, a decline of 2.4 percentage points [40]. U.S. Oil Inventory - Total U.S. crude oil inventories stood at 839 million barrels, a decrease of 1.78 million barrels (-0.21%) from the previous week. Strategic reserves increased by 515,000 barrels (+0.12%), while commercial inventories fell by 2.295 million barrels (-0.54%) [49]. Related Companies - Key companies in the sector include China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation (Sinopec), and China National Petroleum Corporation (CNPC) [3].

Report Summary 1. Report Industry Investment Rating No specific industry investment rating is provided in the given content. 2. Core Viewpoints - The threat of the US to strike Iran has led to an upward oscillation in international oil prices [1]. - This week, the average weekly prices of Brent and WTI crude oil futures were $68.6 and $63.4 per barrel respectively, up $3.8 and $3.2 from last week [2]. 3. Summary by Directory 1. Crude Oil Weekly Data Briefing - The data sources include Bloomberg, WIND, EIA, TSA, Baker Hughes, and Dongwu Securities Research Institute [8][9]. 2. This Week's Performance Review of the Petroleum and Petrochemical Sector - **2.1 Performance of the Petroleum and Petrochemical Sector**: Information on the sector's performance and the performance of sub - industries, as well as the performance of the sector and the Shanghai - Shenzhen 300 Index, is presented, but specific data is not provided in the text [11][18]. - **2.2 Performance of Listed Companies in the Sector**: - The report provides the latest prices, total market values, and price changes in the past week, month, three months, one year, and since the beginning of 2026 for multiple listed companies such as CNOOC, PetroChina, and Sinopec [23]. - A valuation table shows the stock prices, total market values, net profits attributable to the parent company, PE, and PB of these companies from 2024 to 2027 [25]. 3. Crude Oil Sector Data Tracking - **3.1 Crude Oil Prices**: It includes the prices and price differences of Brent, WTI, Russian Urals, and ESPO crude oils, as well as the relationships between the US dollar index, LME copper price, and WTI crude oil price [29][31][40]. - **3.2 Crude Oil Inventory**: Analyzes the correlations between US commercial crude oil inventory and oil prices, the weekly destocking speed of US commercial crude oil and the increase or decrease of Brent oil prices, and presents the total, commercial, strategic, and Cushing crude oil inventories in the US [43][44][49]. - **3.3 Crude Oil Supply**: Covers US crude oil production, the number of active oil rigs, and the number of active fracturing fleets, as well as their relationships with oil prices [63][64][66]. - **3.4 Crude Oil Demand**: Focuses on US refinery crude oil processing volume, refinery operating rates, Shandong refinery seasonal operating rates, and the operating rates of major refineries in China [71][73][75]. - **3.5 Crude Oil Import and Export**: Details the import, export, and net import volumes of US crude oil and crude oil and petroleum products [79][81]. 4. Refined Oil Sector Data Tracking - **4.1 Refined Oil Prices**: Analyzes the relationship between international oil prices and domestic gasoline, diesel, and aviation kerosene prices and price differences, as well as the price differences between crude oil and refined oil in the US, Europe, and Singapore [86][109][114]. - **4.2 Refined Oil Inventory**: Presents the inventories of gasoline, diesel, and aviation kerosene in the US and Singapore [124][128][136]. - **4.3 Refined Oil Supply**: Covers the production volumes of gasoline, diesel, and aviation kerosene in the US [144][145]. - **4.4 Refined Oil Demand**: Focuses on the consumption volumes of gasoline, diesel, and aviation kerosene in the US and the number of airport security checks for passengers [148][149][153]. - **4.5 Refined Oil Import and Export**: Details the import, export, and net export volumes of gasoline, diesel, and aviation kerosene in the US [161][167][168]. 5. Oil Service Sector Data Tracking - It shows the average daily fees of self - elevating drilling platforms and semi - submersible drilling platforms in the industry [176][181].

