Conclusions and recommendations
The energy, oil and gas boom continues, and the peak summer travel season is approaching, and downstream demand for crude oil is expected to boost. The company has stable operations, abundant upstream resources, and strong performance certainty. The company attaches importance to shareholders' rights and has maintained a high dividend ratio for a long time. The dividend allocation value is still obvious, and maintains the “buy” proposal.
Steady operation and high certainty of performance: In Q1 2024, against the backdrop of a slight year-on-year decline in the average price of crude oil, the company's profit bucked the trend and reached a record high. In 2014, Q1 achieved revenue of 812.184 billion yuan, yoy +10.88%; realized net profit of 45.681 billion yuan, yoy +4.7%; realized net profit of 45.788 billion yuan, yoy +3.78%. The average price of crude oil rose year-on-year in Q2. In 2024, the average price of crude oil was 85.0 US dollars/barrel, yoy +9%, and the average price of US oil was 80.6 US dollars/barrel, yoy +10%. The company's Q2 revenue and profit is expected to continue to grow.
Prices of refined oil products increased, and sales sector profits continued to recover: in Q2 2023, domestic gasoline and diesel standard prices fluctuated at a high level, leading to a year-on-year increase in refined oil prices. On June 28, the Development and Reform Commission announced that the domestic gasoline supply price was 9220 yuan/ton, up 390 yuan/ton from the beginning of the year, and 595 yuan/ton over the same period last year; the diesel supply price was 8,175 yuan/ton, up 380 yuan/ton from the beginning of the year, and 570 yuan/ton over the same period last year. The increase in the price of refined oil products will drive the company's sales sector profits to continue to rise.
Natural gas costs have declined, and profits have increased significantly: the company has been striving to increase the sales ratio of direct supply and direct sales customers and the terminal market, and continue to improve sales volume and efficiency. In 2024, Q1 Company's sales volume in the natural gas sales segment exceeded the retail gas growth rate of major urban fuel companies during the same period. Furthermore, overseas natural gas prices have continued to fall since 2023. Domestic natural gas sales prices have fluctuated less, company costs have declined, and profits have increased. The average price of NYMEX natural gas H1 in 2024 was 2.19 US dollars/million British thermal heat, yoy -14%, and the company's natural gas sales segment profit will continue to grow.
The dividend ratio has increased, and the high dividend attribute is highlighted: the company maintains a high dividend ratio policy. The annual dividend ratio reached 50%, and the 2021/2022 dividend ratio was 45%/52%, respectively. The mid-year dividend of 2023 was 0.21 yuan/share, and the year-end dividend was 0.23 yuan/share. Based on the closing price on June 27, the dividend rate for A shares was 4.54%, and the dividend rate for Hong Kong stocks was 6.37%. The high dividend allocation value is still obvious.
Profit expectations: We expect the company to achieve net profit of 171/179/18.2 billion yuan in 2024/2025/2026, YOY of +6%/+4%/+2%, respectively; EPS of 0.94/0.98/0.99 yuan respectively. Currently, the P/E corresponding to A shares is 10.4/9.9/9.8 times, and the P/E corresponding to H shares is 7.4/7.1/6.9 times, respectively. The company's performance is guaranteed, dividends are still attractive, and the “buy” proposal is maintained.