PetroChina is expected to deliver resilient results for Q2 of 2023 and although Brent oil futures dropped by about $5 per barrel quarter on quarter during the period, PetroChina’s net profit is expected to reach 41 billion yuan, implying a drop of only 7%, Citi Research said in its note.
The potentially resilient Q2 earnings are likely to surprise investors, thanks to gas EBIT being likely to take up 55% of O&G EBIT in 2023, it said. As the cost of gas imports declines, PetroChina’s imported-gas loss was projected to narrow quarter on quarter to 1.5 billion yuan in the second quarter from 2.3 billion yuan in the first quarter.
PetroChina is the core beneficiary of China’s purchase of discounted Russian oil and it raised the forecast of its 2023-2025 earnings by 19% – 25%, it said.
The broker opened a 30-day positive catalyst watch on the stock, reiterated the rating for its H-shares at Buy, listed the stock as sector top pick, and hiked the H-share target price from HK$6.4 to HK$7.8.