Investment Rating - The report indicates a positive outlook for the oil and petrochemical sector, with the sector outperforming the Shanghai Composite Index by +8.40% this week [10]. Core Insights - Geopolitical factors remain the primary driver in the current oil market, with significant attention on the potential for conflict between the US and Iran. The market is pricing in a geopolitical risk premium of approximately $8-10 per barrel related to Iran [15][17]. - The report anticipates that if the situation with Iran does not escalate into a full-blown conflict, oil prices may revert to supply-demand fundamentals, potentially leading to a price decline [15][17]. - The report highlights that the recent cold wave and reduced production in Kazakhstan have slowed the accumulation of global inventories, with expectations of a return to a higher accumulation rate in the coming weeks [17][18]. Summary by Sections Market Review - The oil and petrochemical sector has shown a weekly increase of +7.95%, with specific indices such as the oil and gas resources index rising by +7.79% and the oil and gas extraction services index by +7.96% [10][11]. Oil Sector - As of January 29, WTI crude oil was priced at $65.42, up by $6.06, while Brent crude was at $72.57, up by $6.60. The EIA reported a decrease in commercial crude oil inventories by 2.295 million barrels [16][17]. - The report notes that US crude oil production stands at 13.696 million barrels per day, with a decrease in net imports by 61.8% [16]. Refining Sector - The average operating rate of domestic refineries was reported at 80.02%, with a slight increase of 1.24 percentage points from the previous week. The average refining margin for major refineries was 659.83 yuan per ton, down by 101.65 yuan per ton [16]. Polyester Sector - The PX-Naphtha spread has increased to approximately $340 per ton, with PTA processing fees at 374.32 yuan per ton. The report indicates a decline in profitability for polyester products, with average profit levels for various types of polyester showing negative margins [16]. Olefins Sector - The average price for ethylene in the domestic market was reported at 5769 yuan per ton, a slight decrease of 0.33%. The propylene market saw an increase in average transaction prices to 6400 yuan per ton, up by 3.64% [16].

Investment Rating - The report indicates a positive outlook for the oil and petrochemical sector, with the sector outperforming the Shanghai Composite Index by +8.40% this week [10]. Core Insights - The oil market is experiencing a rapid increase in prices due to geopolitical risks, particularly concerning Iran's potential actions in the Strait of Hormuz, with a risk premium estimated at $8-10 per barrel [15][16]. - The overall supply remains in excess, with previous supportive factors like cold weather and reduced production in Kazakhstan starting to stabilize [15]. - The report highlights a mixed performance across various segments of the petrochemical industry, with oil and gas resources showing a +7.79% increase, while the polyester index decreased by -1.82% [10]. Summary by Sections Market Review - The petrochemical sector has outperformed the Shanghai Composite Index, with various indices showing significant weekly changes, including the oil and gas extraction service index at +7.96% and the refining and chemical index at +6.75% [10][11]. Oil Market - As of January 29, WTI crude oil closed at $65.42, up $6.06 from the previous week, while Brent crude closed at $72.57, up $6.60 [16]. - The EIA reported a decrease in commercial crude oil inventories by 2.295 million barrels, with a notable drop in gasoline inventories as well [16]. Refining Sector - The average operating rate of domestic refineries increased to 80.02%, with a slight rise in gasoline demand due to seasonal travel [16]. - The average refining margin for major refineries was reported at 659.83 yuan per ton, down 101.65 yuan from the previous period [16]. Polyester Sector - The PX-Naphtha spread has risen to approximately $340 per ton, with PTA processing fees reported at 374.32 yuan per ton [15]. - The report notes a decline in profitability for various polyester products, with average profit levels for POY150D at -21.03 yuan per ton [15]. Olefins Market - The average price for ethylene in the domestic market was reported at 5769 yuan per ton, a slight decrease of 0.33% from the previous week [15]. - Propylene prices in Shandong increased by 225 yuan per ton, reflecting a 3.64% rise [15].

