First Shanghai Securities·2024-03-27 16:00Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 21.43, indicating a potential upside of 21.8% from the current price of HKD 17.60 [2][4]. Core Insights - The company reported a total revenue of RMB 416.61 billion for 2023, a decrease of 1.33% year-on-year, and a net profit of RMB 123.84 billion, down 12.60% year-on-year, primarily due to declining international oil prices [1]. - The company achieved a net production of 678 million barrels of oil equivalent in 2023, an increase of 8.69% year-on-year, with a record high net proven reserves of 6,784 million barrels of oil equivalent [1]. - The company maintained a strong cost control with an average oil production cost of USD 28.83 per barrel, a decrease of 5.1% year-on-year [1]. - Capital expenditures for 2023 were raised to RMB 129.6 billion, an increase of 18.73% year-on-year, with plans for 2024 capital expenditures between RMB 125 billion and RMB 135 billion [1]. Summary by Sections Financial Performance - For 2023, the company reported revenues of RMB 416.61 billion and a net profit of RMB 123.84 billion, with a dividend payout of HKD 1.25 per share [1][5]. - The company forecasts revenues of RMB 440.23 billion, RMB 479.79 billion, and RMB 493.81 billion for 2024, 2025, and 2026 respectively, with net profits projected at RMB 134.57 billion, RMB 147.09 billion, and RMB 151.14 billion [2][5]. Production and Reserves - The company successfully discovered 9 new oil and gas fields and evaluated 22 oil and gas structures, maintaining its position as China's largest crude oil production base [1]. - The reserve replacement ratio reached 180%, with a stable reserve life of over 10 years for the past 7 years [1]. Cost Management - The company reported a decrease in operating costs, with a 10.7% reduction in taxes other than income tax and a 4.1% decrease in depreciation and amortization costs [1]. Capital Expenditure - The company plans to continue its strategy of increasing reserves and production while integrating green low-carbon projects with oil and gas production [1].