HTSC·2024-08-27 02:03Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of HKD 6.81 and RMB 8.99 [2][8]. Core Insights - The company reported a steady growth in H1 earnings, with a net profit attributable to shareholders of RMB 35.7 billion, representing a year-on-year increase of 2% [2]. - The company plans to distribute a mid-term dividend of RMB 0.146 per share (tax included) and intends to repurchase A-shares worth between RMB 800 million to 1.5 billion for cancellation and capital reduction [2]. - The projected net profits for 2024-2026 are RMB 75 billion, RMB 76.9 billion, and RMB 78.1 billion, respectively, with corresponding EPS of RMB 0.62, RMB 0.63, and RMB 0.64 [2]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of RMB 1,576.1 billion, a decrease of 1% year-on-year, and a net profit of RMB 35.7 billion, with a non-recurring profit of RMB 35.6 billion, marking a 2% increase year-on-year [2]. - The Q2 revenue was RMB 786.2 billion, down 2% year-on-year and 0.5% quarter-on-quarter, with a net profit of RMB 17.4 billion, up 16% year-on-year but down 5% quarter-on-quarter [2]. Production and Cost Efficiency - The company's crude oil production in H1 2024 was 140.5 million barrels, up 0.6% year-on-year, with an average crude oil price of RMB 3,981 per ton, up 6% year-on-year [3]. - Natural gas production reached 700.6 billion cubic feet, also up 6% year-on-year, while the average price for natural gas was RMB 1,895 per thousand cubic meters, down 2.8% year-on-year [3]. - The oil and gas operating cost was RMB 753.4 per ton, a decrease of 0.4% year-on-year, and the exploration and development segment reported an operating profit of RMB 26.83 billion, a year-on-year increase of RMB 5 billion [3]. Refining and Marketing - The company's crude oil processing volume in H1 2024 was 126.69 million tons, a slight increase of 0.1% year-on-year, but refining margins decreased by 10.7% year-on-year to RMB 316 per ton due to geopolitical factors and weak market demand [4]. - The total domestic sales of refined oil products were 90.1 million tons, down 2.5% year-on-year, with retail sales declining by 4.7% [5]. Chemical Sector - The chemical segment saw a significant reduction in losses, with an ethylene production of 6.496 million tons, down 5.5% year-on-year, and a profit from joint ventures increasing by RMB 4.12 billion year-on-year to RMB 6.73 billion [6].