On July 3, Gelun Hui reported that China's oil and gas sector has been performing strongly so far this year, and it is expected to continue outperforming the wider market in the second half of this year. Due to global supply shortages, the bank expects oil prices to remain high or even rise further in the second half of the year. As crude oil is priced in USD, if the RMB depreciates, oil companies can provide protection to investors. As mainland funds seek high-yielding state-owned assets in the Hong Kong stock market, the bank says that the "big three" oil companies are in a prime position. The report states that if individual investors are indeed exempt from the 20% dividend tax when purchasing Hong Kong stocks through the Hong Kong Stock Connect, it will once again boost stock prices. The bank reiterated its "buy" rating for the industry and still views CNOOC as its top pick. The bank has a "buy" rating on the H-shares of all the "big three" oil companies and has increased its target price for PetroChina's H-shares from HKD 7.8 to HKD 8.7, Sinopec's H-shares from HKD 4.99 to HKD 5.73, and CNOOC's H-shares from HKD 21.84 to HKD 26.39.