Source: Wall Street
Author: Zhang Jin

On March 7, three barrels of oil erupted.$China Petroleum & Chemical Corporation (600028.SH)$Up nearly 7% in intraday trading, share prices hit a four-year high$Petrochina (601857.SH)$The stock rose nearly 6% in intraday trading, and the share price hit a new nine-month high.$CNOOC Limited (600938.SH)$Intraday trading, share prices are refreshed since the listing of new highs.

In terms of Hong Kong stocks, three companies$CNOOC (00883.HK)$、$SINOPEC CORP (00386.HK)$、$PETROCHINA (00857.HK)$It also set a multi-year high.

According to a report by the Securities Times on March 6, Cai Jianchun, general manager of the Shanghai Stock Exchange, submitted three proposals at the two sessions, including promoting the reasonable return of the valuation level of central enterprises and promoting the quality improvement of listed companies of central enterprises. it suggests that the State-owned assets Supervision and Administration Commission, the Ministry of Finance and other central enterprise ministries and commissions cooperate with the China Securities Regulatory Commission to promote the reasonable return of the valuation level of central enterprises and promote the quality, value mining and promotion of listed companies of central enterprises.

On the other hand, crude oil futures on the New York Stock Exchange have rebounded recently, rising nearly 7% in the past six trading days. Analysts say that high oil prices will directly increase the revenue and profits of oil companies and ensure the prosperity of oil services in the future.

Oil companies of central enterprises are expected to meet the revaluation.

Data show that, driven by the "three-year action for the reform of state-owned enterprises", domestic central enterprises have previously begun to implement assessment requirements such as ROE, market capitalization and profit growth. Petrochina Company Limited's announcement shows that by the end of 2022, 86 reform tasks in six areas at the group level and 7666 reform tasks at the enterprise level have all been completed, with a completion rate of 100%.

In terms of valuation, Shen Wanhongyuan said that at present, the PB of Petrochina Company Limited and CNOOC is still significantly lower than that during the period of high oil prices in 2010-2014 and before the end of 2019, and the valuations of domestic industry leaders represented by private refineries are lower than those of overseas targets. At present, the price of petrochemical products as a whole is equal to the historical average. The new petrochemical industry, represented by refining and chemical industry, is committed to technological progress to drive down production costs, and will have long-term sustainable competitiveness.

Minsheng Securities also believes that oil prices are easy to rise but hard to fall, and the valuation of state-owned enterprises is expected to rise. Recently, SASAC has repeatedly proposed to promote the construction of a valuation system with Chinese characteristics. Focus on achieving the goal of "increase, stability and four improvements", and start state-owned enterprises to target world-class enterprise value creation action, while the current "three barrels of oil" valuations are all at a low level, and the future valuation of state-owned enterprises is expected to usher in reshaping space.

The oil service industry is expected to enter the upward cycle.

Shen Wanhongyuan analysis said that the current high crude oil prices in history, affected by OPEC's insistence on production cuts and Russian production decline, for domestic state-owned enterprises with upstream oil and gas resources and supporting downstream refineries, the profit performance of integrated layout is better.

The data show that the boom of the oil service industry is affected by changes in oil prices and upstream capital expenditure, which can be judged by oil prices and upstream capital expenditure, and the upstream capital expenditure decisions of oil companies are positively related to oil prices.

Cinda Securities analysis said that as the Federal Reserve will slow interest rate increases or even cut interest rates in order to revive the economy, Saudi-led OPEC+ supports oil prices by controlling production, and non-OPEC cannot increase oil prices on a large scale, oil prices are less likely to plummet and oil prices may remain high.

According to Rystad Energy, global investment in upstream oil field services will reach US $425 billion in 2022, an increase of 18.8% year-on-year, or about US $67 billion, the highest growth in 10 years.

Rystad Energy predicts that the global procurement of oil field services is expected to reach US $601 billion in 2022, an increase of 16.2% over the same period last year, and will continue to grow in the future, which is expected to grow to US $677 billion by the end of 2025. The sharp rise in oil service investment and procurement has pushed the oil service industry into an upward cycle.

Donghai Securities also believes that the oil service industry will enter the long-term upside of prosperity. At present, the overall valuation of domestic oil service companies is historically low, keeping between 1X-3X, in which the market-to-sales rate of CNOOC project since 2022 has been lower than the average value of foreign oil service industry, which is different from the stage performance of oil service in history, and the oil service industry will enter the space of long-term value repair.

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