Bank of China Securities·2025-09-08 05:41Investment Rating - The report maintains a "Buy" rating for the company, with a market price of RMB 5.69 and a sector rating of "Outperform" compared to the market [2][4]. Core Insights - The company's operating performance is under short-term pressure, with a significant decline in revenue and net profit for the first half of 2025. Revenue decreased by 10.60% year-on-year to RMB 1,409.05 billion, while net profit attributable to shareholders fell by 39.83% to RMB 21.48 billion [4][10]. - The refining business structure is continuously optimizing, and the layout of new materials is accelerating, supporting the "Buy" rating despite the challenges [6][9]. Summary by Sections Financial Performance - In the first half of 2025, the company reported total revenue of RMB 1,409.05 billion, down 10.60% from RMB 1,576.13 billion in the same period of 2024. The net profit attributable to shareholders was RMB 21.48 billion, a decrease of 39.83% from RMB 35.70 billion [10][11]. - The second quarter of 2025 saw revenue of RMB 673.70 billion, a 14.31% decline year-on-year, with net profit of RMB 8.22 billion, down 52.73% [11][12]. Business Segments - The exploration and development segment showed resilience, with an oil and gas equivalent production of 262.81 million barrels, a 2.0% increase year-on-year. The average realized sales price for crude oil was RMB 3,415 per ton, down 12.9% [9][10]. - The refining segment processed 120.94 million tons of crude oil, a decrease of 5.5% year-on-year, with a shift towards increasing the production of aviation kerosene and high-value products [9][10]. Valuation and Forecast - The report adjusts the profit forecast for 2025-2027, estimating net profits of RMB 44.79 billion, RMB 49.31 billion, and RMB 55.54 billion respectively, with corresponding EPS of RMB 0.37, RMB 0.41, and RMB 0.46. The current P/E ratios are projected at 15.4x, 14.0x, and 12.4x [6][8].