Group 1 - The core viewpoint of the report is that China's natural gas demand growth is expected to slow down to 2% to 3% annually from 2025 to 2027, compared to a 9% compound annual growth rate over the past decade, due to weak industrial demand and the continued economic advantage of coal as a fuel source [1] - Bank of America maintains a "Buy" rating on China Petroleum & Chemical Corporation (00857) as it keeps natural gas average prices relatively stable, and the losses from imported natural gas are narrowing with the decline in oil prices [1] - The target price for PetroChina H-shares has been raised by 12% to HKD 9.5, while the A-shares (601857.SH) are also positively viewed [1] Group 2 - Kunlun Energy (00135) has had its rating downgraded from "Neutral" to "Underperform" due to the fact that industrial customers account for 75% of the company's retail natural gas sales, necessitating price reductions to maintain customer appeal amid stable costs [1]

Core Viewpoint - Bank of America Securities forecasts that China's natural gas demand growth will slow to 2% to 3% annually from 2025 to 2027, compared to a 9% compound annual growth rate over the past decade, due to weak industrial demand and the continued economic advantage of coal as a fuel source [1] Group 1: Industry Outlook - The slowdown in natural gas demand is attributed to weak industrial demand and the higher levelized cost of electricity (LCOE) for gas power generation, making the transition from coal to renewable energy more attractive [1] - The petrochemical industry in mainland China is experiencing limited progress in "anti-involution," with no significant improvement expected in fundamentals before the second quarter of next year [1] Group 2: Company Ratings and Price Targets - China Petroleum (601857) maintains a "Buy" rating due to stable average natural gas prices and reduced losses from imported gas as oil prices decline; target price for PetroChina H-shares raised by 12% to HKD 9.5, and A-shares target price increased by 10% to RMB 11 [1] - Kunlun Energy's rating has been downgraded from "Neutral" to "Underperform" due to its reliance on industrial customers for 75% of retail gas sales, necessitating price reductions to maintain customer appeal; target price decreased by 16% to HKD 7 [1]