EBSCN·2025-04-08 11:12Investment Rating - The report maintains an "Accumulate" rating for the oil and petrochemical industry [5]. Core Viewpoints - The importance of energy and food security has become increasingly prominent, with a long-term positive outlook on "the three oil giants" and Sinochem Group [1]. - The escalation of the US-China trade conflict highlights the significance of strategic resource supply security, emphasizing the role of state-owned enterprises in ensuring national security [1][4]. - China's high dependence on foreign oil and gas resources necessitates increased domestic production to safeguard energy security, with "the three oil giants" responding to national calls for increased reserves and production [2][20]. Summary by Sections Section 1: US-China Trade Conflict and Strategic Resource Supply - The US has imposed significant tariffs on imports from China, which may lead to further decoupling in trade, technology, and finance [1][14]. - The self-supply of strategic resources in China is crucial in this context, with state-owned enterprises playing a vital role in supplying oil, natural gas, and agricultural chemicals [1][14]. Section 2: High Dependence on Foreign Oil and Gas Resources - In 2024, China's crude oil import dependence is projected to be 72%, and natural gas import dependence is expected to be 43% [2][15]. - "The three oil giants" are increasing capital expenditures to enhance upstream production, with a compound annual growth rate (CAGR) of 6.6% from 2018 to 2024 [2][19]. - Capital expenditure plans for 2025 include CNY 210 billion for China National Petroleum Corporation, CNY 76.7 billion for Sinopec, and CNY 130 billion for China National Offshore Oil Corporation [20]. Section 3: Ensuring Food Security and Benefits for Sinochem's Agricultural and Chemical Enterprises - The Chinese government has set a grain production target of approximately 1.4 trillion jin for 2025, indicating a strong focus on food production [3]. - The area planted with grain crops is expected to reach about 11.9 million hectares in 2024, reflecting a year-on-year growth of approximately 0.29% [3][31]. - Sinochem Group's agricultural and chemical enterprises are well-positioned to benefit from the increasing demand for agricultural inputs due to the stable expansion of planting areas [3][34]. Section 4: Investment Recommendations - The report suggests focusing on the following companies: China National Petroleum Corporation, Sinopec, China National Offshore Oil Corporation, and their respective oil service engineering subsidiaries [4][39].