PETROCHINA(601857) -·2025-01-17 02:53Investment Rating - The report maintains a "Buy" rating for China Petroleum A with a target price of RMB 12.80 per share [4][5]. Core Insights - The natural gas business is performing well, while the refining business is slightly under pressure due to weak demand for refined oil products. Overall, the upstream business is expected to remain stable in 2024, with a notable performance in natural gas [2][3]. - The company plans to maintain a capital expenditure intensity of RMB 250-300 billion in 2025 and will continue to focus on shareholder returns [2][3]. Business Segment Summary - Upstream: The international oil price is expected to be slightly lower than in 2023, but the upstream business is projected to perform steadily, with natural gas production expected to grow by over 3% year-on-year [3]. - Natural Gas: The natural gas business shows strong growth, with sales increasing rapidly and domestic prices slightly rising year-on-year. Import losses are also decreasing [3]. - Refining: The refining sector is facing challenges due to low domestic demand for refined oil, but the overall operational load remains high. Strict management of consumption tax and enhanced management of crude oil imports may benefit the refining business [3]. - Chemicals: Despite a general downturn in the domestic chemical industry, the company has maintained good profitability through optimization of oil sources, cost reduction, and leveraging ethane project advantages [3]. Valuation and Financial Metrics - The target price of RMB 12.80 per share is derived using a sum-of-the-parts (SOTP) valuation method, with a WACC set at 6%. The report indicates a 30% discount to the NAV of China Petroleum A [4][10]. - Key financial metrics include projected net profits of RMB 171.719 billion for 2024 and earnings per share (EPS) of RMB 0.94 [7]. The company is expected to maintain a dividend yield of approximately 5.3% in 2024 [8].