Ge Long Hui·2025-09-12 12:08Core Viewpoint - The company demonstrated strong resilience in its oil and gas operations despite a decline in revenue and net profit in the first half of 2025, maintaining a "buy" rating due to its solid fundamentals and cost advantages [1][3]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 207.61 billion yuan, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of 69.53 billion yuan, down 12.79% year-on-year [1]. - The second quarter saw operating revenue of 100.75 billion yuan, a decline of 12.62% year-on-year and 5.71% quarter-on-quarter, with a net profit of 32.97 billion yuan, down 17.60% year-on-year and 9.83% quarter-on-quarter [1]. - The average Brent crude oil price fell by 15.1% year-on-year, while the company's sales gross margin was 53.5%, a slight decrease of 0.2 percentage points [1]. Production and Reserves - The company's oil and gas net production reached 384.6 million barrels of oil equivalent in the first half of 2025, a year-on-year increase of 6.1%, marking a historical high for the same period [2]. - Domestic production was 266.5 million barrels of oil equivalent, up 7.6% year-on-year, while overseas production was 118.1 million barrels of oil equivalent, an increase of 2.8% [2]. - The company achieved a reserve replacement ratio of over 130%, maintaining a reserve life of around 10 years [2]. Technological Advancements - The company has made significant technological advancements, reducing the natural decline rate of offshore oil fields to 9.5%, the best level in history, and lowering the main cost per barrel of oil equivalent to 26.94 USD [2]. - Key projects such as "Deep Sea No. 1" and others have successfully commenced production, contributing to the overall increase in output [2]. Green Transition and Shareholder Returns - The company is advancing its green and low-carbon initiatives, with significant achievements in energy efficiency and emissions reduction, including the recovery of torch gas and the establishment of China's first offshore CCUS project [3]. - The board has decided to distribute an interim dividend of 0.73 HKD per share, reflecting a payout ratio of 45.5% and a total dividend amount of approximately 31.60 billion yuan, demonstrating a commitment to shareholder returns even during a downturn in oil prices [3]. Valuation Outlook - The company is expected to maintain strong performance despite short-term fluctuations in international oil prices, with projected net profits of 138.15 billion yuan, 138.75 billion yuan, and 142.25 billion yuan for 2025 to 2027, respectively [3]. - The earnings per share (EPS) are forecasted to be 2.91 CNY, 2.92 CNY, and 2.99 CNY for the same period, with corresponding price-to-earnings ratios of 8.9x, 8.9x, and 8.7x [3].