Ceasing Coverage of PetroChina and Sinopec ADS Following Their Voluntary Delisting Plans

We cease coverage of PetroChina and Sinopec American depositary shares, or ADS, following their plans to voluntarily delist from the New York Stock Exchange. We keep our respective fair value estimates of HKD 4.60 per H-share (CNY 3.72 per A-share) and HKD 5.40 per H-share (CNY 4.40 per A-share) for PetroChina and Sinopec unchanged. While the delisting of the ADS may exert near-term pressure on share price performance, we believe it will have limited impact on the operations or the underlying values of PetroChina and Sinopec, as they can still raise equity fundings from the Stock Exchange of Hong Kong and the Shanghai Stock Exchange if necessary.