Investment Rating - The report maintains a "Buy" rating for key companies in the oil and gas sector, including China National Petroleum Corporation, China National Offshore Oil Corporation, China Petroleum & Chemical Corporation, Zhongman Petroleum, and New Natural Gas [2]. Core Insights - The report highlights that geopolitical tensions and cold weather have led to supply contraction expectations, driving oil prices up significantly. The U.S. oil production was impacted by a winter storm, resulting in a loss of up to 2 million barrels per day, approximately 15% of total U.S. production. Additionally, the report notes that geopolitical developments, particularly regarding Iran and the Middle East, will continue to influence short-term oil price fluctuations [8][11]. Summary by Sections 1. Weekly Insights - The oil and petrochemical sector saw a 6.9% increase, outperforming the CSI 300 index, which rose by 0.1% [16][19]. 2. Market Performance - The report indicates that the oil extraction sub-sector had the highest weekly increase of 12.3%, while the oil product sales and storage sub-sector had the smallest increase of 0.7% [19]. 3. Company Performance - Notable performers in the oil and petrochemical sector included PetroChina, which is recommended for its stable performance and high dividends, and CNOOC, which is highlighted for its low production costs and growth potential [14]. 4. Industry Dynamics - The report discusses OPEC+'s decision to maintain stable oil production levels amidst geopolitical risks and supply concerns. It also mentions the EU's approval to stop importing Russian natural gas by the end of 2027, which could impact global energy dynamics [24][25]. 5. Oil and Gas Prices - As of January 30, Brent crude oil futures settled at $70.69 per barrel, a 7.30% increase week-on-week, while WTI futures rose by 6.78% to $65.21 per barrel. The report also notes a decrease in U.S. oil production and refinery processing rates [12][13]. 6. Investment Recommendations - The report suggests three main investment lines: focusing on stable industry leaders like PetroChina and Sinopec, considering CNOOC for its strong earnings potential, and looking at growth companies like New Natural Gas and Zhongman Petroleum due to domestic encouragement for oil and gas production [14].

Investment Rating - The report maintains a positive investment rating for the chemical industry, highlighting the potential benefits from the "dual carbon" policy implementation [5]. Core Insights - The "dual carbon" policy is expected to significantly impact the chemical industry, with a focus on carbon emissions control becoming a rigid constraint during the 14th Five-Year Plan period [6][14]. - The report identifies that the attention towards "dual carbon" from provincial leaders has increased by 137% since September 2025, indicating a shift in focus towards carbon emissions as a critical performance metric [7][18]. - The chemical industry is anticipated to undergo structural changes, with high carbon intensity sectors facing supply constraints, while low-carbon leaders are expected to benefit from the transition [8][30]. Summary by Sections 1. "14th Five-Year Plan": Carbon Peak Closing Battle - Local carbon assessments may treat carbon emissions as an equally important rigid constraint [15]. - High carbon intensity sectors such as ammonia fertilizer, coal chemical, and chlorine-alkali are likely to face capacity constraints first [29][30]. 2. Petrochemical "Dual Carbon" Opportunities - The petrochemical sector is expected to undergo a transformation driven by the "dual carbon" goals, with a focus on optimizing supply and demand structures [38]. - Refining sector dynamics are shifting towards improved supply-demand balance due to stringent approval processes for new projects and the elimination of high-energy-consuming capacities [38]. 3. Basic Chemical "Dual Carbon" Opportunities - Coal chemical industry is projected to stabilize supply under carbon limits, driving quality improvements in the sector [3.1]. - Carbon fiber and fluorochemical sectors are expected to benefit from process optimization and green transitions [3.2][3.3]. 4. Investment Recommendations - The report suggests focusing on three categories of leading companies: 1. Integrated leaders in the oil chemical sector with scale and efficiency advantages [8]. 2. Coal chemical leaders with advanced processes and low emissions [8]. 3. High-quality firms in fluorochemical and carbon fiber sectors that align with "dual carbon" goals [8].