Investment Rating - The investment rating for Zhongman Petroleum (603619.SH) is "Buy" [1] Core Views - The report highlights a year-on-year decline in profits for the first half of 2025, primarily due to a decrease in international oil prices, currency exchange losses, and increased management costs related to the startup of the Iraq oilfield project [4] - The report anticipates that the overseas projects will positively impact future operating performance, with a focus on the integration of business layouts to enhance oil and gas reserves [4] Financial Performance Summary - In the first half of 2025, the company achieved revenue of 1.981 billion yuan, a year-on-year increase of 3.29%, and a net profit attributable to shareholders of 300 million yuan, a year-on-year decrease of 29.81% [1] - The average oil price realized was 48 USD/barrel, down approximately 6 USD/barrel year-on-year, while the average production cost was 15 USD/barrel, an increase of about 2 USD/barrel year-on-year [4] - The company’s cash flow from operations was 429 million yuan, a year-on-year decrease of 11.96% [1] Production and Project Development - The overseas projects, particularly in the Kenge oilfield, are expected to be the main drivers of production growth, with production volumes for the first half of 2025 showing significant increases [4] - The Iraq project has completed the exploration and development plan and is progressing well, with successful bids for new projects in Algeria [4] Earnings Forecast - The forecast for net profit attributable to shareholders for 2025-2027 is 651 million, 850 million, and 1.147 billion yuan, with year-on-year growth rates of -10.3%, 30.5%, and 35.0% respectively [4] - The expected earnings per share (EPS) for the same period is projected to be 1.41, 1.84, and 2.48 yuan, with corresponding price-to-earnings (P/E) ratios of 14.23, 10.90, and 8.08 [4]