Author: Changliu
Source: Securities Times
With the international oil price above 80 US dollars per barrel, An and H share oil and gas plates collectively pulled up on March 7, with three barrels of oil rising significantly.
Since the beginning of this year, Hong Kong shares of three barrels of oil have risen by an average of 25%. Of the three barrels of oil on A-shares, Petrochina underperformed, rising nearly 14 per cent this year, while China Petroleum & Chemical and CNOOC both rose more than 20 per cent. Obviously, the investment market has begun to "reshape" the leading state-owned enterprises, and the investment opportunities of state-owned enterprises have also warmed up significantly.
Three barrels of oil H shares have risen 25% this year.
On March 7, when the international oil price stood above US $80, the A-share cycle plate rose sharply, and the oil sector rose more than 4% in early trading, especially the collective surge of three barrels of oil, which aroused great concern in the market.
Petrochina rose nearly 6% in intraday trading on March 7, with a total market capitalization of more than 1 trillion yuan at one point, and closed up 2.36%, the data showed. China Petroleum & Chemical shares hit a four-year high in intraday trading, while CNOOC rose by its daily limit and hit an all-time high.
In the H-share market, three barrels of oil also performed very well, with an average increase of 4%. Since the beginning of this year, three barrels of oil shares in Hong Kong have risen by an average of 25%. The three barrels of oil on A-shares, China Petroleum & Chemical and CNOOC rose about 20 per cent, while Petrochina performed relatively poorly, up nearly 14 per cent.
At present, the international oil price has regained above 80 US dollars per barrel. The expectation of China's economic recovery in the international market has become an important reason for pushing the global oil price above $80, and many investment banks expect the international oil price to return to $100 in the second half of this year.
"with the return of China, we will lose spare capacity." Said Jeff Currie, director of commodities research at Goldman Sachs Group. "I believe we will see prices soar again in the next 12-18 months." Goldman Sachs Group's latest forecast is that Brent crude will start to rise this month, reaching $100 a barrel in December.
Russell Hardy, chief executive of Vitol, a famous global energy and commodities trading company, also believes that oil prices may fluctuate between $90 and $100 a barrel in the second half of this year. Given that oil demand will grow at a rate of 2.2 million barrels a day this year, while supply is still limited, oil prices are likely to rise.
The world's largest crude oil producer has limited production.
Crude oil prices could hit $100 a barrel in the fourth quarter of 2023, according to Scott Shefield, chief executive of Pioneer Natural Resources, a US shale oil producer. There are not many long-term investors in the current oil market, and shale oil production in the Permian basin, the largest oil field in the United States, is likely to peak in the next five or six years.
According to a report by Baker Hughes, a US oil and gas agency, the number of oil and gas drilling in the United States has also declined for three months in a row. The number of oil and gas active drilling rigs in US energy companies fell by 4 to 749 in the week ended March 8. This is the third week in a row that US energy companies have cut the number of oil and gas rigs for the first time since August 2022. Us crude oil production fell to its lowest level since August 2022 at just 12.1 million barrels a day in December, according to monthly supply data released by the US Energy Agency (EIA).
While the increase in production in the United States is limited, the US Department of Energy has said that it hopes to start buying crude oil in the coming year to partially replenish the strategic crude reserves. It is expected to complete the sale of 26 million barrels of strategic reserves authorized by Congress by June 30, 2023. The United States sold 180 million barrels of strategic crude reserves last year.
Oil companies of central enterprises have room for revaluation.
"judging from the compound growth rate of net profit and the average price-to-earnings ratio over the past five years, the valuation of the leading state-owned enterprises in the A-share energy industry has been on the low side, with room for valuation reshaping." Zhang Yidong, a global strategist at Societe Generale Securities, believes that from the valuation center over the past five years, the average PE of A-share energy industry leading state-owned enterprises (15.1 times) is lower than that of world-class enterprises (18.7 times). From a profit point of view, the average compound growth rate of net profit of A-share state-owned enterprise leaders in the past five years (35.0%) is higher than that of world-class enterprises (18.4%).
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 per cent.
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 epidemic at 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.
Xu Chi, an analyst at Zhongtai Securities, believes that the central enterprise is still a "depression" in the valuation of A shares, and the realization of value is expected to reshape the valuation of the central enterprise. The PE market index of central enterprises is currently valued at about 10. 4 times, which is lower than the 18 times valuation of A shares as a whole. As of the three quarters of 2022, the profits of state-owned enterprises accounted for 70% of the profits of the listed companies in the whole market, but the total market capitalization was less than 50%. The valuation advantage of central enterprises was relatively obvious.
Xia Junjie, founder and investment director of Renqiao assets, said that the market has begun to "reshape" leading state-owned enterprises, and investment opportunities for central state-owned enterprises have also increased significantly, and this process is expected to eventually spread to more uninterested and equally undervalued companies. the opportunities in this sector are not unique, but let a hundred flowers blossom.
Edit / phoebe