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PetroChina Co Ltd ADR PTR

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Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising PetroChina’s FVE on Stronger-Than-Expected Q1 2021 Results; Recovery on Track

Chokwai Lee, CFA Senior Equity Analyst

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.

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Company Profile

Business Description

PetroChina, the national champion that inherited the majority of Chinese onshore oil and gas assets, has developed into an international supermajor. It produces more than 1.6 billion barrels of oil equivalent of oil and gas annually and has more than 1.2 billion barrels of annual crude oil primary distillation capacity and more than 22,000 service stations. The fluctuations in the prices of crude oil, refined products, chemical products, and natural gas have a significant impact on PetroChina’s revenue. State-owned China National Petroleum Corp is PetroChina’s controlling shareholder with a stake of more than 80%. The firm’s peers in China are Sinopec and CNOOC.

Contact
No. 9 Dongzhimen North Street, Dongcheng District
Beijing, 100007, China, People's Republic of
T +86 1059986270
Sector Energy
Industry Oil & Gas Integrated
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type —
Employees 692,841

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