EBSCN·2025-04-30 13:14Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company, with current prices at 7.94 CNY and 5.80 HKD respectively [1]. Core Views - The company reported a steady performance in Q1 2025, with total revenue of 753.1 billion CNY, a year-on-year decrease of 7.3% but a quarter-on-quarter increase of 10.5%. The net profit attributable to shareholders was 46.8 billion CNY, reflecting a year-on-year increase of 2.3% and a quarter-on-quarter increase of 45.6% [5][6]. - The integrated industry chain of the company helps to withstand oil price fluctuations, leading to stable growth in net profit for Q1 2025. The average Brent crude oil price was 74.98 USD/barrel, down 8.3% year-on-year but up 1.3% quarter-on-quarter [6][12]. Summary by Sections Financial Performance - In Q1 2025, the company achieved an operating cash flow of 139.4 billion CNY, a year-on-year increase of 25.5%. The debt-to-asset ratio improved to 37.9%, down 1.1 percentage points year-on-year [6][12]. - The upstream business benefited from increased natural gas production and effective cost control, achieving an operating profit of 46.1 billion CNY, up 7.0% year-on-year. The average price of crude oil was 70.00 USD/barrel, down 7.2% year-on-year [7][8]. Segment Performance - The natural gas sales business reported an operating profit of 13.5 billion CNY, up 9.7% year-on-year, driven by increased sales volume and improved profitability across the industry chain. Total natural gas sales reached 86.4 billion cubic meters, a year-on-year increase of 3.7% [8][10]. - The refining and chemical segment faced challenges, with an operating profit of 5.4 billion CNY, down 33.6% year-on-year, primarily due to narrowing margins in refined products and lower profitability in chemical products [10][11]. Long-term Growth Potential - The company plans to maintain high capital expenditures, with a budget of 210 billion CNY for upstream investments in 2025. The expected growth in oil and gas equivalent production is 1.6% for the year [12][14]. - The company aims to transition towards a comprehensive energy service provider, enhancing its focus on high-value products in the chemical sector and increasing the proportion of high-margin products [12][14]. Shareholder Confidence - The major shareholder, China National Petroleum Corporation, plans to increase its stake in the company, reflecting confidence in its future development. The company maintains a strong dividend policy, with a stable dividend yield that enhances its investment value [13][14]. Earnings Forecast - The report slightly lowers the earnings forecast for the company, projecting net profits of 166.1 billion CNY, 171.2 billion CNY, and 175.7 billion CNY for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.91, 0.94, and 0.96 CNY per share [14][16].