Core Viewpoint - China Petroleum & Chemical Corporation (Sinopec) announced that its Jianghan Oilfield Hongxing Shale Gas Field has confirmed reserves of 165.025 billion cubic meters of shale gas, marking the emergence of another large shale gas field in China [1] Group 1: Resource Potential and Strategic Importance - The successful approval of the shale gas reserves by the Ministry of Natural Resources highlights the resource potential of the Hongxing area and establishes a new strategic reserve for shale gas, contributing positively to national energy security [1] - The Hongxing Shale Gas Field is located in Hubei and Chongqing, with exploration depths ranging from 3,300 meters to 5,500 meters, indicating complex structural deformation and significant exploration challenges [1] Group 2: Technological Advancements and Production Improvements - Sinopec Jianghan Oilfield has made significant technological advancements, successfully opening the first billion-cubic-meter-level new layer of shale gas exploration outside the Silurian system in China [1] - The production test of a single well has improved from 89,000 cubic meters per day to 323,500 cubic meters per day, showcasing the effectiveness of the innovation efforts [1] Group 3: Future Development Plans - The company plans to enhance integrated evaluation and deployment of exploration and development, focusing on key technological breakthroughs in basic geology, development technology, and engineering processes [1] - There is an ongoing effort to expand the shale gas reserve area in the Wujiaoping formation and to cultivate a new production base for Permian shale gas [1]

Group 1 - The natural gas sector continues to strengthen, with companies such as Chengdu Gas, Huai Oil, and Shenkai Co. hitting the daily limit up [1] - Other companies that experienced gains include Shandong Molong, Xinjin Power, Beiken Energy, Qianeng Hengxin, Zhongman Petroleum, and Shouhua Gas [1]

中金发布研报称，由于昆仑能源(00135)分销与贸易板块盈利存不确定性，下调2025/2026净利润 9.9%/10.1%至60.19亿元/62.05亿元。当前股价对应2025/2026年10.1x/9.6x P/E。维持跑赢行业评级，综合 考虑盈利预测调整及公司中长期派息潜力，该行下调目标价5.9%至8.00港元，对应2025/202610.5x/10.1x P/E，较当前股价有4.6%的上行空间。 中金主要观点如下： 1H25业绩低于该行预期 公司公布1H25业绩：收入975.4亿元，YoY+5%;归母净利润31.6亿元，YoY-4%，低于该行预期，主因部 分老旧管网改造已于2024年结束，应确认补贴减少导致1H25其他收益净额同比减少49%至3.8亿元。 1H25公司天然气销售量同比+10%至291亿方，其中分销与贸易气量同比+22.6%至124亿方，零售天然气 量同比+2.2%至167亿方(工业气量+8.0%YoY)，零售气价差0.44元/方，YoY-0.01元/方，新增用户39.9万 户，YoY-11.2%，接收站平均负荷率86.8%，YoY+1.4ppt;LNG工厂平均负荷率57.1%，YoY-1 ...

Core Viewpoint - CICC has downgraded the net profit forecasts for Kunlun Energy for 2025 and 2026 by 9.9% and 10.1% to CNY 6.019 billion and CNY 6.205 billion respectively, due to uncertainties in the distribution and trading segment's profitability [1] Group 1: Financial Performance - The company's 1H25 performance was below expectations, with revenue of CNY 97.54 billion (YoY +5%) and net profit attributable to shareholders of CNY 3.16 billion (YoY -4%), primarily due to a reduction in subsidies leading to a 49% YoY decrease in other income [2] - Natural gas sales volume increased by 10% YoY to 29.1 billion cubic meters, with distribution and trading gas volume up 22.6% YoY to 12.4 billion cubic meters [2] - Retail natural gas volume grew by 2.2% YoY to 16.7 billion cubic meters, with an average retail gas price difference of CNY 0.44 per cubic meter, down CNY 0.01 YoY [2] Group 2: Operational Guidance - The company adjusted several operational guidance metrics for 2025, including retail gas volume growth to +5% YoY (previously +8% YoY) and LNG processing volume to +0-2% YoY (previously +7% YoY), reflecting weak downstream gas demand [3] - The company maintained its target for new user additions at 600,000 to 700,000 for the year and an average LNG receiving station load factor of 85-90% [3] Group 3: Profitability and Dividend Policy - The profitability of the distribution and trading business faces downward pressure, primarily due to weaker LNG spot prices impacting natural gas sales profitability [4] - Despite a slight decline in performance, the company maintained a modest increase in dividends, with potential for a long-term increase in the payout ratio to 55-60% due to strong cash flow and cash reserves [5]

