CLSA has released a research report raising the target price for PetroChina (00857) H-shares from HK$12 to HK$12.4, and lifting the A-share target price from RMB15.9 to RMB16, while maintaining its "Outperform" rating.
According to the brokerage, PetroChina's H-shares are mispriced. Over the past two months, the H-share price has remained largely flat, while oil prices and the company's A-shares rose approximately 25% and 19% respectively during the same period. The A-share premium over H-shares has widened from 27% since September to 57%.
PetroChina's third-quarter net profit came in at RMB51.8 billion, up 22% year-on-year but down 7% quarter-on-quarter. During the same period, the Brent benchmark oil price fell 5% quarter-on-quarter to US$90 per barrel. The company's net profit for the first nine months reached RMB158 billion, equivalent to about 89% of both CLSA's and the market's full-year forecasts.
With oil prices remaining elevated, CLSA believes there is still upside potential for the company's full-year earnings and dividend distribution.
The report notes that PetroChina's four major business segments delivered solid earnings performance. Within the downstream operations, the refining, chemicals and marketing businesses all recorded positive EBIT in the third quarter, in sharp contrast to the severe drag faced by Sinopec (00386) in its downstream operations.
CLSA has raised its earnings per share forecasts for PetroChina for 2026 to 2028 by 2% to 8%.
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