Net profit remained high in the single quarter: in Q3, the company achieved operating income of 99.254 billion yuan, a year-on-year decrease of 13.5% and a decrease of 13.9% month-on-month; net profit to mother was 36.928 billion yuan, an increase of 9.0% year-on-year and a decrease of 7.7% month-on-month. In the first three quarters, the company achieved total revenue of 326.024 billion yuan, up 6.3% year on year, and realized net profit to mother of 116.659 billion yuan, an increase of 19.5% year on year. The company's net profit remained high in a single quarter, thanks to increased production and excellent cost control capabilities.

Increase storage and production to enhance competitiveness: In the third quarter, the company achieved a net output of 179.6 million barrels of oil equivalent, an increase of 7.0% over the previous year. The company's net oil and gas production in the first three quarters reached 542.1 million barrels of oil equivalent, an increase of 8.5% over the previous year. The company achieved excellent results in increasing storage and production. Oil and gas sales contributed mainly to revenue. Domestic oil and gas fields such as Bozhong 19-6 and Enping 20-4 contributed greatly to production growth. Overseas, thanks to the increase in production brought about by the commissioning of the Payara project in Guyana.

The cost of barrel oil decreased year-on-year: the company's barrel oil cost was 28.14 US dollars/barrel, including operating expenses of 7.21 US dollars/barrel, depreciation and amortization of 13.96 US dollars/barrel. Disposal fees are $0.83 per barrel, sales and management expenses are $2.06 per barrel, and other taxes are $4.08 per barrel. The company's barrel oil cost control is at the leading level in the world. The average price of Brent crude oil in the first three quarters of 2024 was 81.8 US dollars/barrel. The sales price of the company's crude oil increased from 76.8 US dollars/barrel in the first three quarters of 2023 to 79.0 US dollars/barrel in the first three quarters of 2024, an increase of 3% over the previous year. , and discounts on international oil prices have been reduced. In the current context of rising and falling oil prices, the company's cost advantage continues to be highlighted.

Capital expenditure maintained high growth: The company's capital expenditure for the first three quarters was approximately RMB 95.34 billion, up 6.6% year on year. The company's ongoing project and adjustment well operations increased year-on-year.

The company obtained 9 new discoveries and successfully evaluated 23 oil and gas containing structures. Four new oil contracts have been signed for Brazilian offshore exploration blocks. It is expected that the projects will be put into operation one after another from 25 to 27, and overseas production will further increase.

The target price is HK$23.12, giving a buying rating: We forecast that the company's revenue for 2024-2026 will be $451.4 billion/ 465.5 billion/ 476 billion yuan, respectively; net profit to mother will be $145.2 billion, $148.9 billion, and $153 billion, respectively. We gave the company 7 times the PE valuation in 2024, with a target price of HK$23.12, with room for an increase of 33.5% from the current price, and gave it a buy rating.