Group 1 - The core event involves Russia's military response to Ukraine's provocations, including the attack on the Crimean Bridge and the oil pipeline, leading to significant military actions by Russia [1][3][5] - Ukraine's dual offensive strategy, involving drone attacks on critical infrastructure, has backfired, exposing vulnerabilities in its military operations [3][5] - The conflict has escalated into a broader geopolitical crisis, affecting energy supplies and causing price surges in the European market [13][15] Group 2 - Russia's military tactics have evolved, utilizing advanced technologies such as hypersonic missiles and drone swarms, which have changed the dynamics of modern warfare [7][16] - The repercussions of the conflict extend beyond Ukraine, with countries like Azerbaijan suffering significant losses due to their involvement and miscalculations in the geopolitical landscape [11][15] - The situation has prompted urgent discussions among European nations regarding energy security and military support for Ukraine, indicating a shift in regional stability [13][15]

Investment Rating - The report maintains a "Positive" investment rating for the oil and petrochemical industry [1] Core Insights - Domestic LNG ex-factory prices have decreased month-on-month, with a notable drop in natural gas production in China for July [3][8] - As of August 8, 2025, the domestic LNG ex-factory price was 4220.00 CNY per ton, down by 205 CNY per ton, a decrease of 4.63% [1][8] - The report highlights significant changes in natural gas inventory levels in the US and Europe, with US LNG/LPG inventory increasing and European natural gas inventory showing a month-on-month rise [3][17][22] Summary by Sections 1. Natural Gas Prices - Domestic LNG ex-factory prices have decreased month-on-month and year-on-year, with a current price of 4220.00 CNY per ton, reflecting a month-on-month decrease of 4.63% and a year-on-year decrease of 14.38% [8] - US NYMEX natural gas futures closed at 3.00 USD per million BTU, down 6.55% month-on-month but up 39.15% year-on-year [8][11] 2. Supply and Demand - China's natural gas production in July was 537720.00 tons, showing a month-on-month decrease of 10.89% [16] - The apparent consumption of natural gas in China for June was 348.89 billion cubic meters, reflecting a month-on-month decrease of 1.33% but a year-on-year increase of 3.33% [16] 3. Inventory - As of August 8, 2025, US LNG/LPG inventory was 190026 thousand barrels, with a month-on-month increase of 6.13% [17] - European natural gas inventory reached 809.07 billion kWh, showing a month-on-month increase of 15.90% but a year-on-year decrease of 18.20% [22] 4. Imports and Exports - In June, Europe’s cumulative natural gas imports were 175158.71 million cubic meters, reflecting a month-on-month decrease of 0.23% but a year-on-year increase of 13.81% [24] - China's natural gas imports in July were 1063.18 million tons, with a month-on-month increase of 0.82% but a year-on-year decrease of 2.09% [29]

Core Viewpoint - Victory Co., Ltd. reported a mixed financial performance for the first half of 2025, with a slight decline in total revenue but an increase in net profit, indicating potential operational challenges and areas for improvement [1]. Financial Performance Summary - Total revenue for the first half of 2025 was 2.158 billion yuan, a decrease of 1.64% compared to the same period in 2024 [1]. - Net profit attributable to shareholders reached 88.44 million yuan, reflecting a year-on-year increase of 7.77% [1]. - The gross profit margin was 15.52%, down 1.53% year-on-year, while the net profit margin improved to 5.18%, up 6.71% [1]. - Total expenses (selling, administrative, and financial) amounted to 194 million yuan, accounting for 8.98% of revenue, a decrease of 6.5% year-on-year [1]. - Earnings per share increased to 0.1 yuan, representing an 11.11% rise year-on-year [1]. Key Financial Metrics - Cash and cash equivalents decreased by 10.56% to 668 million yuan [3]. - Long-term borrowings decreased by 23.02% as the company adjusted its financing structure [3]. - Investment income increased by 48.12% due to higher returns from associated companies [3]. - Research and development expenses rose by 31.23%, indicating a commitment to innovation [3]. Business Model and Operational Insights - The company's return on invested capital (ROIC) was 4.34%, indicating weak capital returns [4]. - The historical median ROIC over the past decade was 5.22%, with two years of losses since its listing, suggesting a fragile business model [4]. - The company relies heavily on marketing-driven performance, necessitating a deeper analysis of the underlying drivers [4]. - Cash flow metrics indicate potential liquidity concerns, with cash and cash equivalents to current liabilities at only 30.83% [4].

