The incident company released its report for the first quarter of 2024. In the first quarter, it achieved operating income of 789.67 billion yuan, a year-on-year decrease of 0.17% and a month-on-month increase of 6.43%; realized net profit to mother of 18.316 billion yuan, a year-on-year decrease of 8.88% and a month-on-month increase of 144.31%.
Positive progress has been made in increasing storage, increasing production and efficiency. The upstream business improved significantly by business segment. In the first quarter, the company's exploration and development, refining, marketing and distribution business achieved operating income of 140.07 billion yuan, 69.74 billion yuan, and 8.0 billion yuan respectively, with year-on-year changes of 9.0%, -33.0%, and 1.0% year-on-year respectively; the chemical business lost 1,564 billion yuan, and losses narrowed 12.1% year on year. Among them, the operating income of the upstream exploration and development business improved significantly over the same period last year. First, the company is strengthening high-quality exploration, expanding the scale of efficient construction and production, and maintaining growth in efficiency innovation. Oil and gas equivalent production in the first quarter was 128.78 million barrels, up 3.4% year on year, of which natural gas production was 35.5 billion cubic feet, up 6.0% year on year. Second, international oil prices fluctuated upward in the first quarter, and the company achieved a price of 75.43 US dollars/barrel, an increase of 0.3% over the previous year.
Due to factors such as cost and supply, the downstream business was under year-on-year pressure in the first quarter, benefiting from the continued improvement of China's economy. Domestic demand for refined oil products continued to grow, and the growth rate of demand for chemical products accelerated year-on-year. In the first quarter, the company achieved 63.3 million tons of crude oil processing, up 1.7% year on year; total sales volume of refined oil products was 59.81 million tons, up 6.5% year on year; total operating volume of chemical products was 19.51 million tons, down 5.1% year on year, or related to the company's benefit-oriented arrangement of negative marginal efficiency devices to reduce load or shut down operations. We believe that the decline in refining sector performance may be related to the year-on-year narrowing of the domestic refining price gap in the first quarter. Furthermore, although terminal demand momentum has strengthened, profits in the chemical sector are still low due to the continued release of new production capacity and rising raw material costs.
High-dividend petrochemical state-owned enterprises continue to promote high-quality development. As China's petrochemical state-owned enterprises, they maintain high dividend ratios, have good sustainability, and focus on shareholder returns. The company's dividend ratio for 2017-2022 operates in the range of 64.48%-118.42%; according to the company's profit distribution plan for the end of 2023, the company's dividend ratio is expected to be 72.10% in 2023. The planned capital expenditure for the full year of 2024 is 173 billion yuan, which is at a high level in the past ten years. In 2024, the company plans to continue to increase exploration efforts, increase high-quality reserves, and make every effort to stabilize oil and gas costs. It plans to produce 279.06 million barrels of crude oil and 13797 billion cubic feet of natural gas throughout the year; refining will promote low-cost “oil conversion” in an orderly manner and increase “oil transfer” efforts. It plans to process 260 million tons of crude oil and produce 159 million tons of refined oil products throughout the year; the sales business will strengthen digital intelligence capabilities, consolidate and increase market share, and accelerate the construction of “oil, gas, and hydrogen electric service” integrated energy service providers. 9.1 billion tons; The chemical business will adhere to “foundation+high-end”, cultivate new advantages of “cost+added value+green and low carbon”, and plan to produce 14.35 million tons of ethylene throughout the year.
The investment proposal estimates that the company's revenue for 2024-2026 will be 33736.28, 34026.07 billion yuan, and 3412.656 billion yuan, respectively; net profit to mother will be 637.42, 713.88 and 75.98 billion yuan, up 5.42%, 12.00%, and 6.43% year-on-year; EPS will be 0.52, 0.59, and 0.62 yuan respectively, corresponding PE will be 12.49, 11.15, and 10.48 times, respectively, maintaining the “recommended” rating.
Risks indicate the risk of a sharp rise in raw material prices, the risk of a decline in product sentiment, the risk that production of new construction projects will fall short of expectations, etc.