Top HK dividend stocks (20 Feb 2023)
I have been buying Hong Kong dividend stocks over the past few years and have held on to most of these stocks, especially oil/energy businesses.
This stems from the consumption forecast of oil and its derivatives.
China’s oil consumption
China Oil Consumption
1965 - 2022 | YEARLY | BARREL/DAY TH | BP PLC
Key information about China Oil Consumption
China Oil Consumption was reported at 14,295.000 Barrel/Day th in Dec 2022
This records a decrease from the previous number of 14,893.000 Barrel/Day th for Dec 2021
China Oil Consumption data is updated yearly, averaging 2,934.500 Barrel/Day th from Dec 1965 to 2022, with 58 observations
The data reached an all-time high of 14,893.000 Barrel/Day th in 2021 and a record low of 215.000 Barrel/Day th in 1965
China Oil Consumption data remains active status in CEIC and is reported by BP PLC
The data is categorized under World Trend Plus’s Association: Energy Sector – Table RB.BP.OIL: Oil: Consumption
Updates from Global Data:
Asia has the highest refinery capacity in the world with more than 35% share due to strong demand for petroleum and petrochemical products from its growing economies such as China and India
China leads Asia in terms of upcoming refinery capacity additions by 2026. Strong demand for gasoline, diesel and plastics are some of the key factors driving refining capacity additions in the country
India stands second in terms of upcoming refinery capacity of 1,607 thousand barrels per day (mbd) from new build and expansion refineries. Vadinar is the largest project in the country that is expected to add a capacity of 515 mbd in 2024
China has close to 50% share in Asia’s active refinery capacity in 2022 with a capacity of 18,221 mbd. The country would witness capacity additions of 3,442 mbd from new build and expansion projects during 2022 to 2026. Yulong and Jieyang are the two major upcoming refinery projects that are expected to start operations in 2023 and 2022 with a capacity of 400 mbd each.
world liquid fuels production and consumption balance
From the chart above, EIA is seeing an upward trend of oil consumption for 2024 & 2025.
Oil that is extracted from the ground requires refinery processing so that it can be converted to various commercial and industrial uses. Having oil reserves alone is not sufficient. This is a current challenge for the USA as it consumes more than it can refine. Thus, the US continues to import oil from other countries.
One of the important products of oil is plastics.
U.S. Plastic market size and growth rate, 2023 - 2030
The following is extracted from Grand View Research’s online post:
The global plastic market size was estimated at USD 624.8 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2030. The increasing substitution of glass, metals, wood, natural rubber, and other materials, by plastics is expected to drive the global plastics market in the coming years.
With the demand for plastics (from oil), oil looks to be in great demand until there are other affordable and green options.
Is it not surprising that Berkshire has been adding their holdings in oil companies like Occidental Chevron over the last few quarters?
Some HK dividend stocks of interest
A. CNOOC
One of them is CNOOC (00883.HK) which had a TTM yield of 16.18% and a market leader in terms of dividend payout.
B. PETROCHINA
The other company of interest is Petrochina (00857.HK) which offered a Yield (TTM) of 8.09%.
C. SINOPEC
The next one that we can research is Sinopec (02386.HK) which has a TTM yield of 9.14%.
D. CHINA SHENHUA
China Shenhua Energy Company (1088.HK) offers a TTM dividend yield of 9.31%
Considerations
As always, we should be doing research into their recent earnings to ensure that these companies are not having any financial concerns.
For Singaporeans (like me), a withholding tax of about 10% is applied to my dividend and this amount can vary depending on your nationality. Despite market volatility, I have added positions of these companies to my portfolio as defensive (and dividend) stocks regularly.
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- muiee·2024-02-21b1Report