\u3000\u3000 Petrochina Company Limited(601857) (601857)
Event:
The company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach 90-94 billion yuan in 21 years, with a year-on-year increase of 374% – 395%; It is estimated that the net profit attributable to the parent company after deducting non-profit is RMB 98-108 billion, with a year-on-year increase of RMB 110-120 billion. In 21q4, the net profit attributable to the parent company was RMB 14.9-18.9 billion in a single quarter, with a year-on-year increase of 67% – 111% and a month-on-month decrease of 14% – 33%.
Comments:
The oil price continued to rise in the past 21 years, and the volume and price of the company’s oil and gas business rose simultaneously, with its performance reaching a seven-year high
In 2021, international crude oil prices continued to fluctuate upward, China’s macro-economy recovered steadily, the prosperity of the refining and chemical industry increased, the demand for oil and gas products continued to increase, and the company’s profitability increased significantly. The average price of 21-year oil distribution futures was US $70.94/barrel, up 64% year-on-year. In the 21st year, the company vigorously strengthened oil and gas exploration and development, continuously improved the integration level of refining and marketing, coordinated and optimized the allocation of natural gas resources, steadily promoted the business layout of new energy and new materials, and gave full play to the synergy of business sectors. The company’s oil and gas business has made steady progress. The sales of main oil and gas products have increased both in volume and price, superimposed cost reduction and efficiency increase, and effectively controlled operating costs. The company’s performance in 21 years has increased significantly year-on-year, reaching a new high in recent seven years.
Under the background of “carbon neutralization”, the development space of natural gas industry is broad, and the leader of self-produced gas is expected to fully benefit
Natural gas is a fossil energy with high calorific value and low carbon emission, and the carbon emission per unit calorific value is only about 60% of that of coal. In the context of “carbon neutrality”, China’s natural gas industry will usher in new growth momentum. Under the constraints of China’s “double carbon” goal, natural gas, as a clean primary fossil energy, has broad development space in the future. In addition, as China’s carbon trading market matures, the future rise in carbon prices will enhance the development value of the natural gas industry. According to the calculation of Chinese scholar Xu Bo and others in the analysis of natural gas consumption trend in China’s 14th five year plan, China’s natural gas demand CAGR is expected to reach 5.8% from 2021 to 2025. The company is the world’s top oil company, with proven reserves of 5.2 billion barrels of crude oil and 76 trillion cubic feet of natural gas. The annual production of crude oil exceeds 900 million barrels and the production of natural gas exceeds 4 trillion cubic feet. As a leading natural gas production enterprise in China, the company is expected to fully benefit from the growth of the natural gas industry.
Focus on CCUs cutting-edge technology and help the company’s low-carbon development
The “double carbon” goal promotes the transformation of China’s energy structure to green and low-carbon, and CCUs has become an important channel to achieve carbon neutrality. The company has significant resources and technical advantages in the development of CCUs industry, and has the largest number and scale of ccus-eor industrial projects in China. Among them, carbon dioxide flooding in Jilin oilfield is the first full process demonstration project in China, and the cumulative storage of carbon dioxide has exceeded 2 million tons; Xinjiang CCUs center led by the company is one of the first five CCUs industry promotion centers deployed by the oil and gas industry climate initiative organization in the world. During the 14th Five Year Plan period, Petrochina Company Limited(601857) will carry out carbon dioxide oil displacement scale demonstration in four oilfields of Jilin, Daqing, Changqing and Xinjiang, start carbon dioxide oil displacement and buried storage pilot tests in six oilfields of Liaohe, Eastern Hebei, Dagang, North China, Turpan Hami and southern China, and strive to achieve an injection scale of 5 million tons and an oil production scale of 1.4 million tons by the end of the 14th five year plan, Continue to maintain China’s leading position. In the future, with the gradual liberalization of carbon tax, the company’s CCUs business is expected to benefit for a long time and become the growth pole of the company’s green and low-carbon energy industry.
Energy transformation is at the right time, and the new energy field is united with China Petroleum & Chemical Corporation(600028)
On December 1, 2001, Petrochina Company Limited(601857) and China Petroleum & Chemical Corporation(600028) signed a strategic cooperation framework agreement in Beijing. The two sides jointly undertake the important task of national oil and gas security and will make new contributions to national energy security. At the same time, taking the signing of the agreement as an opportunity, the two sides will comprehensively deepen cooperation in oil and gas business, new energy, informatization and digitization. Although China has become the world’s second-largest oil consumer and the world’s third-largest natural gas consumer, China’s dependence on foreign oil and natural gas is very high. The signing of the strategic cooperation framework agreement is an important step towards controlling China’s energy security. Increasing reserves and production is expected to usher in policy overweight and promote the further rise of oil and gas reserves and production. Under the strategic goal of carbon peak and carbon neutralization, the world will gradually enter the new energy era, the proportion of oil and gas consumption will continue to decline, and the transformation of oil and gas enterprises is the general trend. The signing of this agreement has significant strategic significance, which shows that Petrochina Company Limited(601857) and China Petroleum & Chemical Corporation(600028) are determined to actively embrace carbon neutralization and accelerate the transformation to new energy fields such as hydrogen energy and photovoltaic by relying on capital and technological advantages, among which hydrogen energy field is the key field for the transformation of oil and gas enterprises. The equipment investment required for green hydrogen production is huge, with a capacity of 50000 T / A. in the project, only the two links of power production and hydrogen production need 7-10 billion yuan of financial support. The combination of the two oil companies with strong capital is expected to accelerate the development of hydrogen energy industry.
The valuation is at the bottom, and oil and gas giants have large valuation repair space
As of January 12, 2022, Petrochina Company Limited(601857) A and H shares’ pb-mrq were 0.77 and 0.45 respectively, at the historical bottom range. In 21, SASAC issued the notice on matters related to investor communication of listed companies controlled by central enterprises in 2021, which indicates that the implementation of investor communication in 2021 will be included in the assessment in an appropriate form. The reason why SASAC adjusted the assessment indicators of central enterprises is mainly to promote the reform and development of relevant state-owned enterprises. The company is a leading oil and gas producer and distributor in China’s oil and gas industry and one of the world’s largest oil companies. It has significant advantages in refining and marketing integration, and there is a large margin of safety and repair space in valuation.
Earnings forecast, valuation and rating
Considering the decline in the price of 21q4 natural gas and the decline in the net profit attributable to the parent company in 21q4, we lowered the company’s profit forecast for 21 years. We are still optimistic about the prosperity of the oil and gas industry. The policy of “increasing reserves and increasing production” continues to promote, the company’s oil and gas output is expected to continue to grow and its profitability is expected to improve steadily. Therefore, the company’s profit forecast for 22-23 years is maintained, It is estimated that the company’s net profit attributable to the parent company in 21-23 years will be 92.393 (down 3%) / 99.21/105.408 billion yuan, equivalent to EPS of 0.50, 0.55 and 0.58 yuan / share respectively. The company is a leading oil and gas enterprise in China and is expected to fully benefit from the growth of the natural gas industry in the future. Therefore, we maintain the “buy” rating of a + H shares.
Risk tip: there is a significant downward risk in crude oil price and a downward risk in the prosperity of oil refining and chemical industry.
