A comprehensive financial company backed by oil and gas industry chain giants, the profit model is mainly net interest income. CNPC Capital completed the restructuring and listing in 2017 and became a fully licensed financial holding company under CNPC. The three main businesses are commercial banks, finance companies, and financial leasing, with net interest income contributing nearly 90% of revenue. Performance has improved markedly since 2023, leading to a steady recovery in ROE.
Sub-sectors work together, and finance companies and banks contribute to core revenue. 1. CNPC Finance: A financial service institution exclusive to group member companies. Loans are mainly invested in the mining and transportation industries, while green credit and “Belt and Road” international energy cooperation are shaping new growth points, and revenue growth has improved since 2023. 2. Kunlun Bank: As a characteristic bank in the energy sector, its business area covers the main production area of CNPC, and has outstanding advantages in public business, but retail transformation has been accelerated in recent years; the international business is mature and is expected to benefit from the CNPC settlement system.
Since 2020, net interest spreads have bucked the trend and maintained overall asset quality stability, and performance has entered an upward channel.
3. Kunlun Financial Leasing: Relying on the capital and customer resources of the parent company, the assets are mainly invested in the transportation and energy sectors. The customer structure, which is dominated by state-owned enterprises, brings excellent asset quality and maintains a leasing business investment growth rate of about 20%.
The advantages of license licenses are outstanding. Cyclical factors are compounded by state-owned enterprise reforms, and ROE is expected to continue to improve. CNPC Capital holds 7 financial licenses. On the one hand, it has established a competitive advantage in industrial finance and helped implement “promoting finance through production, aiding production, integration and collaboration”; on the other hand, it has a higher competitive starting point for financial control licenses. The company itself is affected by both the petroleum industry cycle and the financial cycle: 1. Domestic petroleum product consumption continues to recover, while energy security rises to a national security strategy, and the operating fundamentals of domestic petroleum companies are expected to improve; 2. The financial cycle may enter the bottoming stage, which is important for the recovery in the profit level of CNPC capital. Taking Kunlun Bank as an example, oil prices have rebounded strongly in the past two years, but ROE has continued to decline. Continued improvement since 2023 requires financial cycle support. Furthermore, the new round of state-owned enterprise reform is progressing in depth, leading central state-owned enterprises from value discovery to value creation. The increase in ROE is expected to become a key operating goal of CNPC Capital and drive the restoration of the valuation center.
Against the backdrop of a relatively stable oil cycle, the financial cycle is expected to bottom out, and a new round of state-owned enterprise reform, the company's operating fundamentals are well supported. The company's net profit growth rate for 23/24/25 is 6.9%/17.4%/9.4%, BVPS is 7.89/8.29/8.74 yuan, and the PB corresponding to the current stock price is 0.6X/0.6X/0.6X. Using a comparable company valuation method, we gave CNPC Capital 0.8 times PB in 23 years, and the corresponding target price was 6.31 yuan. For the first time, we gave it a purchase rating.
Risk warning
Oil prices fell beyond expectations; economic recovery fell short of expectations; poor performance in specific industries intensified exposure.