HTSC·2025-08-27 05:27Investment Rating - The report maintains an "Accumulate" rating for both A and H shares of the company [7]. Core Insights - The company reported a 6.7% year-on-year decline in revenue for H1 2025, totaling 1,450.1 billion RMB, with a net profit attributable to shareholders of 84 billion RMB, down 5.4% year-on-year [1][2]. - The decline in profits is attributed to lower refining margins and slower growth in natural gas sales, despite a slight increase in oil production [2][3]. - The company plans to distribute a mid-term dividend of 0.22 RMB per share, representing 47.9% of H1 net profit [1]. Revenue and Profit Analysis - In H1 2025, the company's crude oil production increased by 0.3% to 476.4 million barrels, while the average selling price decreased by 14.5% to 66.21 USD per barrel [2]. - The total sales volume of refined oil was 77.83 million tons, a slight decrease of 1.5% year-on-year, with domestic sales showing a marginal increase of 0.3% [4]. - The natural gas sales volume reached 151.5 billion cubic meters, up 2.9% year-on-year, with domestic sales increasing by 4.2% [5]. Segment Performance - The oil and gas segment's operating profit decreased by 62.4 billion RMB to 856.9 billion RMB due to the significant drop in international oil prices [2]. - The refining and chemical segment saw a profit decline of 25.7 billion RMB to 110.6 billion RMB, impacted by narrowing margins and slow demand recovery [3]. - The natural gas segment's operating profit improved by 18.2 billion RMB to 186.3 billion RMB, driven by cost control and expansion into high-end customer markets [5]. Financial Forecast and Valuation - The report forecasts net profits for 2025-2027 to be 158.5 billion RMB, 161.7 billion RMB, and 168.5 billion RMB respectively, with EPS projected at 0.87, 0.88, and 0.92 RMB [6]. - The target prices are set at 10.44 RMB for A shares and 8.80 HKD for H shares, based on a PE ratio of 12.0 for A shares and 9.2 for H shares [6].