PetroChina_ Risk Reward Update

Summary of PetroChina Conference Call Company Overview - Company: PetroChina (0857.HK) - Industry: China Energy & Chemicals - Stock Rating: Overweight - Price Target: HK$8.30 - **Current Price (as of March 11, 2025)**: HK$5.85 - 52-Week Range: HK$8.60 - HK$5.34 - Fiscal Year Ending: December 2023 Key Financial Metrics - EPS Estimates: - 2023: Rmb 0.9 - 2024e: Rmb 0.9 - 2025e: Rmb 0.9 - 2026e: Rmb 0.9 - Sales/Revenue: - 2023: Rmb 2,656,383 million - 2024e: Rmb 3,129,822 million - EBITDA: - 2023: Rmb 420,896 million - 2024e: Rmb 683,191 million - Net Income: - 2023: Rmb 155,488 million - 2024e: Rmb 175,900 million Investment Thesis - Best Yield Play: PetroChina is considered the best yield play in the energy sector due to its gas price reform and rich natural gas resources, which are crucial for China's carbon neutrality goals [10][4] - Gas Segment Potential: The value of the gas segment is expected to increase as market-oriented pricing mechanisms develop, with imported gas losses manageable in the current oil price environment [10][4] - Downstream Profitability: The downstream businesses have shown rapid profitability improvements in recent years [11][10] Risk and Reward Analysis - Price Target Scenarios: - Base Case: Price target of HK$8.30 (+41.88$95/bbl, implying a price target of HK$16.70 (+185.47$60/bbl, with a lower potential for the gas segment [14][10] Market Conditions - Oil Price Forecast: - Brent crude oil prices are expected to average US$79/bbl in 2024, US$74/bbl in 2025, and US$71/bbl in 2026 [8][16] - Gas Volume Growth: Anticipated growth of 5.1% in 2023, with a steady 6% growth expected in subsequent years [16][10] Consensus and Analyst Ratings - Consensus Rating Distribution: - 94% Overweight - 6% Equal-weight - 0% Underweight [13][10] Key Risks - Upside Risks: Stronger-than-expected Chinese economic growth, higher oil prices, and increased gas demand due to reforms [21][20] - Downside Risks: Weaker-than-expected economic growth, lower oil prices, and inflationary pressures [21][20] Important Dates - Annual Shareholders Meeting: Scheduled for June 9, 2025 [16][10] This summary encapsulates the key points from the conference call regarding PetroChina, highlighting its financial outlook, investment thesis, market conditions, and associated risks.