Investment Rating - The report maintains an "Accumulate" rating for both A and H shares of the company [8] Core Views - The company reported a total revenue of 2,864.5 billion RMB for 2025, a decrease of 2.5% year-on-year, with a net profit attributable to shareholders of 157.3 billion RMB, down 4.5% year-on-year [1][2] - The company’s Q4 revenue was 695.2 billion RMB, showing a quarter-on-quarter change of +2.2% and a year-on-year change of -3.3% [1] - The dividend per share for the year is set at 0.25 RMB, leading to a total cash dividend payout ratio of 54.7%, an increase of 2.5 percentage points from 2024 [1] - The report anticipates an increase in oil prices due to geopolitical factors, which may elevate the mid-term oil price average [6] Revenue and Profit Analysis - The company’s crude oil production increased by 0.7% to 948 million barrels, while the average selling price decreased by 14.2% to 64.11 USD per barrel [2] - The natural gas sales volume rose by 4.5% to 5,363.2 billion cubic feet, with a stable unit operating cost of 12.04 USD per barrel [2] - The refining segment saw a profit increase of 13.4% to 24.25 billion RMB, driven by improved refining margins [3] - The total sales volume of refined oil was 16,081 million tons, with domestic sales slightly declining by 0.4% [4] Natural Gas Segment Performance - The company sold 3,147 billion cubic meters of natural gas, a year-on-year increase of 7.0%, with domestic sales up by 5.6% [5] - The natural gas segment's operating profit grew by 12.6% to 60.8 billion RMB due to effective cost control and optimized resource procurement [5] Future Earnings Forecast - The report projects crude oil prices for 2026-2028 at 84/75/70 USD per barrel, with net profit estimates for 2026 and 2027 raised to 199.1 billion RMB and 194.5 billion RMB, respectively [6] - The expected earnings per share (EPS) for 2026 is 1.09 RMB, with a price-to-earnings (P/E) ratio of 14.5 for A shares and 11.0 for H shares [6] - The target prices are set at 15.81 RMB for A shares and 13.63 HKD for H shares, reflecting an increase from previous estimates [6]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][22]. Core Views - The company demonstrates significant profit resilience, with a projected dividend payout ratio of 54.7% in 2025. Despite a slight decline in revenue and net profit, the company benefits from increased oil and gas production, higher natural gas sales prices, and improved refining and product oil profits [1][8]. - The company’s operating cash flow is expected to grow year-on-year, with total dividends remaining at a historical high level of 860.2 billion yuan in 2025 [1][8]. - The oil and gas supply capability continues to strengthen, with rapid development in the new energy sector. The company achieved record-high oil and gas production, with a total equivalent production of 1,841.9 million barrels of oil equivalent in 2025 [10][18]. Financial Performance Summary - In 2025, the company is projected to achieve revenue of 2.86 trillion yuan (down 2.5% year-on-year) and a net profit of 157.3 billion yuan (down 4.5% year-on-year) [1][3]. - The average Brent crude oil price is expected to be 68.2 USD/barrel in 2025, a decrease of 11.6 USD/barrel (down 14.6% year-on-year) [1][8]. - The company’s capital expenditure for 2025 is estimated at 2,690.9 billion yuan (down 2.5% year-on-year), with a forecasted increase to 2,794 billion yuan in 2026 (up 3.8% year-on-year) [2][18]. Segment Performance - The natural gas segment is optimizing its resource pool structure, achieving an operating profit of 54.01 billion yuan in 2025 (up 25.5% year-on-year) with total natural gas sales of 3,147.1 billion cubic meters (up 7.0% year-on-year) [2][18]. - The refining and sales segments are showing improved profitability, with operating profits of 21.7 billion yuan (up 19.1% year-on-year) and 17.55 billion yuan (up 6.4% year-on-year) respectively [10][16]. - The chemical products segment is also experiencing growth, with a significant increase in new material production, achieving an operating profit of 2.54 billion yuan [10][16].

Investment Rating - The investment rating for the company is "Outperform the Market" [4][22]. Core Views - The company demonstrates significant profit resilience, with a projected dividend payout ratio of 54.7% in 2025. Despite a slight decline in revenue and net profit, the company benefits from increased oil and gas production, higher natural gas sales prices, and improved refining and product oil profits [1][8]. - The company’s operating cash flow is expected to grow year-on-year, with total dividends remaining at a historical high level of 860.2 billion yuan in 2025 [1][8]. - The oil and gas supply capability continues to strengthen, with rapid development in the new energy sector. The company achieved record-high oil and gas production, with a total equivalent production of 1,841.9 million barrels of oil equivalent in 2025 [10][18]. Financial Performance Summary - In 2025, the company is projected to achieve revenue of 2.86 trillion yuan (down 2.5% year-on-year) and a net profit of 157.3 billion yuan (down 4.5% year-on-year) [1][3]. - The average Brent crude oil price is expected to be 68.2 USD/barrel in 2025, a decrease of 11.6 USD/barrel (down 14.6% year-on-year) [1][8]. - The company’s capital expenditure for 2025 is estimated at 2690.9 billion yuan (down 2.5% year-on-year), with a forecasted increase to 2794 billion yuan in 2026 (up 3.8% year-on-year) [2][18]. Segment Performance - The natural gas segment is optimizing its resource pool structure, achieving an operating profit of 54.01 billion yuan in 2025 (up 25.5% year-on-year) with total natural gas sales of 314.71 billion cubic meters (up 7.0% year-on-year) [2][18]. - The refining and sales segments are showing improved profitability, with operating profits of 21.7 billion yuan (up 19.1% year-on-year) and 17.55 billion yuan (up 6.4% year-on-year) respectively [10][18]. - The chemical products segment is also experiencing growth, with a significant increase in new material production, achieving an operating profit of 2.54 billion yuan [10][18].

Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [6]. Core Views - The major shareholder, China National Petroleum Corporation, plans to increase its stake in the company by investing between RMB 28 billion and RMB 56 billion, reflecting confidence in the company's long-term development [1][2]. - The company demonstrates resilience in operations amid oil price fluctuations, with a projected average Brent crude oil price of USD 79.86 per barrel in 2024, a decrease of 2.8% year-on-year. The company is expected to achieve a net profit attributable to shareholders of RMB 173 billion in 2025, marking a 2.0% year-on-year increase, and maintain free cash flow above RMB 100 billion for three consecutive years [2][3]. - The company is focusing on enhancing exploration and production capabilities, with a target for oil and gas equivalent reserve replacement rate of 98.2% in 2024, an increase of 15.7 percentage points year-on-year. Oil production is expected to reach 941.8 million barrels, a 0.5% increase year-on-year, while natural gas production is projected to rise by 4.1% to 145.4 billion cubic meters [3]. Summary by Sections Investment Rating - A-shares: Buy (maintained) at a current price of RMB 7.70 - H-shares: Buy (maintained) at a current price of HKD 5.47 [6]. Financial Forecasts - The company expects revenues to decline from RMB 30,110 million in 2023 to RMB 28,981 million in 2025, with a net profit increase from RMB 1,611 million in 2023 to RMB 1,730 million in 2025 [5][11]. - Earnings per share (EPS) is projected to grow from RMB 0.88 in 2023 to RMB 0.95 in 2025 [5][11]. Operational Highlights - The company is enhancing its integrated industrial chain advantages to withstand oil price volatility, with a focus on refining and chemical transformation [2][3]. - The company aims to optimize its natural gas business and improve profitability, with a projected 25.5% year-on-year increase in natural gas sales operating profit for 2024 [3].