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<Research>CLSA Projects 3 Oils' 3Q Profit to Sink QoQ; Top Pick PETROCHINA
Recommend 21 Positive 28 Negative 16 |
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The Chinese oil companies are poised to announce their 3Q24 results next week, CLSA said in a report. Given that oil prices sank 5% QoQ, a YoY decline in 3Q24 earnings would be well expected. However, the broker believed that the diverging QoQ earnings trend for 3Q24 could surprise the market, and insisted that PETROCHINA (00857.HK) is the top pick, while SINOPEC CORP (00386.HK) is the least preferred stock. For PetroChina, the broker expected a net profit of RMB38.9 billion in 3Q24, down 16% YoY and 9% QoQ. Compared to Sinopec, PetroChina's performance is more resilient QoQ, mainly due to the stable natural gas business, which is less affected by rattled oil prices, and gradual pivot towards new materials in its chemical division resulting in better chemical profitability. For CNOOC (00883.HK), the broker projected a net profit of RMB37.2 billion in 3Q24, down 7% QoQ and up 10% YoY. In addition, due to the 1% QoQ appreciation of the RMB, the total cost per barrel may face a slight QoQ hike, but it will still be below US$30/ BOE. For Sinopec, the broker estimated a net profit of RMB8.9 billion in 3Q24, a YoY and QoQ decrease of 50% and 51% respectively. Compared to PetroChina and CNOOC, the QoQ shrinkage will be more notable due to the quarterly crude oil inventory loss caused by the end-of-quarter oil price adjustment and weak downstream profit due to gloomy domestic consumption. The latest ratings and target prices of the sector are listed in a separate table. AAStocks Financial News |
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