CNPC announced its 2024 quarterly report. In the first quarter of this year, the company achieved operating income of 812.184 billion yuan, up 10.9% year on year; net profit attributable to shareholders of the parent company was 45.681 billion yuan, up 4.7% year on year, a record high in the first quarter, second only to the third quarter of 2023 (46.375 billion yuan).
High oil prices fluctuated, helping the company maintain a high level of profit. In the first quarter of 2024, the average price of Brent crude oil was 81.88 US dollars/barrel, which was relatively stable year over month, maintaining a high level of more than 80 US dollars/barrel. The company's overall operating yield was 4.8%, maintaining a good level.
Oil and gas extraction and new energy business: operating profit increased steadily year over year. In the first quarter, the company's oil and gas and new energy business achieved a turnover of 223.119 billion yuan, an increase of 3.0% over the previous year, and an operating profit of 42,965 billion yuan, an increase of 4.8% over the previous year. 1Q24 International oil prices are relatively stable, and the company achieved sector profit growth through increased production (in particular, increased domestic natural gas production and sales) and cost reduction. In the first quarter, the company achieved oil and gas equivalent production of 464 million barrels, an increase of 2.6% year on year; the unit oil and gas operating cost was 10.38 US dollars/barrel, down 1.8% year on year.
Refining and new materials business: Crude oil processing volume increased 8.2% year on year, and chemical business reversed losses year on year. In the first quarter, the company's refining and new materials business achieved revenue of 315.433 billion yuan, an increase of 13.3% year-on-year; operating revenue of 8.115 billion yuan, a year-on-year decrease of 4.2%. Among them, the refining business's profit was 6.970 billion yuan, down 25.8% year on year, mainly due to narrowing refining gross profit; the chemical business profit was 1,145 billion yuan, which reversed the year-on-year loss and profit increased by 2,071 billion yuan, mainly due to increased sales of chemical products and Guangdong Petrochemical's loss. 1Q24's crude oil processing volume was 478.82 million tons, an increase of 8.2% over the previous year.
Sales business: Sales of refined oil products are growing steadily. In the first quarter, the company's sales business segment achieved revenue of 635.210 billion yuan, an increase of 8.0% year on year; operating revenue of 6.763 billion yuan, a year-on-year decrease of 17.1%, mainly due to a decrease in international trade business profits. In the first quarter, the company sold 39.258 million tons of refined oil products, up 4.5% year on year; it sold 28.545 million tons in China, up 4.6% year on year.
Natural gas sales business: Steady growth in revenue and profit. In the first quarter, the company's natural gas sales business achieved revenue of 177.917 billion yuan, an increase of 11.0% over the previous year, and achieved operating income of 12.316 billion yuan, an increase of 21.5% over the previous year. In the first quarter, the company sold 83.369 billion cubic meters of natural gas, up 14.2% year on year; it sold 67.102 billion cubic meters of natural gas in China, up 7.5% year on year.
Profit forecasting and investment advice. We expect the company's EPS in 2024-2026 to be 0.92, 0.95, and 0.98 yuan, respectively, and 8.38 yuan for BPS in 2024. Referring to the valuation level of comparable companies, they were given 1.3-1.5 times PB in 2024, corresponding to a reasonable value range of 10.89-12.57 yuan, maintaining a “superior to the market” investment rating.
Risk warning: Falling crude oil and natural gas prices will affect upstream business profits; declining prosperity in the refining and chemical industry will affect the company's refining and chemical business sector profits.