Introduction to this report:
CNPC's 2024Q1 performance is in line with expectations. The upstream sector's improved quality and efficiency, as well as increased natural gas sales and structural adjustments, led to a steady increase in performance.
Key points of investment:
Maintaining the shareholding rating and raising the target price and profit forecast: As the company continues to reduce costs and increase efficiency, the crude oil price is better than market expectations. We maintained the company's 2024/2025/2026 EPS of 0.94/1/1.02 yuan, with reference to comparable company valuation EV/EBITDA of 6.68, and we raised the company's target price to 12.66 yuan (originally 10.66 yuan) to maintain the “increase in holdings” rating.
2024Q1's performance was in line with expectations: thanks to improved quality and efficiency in the upstream sector and a high increase in natural gas sales. 2024Q1 achieved revenue of 812.2 billion yuan, +10.9% year-on-year, and net profit of 45.7 billion yuan to mother, +4.7% year-on-year. The average price of 2024Q1 cloth oil was $83.16 per barrel, +2.5% year over year. By sector, the sales and operating profits of oil and gas and new energy/refining/chemical/sales/natural gas were 43/70/11/68/12.3 billion yuan, respectively, compared to +20/-24/+21/-14/+2.2 billion yuan.
The upstream sector improved quality and efficiency, and the chemical sector reversed losses and increased profits: the upstream sector improved quality and efficiency, and stabilized oil and gas growth led to business performance growth: 2024Q1's oil and gas equivalent output was 413 million barrels, 2.6% year over year, of which crude oil production was 197.3 million barrels, +0.9% year over year, and domestic saleable natural gas production was 1294.5 billion cubic feet, +4.2% year over year. Oil and gas unit operating costs were $10.38 per barrel, -1.8% year over year. 2024Q1 crude oil processing volume/refined oil production/chemical products +8.2%/+9.8%/+16.7% year-on-year ratio. The gross margin in refining was dragged down by rising oil prices. The chemical business benefited from downstream inventory replenishment demand and Guangzhou Petrochemical reversed losses and increased profits.
The increase in sales volume led to a high increase in natural gas sales: 2024Q1 gas sales and operating performance was 12.3 billion yuan, an increase of 2.2 billion yuan over the previous year, or +21.5% year over year. 2024Q1 domestic gas sales volume was 67.1 billion cubic meters, +7.5% year over year. Increased sales volume and increased direct supply ratio led to high profit growth.
Risk warning: There is a risk that crude oil prices will fluctuate greatly, and the recovery of chemicals is lower than expected.