Core Points - The "Ning Electric into Hunan" project has officially commenced operations, marking China's first high-voltage transmission corridor primarily for renewable energy from the "Shagehuang" wind and solar base [1] - The project spans 1616 kilometers across six provinces, with a total installed capacity of 17.64 million kilowatts, of which 13 million kilowatts are renewable energy [1] - The project is expected to replace approximately 6 million tons of standard coal annually in Hunan, reducing carbon dioxide emissions by about 18 million tons, equivalent to the annual absorption of 1 billion trees [1] Summary by Sections Project Overview - The "Ning Electric into Hunan" project started construction in June 2023 and has a renewable energy share exceeding 70%, setting a new record for similar projects [1] - The project will enable the transmission of rich green electricity from Ningxia to Hunan in just 0.0054 seconds [1] Energy Demand and Supply - During the summer of 2023, the project maintained a high power output of over 3 million kilowatts, accounting for nearly 10% of Hunan's peak load [2] - Once fully operational, the project will have a maximum transmission capacity of 8 million kilowatts, delivering between 36 billion to 40 billion kilowatt-hours of electricity annually to Hunan [2] - Hunan's total electricity consumption is projected to reach 237.4 billion kilowatt-hours in 2024, with a year-on-year growth of 4.3% [2] Future Energy Needs - Hunan's reliance on external electricity is expected to rise to nearly 30% with the project's completion, although the province will still face a "tight balance" in electricity supply [2] - Experts suggest that Hunan will need to construct 3-4 additional external electricity channels to increase the external electricity share to over 40%, which is crucial for addressing local electricity supply issues [2]

Investment Rating - The report maintains a "Buy" rating for Kunlun Energy [2][7][17] Core Views - The company reported a revenue of 97.543 billion RMB for the first half of 2025, a year-on-year increase of 4.97%, while the net profit attributable to shareholders decreased by 4.36% to 3.161 billion RMB, slightly below expectations [7] - Natural gas sales volume increased by 10.05% to 29.095 billion m³, driven by a significant rise in industrial gas consumption [7] - The average load rate of LNG receiving stations improved to 86.8%, with a substantial increase in LNG loading volume by 75.5% [7] - The company plans to increase the dividend payout ratio to 45% for 2025, with a current dividend yield of approximately 4.4% [7] Financial Data and Profit Forecast - Revenue projections for 2023 to 2027 are as follows: 177.354 billion RMB (2023), 187.046 billion RMB (2024), 193.901 billion RMB (2025E), 204.563 billion RMB (2026E), and 213.881 billion RMB (2027E) [6][8] - Net profit attributable to shareholders is forecasted to be 5.682 billion RMB (2023), 5.960 billion RMB (2024), 5.980 billion RMB (2025E), 6.254 billion RMB (2026E), and 6.573 billion RMB (2027E) [6][8] - Earnings per share (EPS) is projected to be 0.66 RMB (2023), 0.69 RMB (2024), 0.69 RMB (2025E), 0.72 RMB (2026E), and 0.76 RMB (2027E) [6][8] - The price-to-earnings (PE) ratio for 2025-2027 is estimated at 10.2, 9.8, and 9.3 respectively [7]

Core Viewpoint - Bank of America Securities has downgraded Kunlun Energy's (00135) retail gas volume growth forecast for the year from 8% to 5%, along with a reduction in natural gas profit predictions for the period [1] Group 1: Financial Forecasts - The forecast for after-tax net profit for the fiscal years 2025 to 2027 has been lowered by 6% to 7% [1] - The target price for Kunlun Energy has been adjusted from HKD 8.7 to HKD 8.3, maintaining a "Neutral" rating due to limited growth potential [1] Group 2: Financial Performance - For the first half of the year, after-tax net profit decreased by 4% year-on-year to RMB 3.2 billion, aligning with the bank's expectations, which may disappoint some investors who anticipated flat year-on-year results [1] - The interim dividend increased by 1% year-on-year, with a payout ratio of 45%, meeting expectations [1] - The pre-tax profit from natural gas and liquefied petroleum gas (LPG) sales fell by 10% and 3% year-on-year, respectively, primarily due to a decline in unit gross margins and weak retail gas volume growth [1]