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<Research> Citi Expects PETROCHINA (00857.HK) to Outperform SINOPEC CORP (00386.HK) in 2Q26; TP HKD10, Buy
Recommend 6 Positive 8 Negative 2 |
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Citi said in a research report that PETROCHINA (00857.HK) recorded a 2% YoY increase in net profit to RMB48.3 billion in 1Q26. During the period, exploration and production (E&P) performance missed expectations as realized oil prices fell 8.5% YoY, below forecasts. The refining segment did not see a QoQ surge as seen at SINOPEC CORP (00386.HK), as SINOPEC CORP had procured crude oil in advance and enjoyed substantial inventory gains. In addition, PETROCHINA's natural gas sales EBIT rose 40% YoY in 1Q26, serving as a highlight. The growth was mainly driven by a 3.5% YoY increase in sales volume and a 3% YoY decline in competitive pipeline gas import costs, offsetting the 4% YoY drop in average selling prices. The broker expects PETROCHINA's earnings in 2Q26 to again Outperform those of SINOPEC CORP, supported by recent rises in liquefied natural gas prices that enhance gas competitiveness, alongside strengthening E&P and oil businesses. Although China may relax refined oil export restrictions, this would have limited impact in easing domestic gross refining margin (GRM) pressure for both oil majors. Citi believes PETROCHINA will benefit from stable Russian crude oil supplies and is preferred over SINOPEC CORP. The broker assigned a TP of HKD10 and a Buy rating on PETROCHINA. (ss/u) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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