Analyst Note| Chokwai Lee, CFA |
We raise PetroChina’s fair value estimate to HKD 3.86 per H-share (USD 49.50 per ADR, CNY 3.24 per A-share) from HKD 3.72 (USD 48.00, CNY 3.14), following its robust first-quarter 2021 results. We think the H-shares and ADRs are undervalued given the strong recovery in earnings on the back of firm oil prices. Meanwhile, the A-shares are overvalued. PetroChina’s first-quarter 2021 net profit of CNY 27.7 billion was a sharp improvement from a net loss of CNY 16.2 billion a year ago. The better earnings were partly aided by inventory gains and imported gas profit.