Shenwan Hongyuan Securities·2025-05-09 09:42Investment Rating - The report maintains a positive outlook on the petrochemical industry for 2024 and Q1 2025, indicating a recovery in downstream refining and polyester sectors while upstream oil and gas sectors continue to perform well [1][20]. Core Insights - Oil prices experienced a decline in Q4 2024 followed by a slight recovery in Q1 2025, with Brent crude averaging $74.0 per barrel in Q4 2024, down 6.0% quarter-on-quarter and 10.7% year-on-year, and $75.0 per barrel in Q1 2025, up 1.3% quarter-on-quarter but down 8.3% year-on-year [1][20]. - The upstream oil and gas sector remains robust, with Q1 2025 revenues reaching CNY 16,413.7 billion, a 5.9% increase quarter-on-quarter despite a 6.8% year-on-year decline, and net profits of CNY 1,058.0 billion, up 63.9% quarter-on-quarter [1][20]. - Downstream refining and chemical sectors are showing signs of recovery, with Q1 2025 revenues of CNY 17,279.3 billion, a 4.9% increase quarter-on-quarter, and net profits of CNY 703.6 billion, up 64.1% quarter-on-quarter [1][20]. Summary by Sections Upstream Oil and Gas Sector - The upstream oil and gas sector continues to maintain high profitability, with Q1 2025 net profit margins at 20.6%, reflecting cost improvements from efficiency measures [1][20]. - The overall revenue for the upstream sector in Q4 2024 was CNY 15,497 billion, down 6.2% year-on-year, while Q1 2025 saw a revenue of CNY 16,413.7 billion, down 6.8% year-on-year but up 5.9% quarter-on-quarter [1][20]. Downstream Refining Sector - The downstream refining sector has shown recovery with Q1 2025 revenues of CNY 17,279.3 billion, down 7.3% year-on-year but up 4.9% quarter-on-quarter, and net profits of CNY 703.6 billion, reflecting a significant quarter-on-quarter increase [1][20]. - The gross margin for the refining sector in Q1 2025 was 17.4%, indicating a slight year-on-year improvement despite a quarter-on-quarter decline [1][20]. Price Trends and Margins - The report highlights that the price differentials for various petrochemical products have shown fluctuations, with Q4 2024 and Q1 2025 seeing changes in margins for products like propylene and acrylic acid [1][10][16]. - The Brent crude oil price is projected to maintain a mid-to-high level in 2025, with expectations of a "U" shaped recovery in oil prices, supporting the overall profitability of oil companies [1][20].