Investment Rating - The report maintains an "Overweight" rating for the company [9][10]. Core Views - The company's Q1 revenue was 735.4 billion RMB, showing a decrease of 7% quarter-on-quarter but an increase of 4% year-on-year. The net profit attributable to shareholders was 13.3 billion RMB, which was above expectations due to reduced losses in the chemical segment and better-than-expected performance in non-oil marketing [1]. - The report highlights that traditional business profitability is under pressure, while non-oil business shows promising growth [1]. - The refining segment's profitability is under pressure due to high crude oil inventory, leading to a significant decline in refining margins [3]. - The marketing segment's profit declined due to weak domestic demand for refined oil products, although non-oil business profits increased [4]. - The chemical segment has reduced losses and is expected to benefit from a market recovery [5]. Summary by Sections Financial Performance - Q1 revenue was 735.4 billion RMB, with a quarter-on-quarter decrease of 7% and a year-on-year increase of 4%. The net profit attributable to shareholders was 13.3 billion RMB, with a significant year-on-year increase of 119% [1]. - Q1 crude oil production was 69.5 million barrels, down 1.2% year-on-year, while natural gas production increased by 5.1% to 368.4 billion cubic feet [2]. - The refining segment processed 62.1 million tons of crude oil, down 1.8% year-on-year, with refining margins narrowing to 6.2 USD per barrel, a decrease of 13.9% [3]. Segment Analysis - The marketing segment saw total domestic refined oil sales of 43.2 million tons, down 5.3% year-on-year, with retail sales declining by 6.4% [4]. - The chemical segment produced 386, 568, and 260 million tons of ethylene, synthetic resin, and synthetic fiber respectively, with year-on-year increases of 18%, 17%, and 27% [5]. Profitability Forecast - The report forecasts net profits attributable to shareholders for 2025, 2026, and 2027 to be 53.9 billion, 58.8 billion, and 61.6 billion RMB respectively, with EPS projected at 0.44, 0.48, and 0.51 RMB [6]. - The target prices are set at 6.82 RMB and 4.73 HKD for A and H shares respectively, based on a PE ratio of 15.5 and 10.0 for 2025 [6].

Investment Rating - The investment rating for the company is "Buy" [9][10] Core Views - The company's Q1 revenue was 735.4 billion RMB, showing a decrease of 7% quarter-on-quarter but an increase of 4% year-on-year. The net profit attributable to shareholders was 13.3 billion RMB, which is a decrease of 28% quarter-on-quarter but an increase of 119% year-on-year [1] - The report highlights that the traditional business faces profit pressure, while non-oil business shows promising performance. The chemical sector has reduced losses, and the marketing segment's non-oil business has exceeded expectations [1][4][5] - The report maintains a positive outlook for the company's profitability recovery in the refining industry post-2025, supported by its integrated advantages and transformation into new materials [6] Summary by Sections Financial Performance - Q1 oil production was 69.5 million barrels, down 1.2% year-on-year, with an average oil price of 71.5 USD/barrel, down 5.2%. Natural gas production increased by 5.1% to 368.4 billion cubic feet [2] - The refining segment's Q1 operating profit dropped significantly by 44.3 billion RMB to 19.8 billion RMB due to high oil inventory costs, with refining margins narrowing to 6.2 USD/barrel, down 13.9% year-on-year [3] - The marketing segment's total domestic refined oil sales decreased by 5.3% year-on-year, leading to a profit drop of 39.8 billion RMB to 39.7 billion RMB [4] Chemical Sector - The chemical segment's production of ethylene, synthetic resin, and fiber monomers increased by 18%, 17%, and 27% year-on-year, respectively. The segment's losses were reduced by 4.7 billion RMB year-on-year [5] Profit Forecast and Valuation - The company maintains profit forecasts for 2025-2027 at 53.9 billion RMB, 58.8 billion RMB, and 61.6 billion RMB, respectively, with EPS projected at 0.44, 0.48, and 0.51 RMB [6] - The target prices are set at 6.82 RMB for A-shares and 4.73 HKD for H-shares, reflecting a valuation of 15.5x PE for 2025 [6]