PetroChina Earnings: No Major Surprises; Higher Oil Price Provides Lift, Dividend Yield Supports

PetroChina’s 4% year-on-year rise in first-half net profit to CNY 88.6 billion largely met our forecast. Resilient upstream earnings helped to offset weaknesses in refining and marketing segments, similar to Sinopec’s results. After incorporating our latest energy price and foreign exchange assumptions, we raise our 2024-28 earnings estimates by an average of 11%. Consequently, we increase our fair value estimate to HKD 7.70 per H-share (CNY 7.10 per A-share) from HKD 6.80 (CNY 6.20). We think PetroChina’s H-shares are currently fairly valued and see more upside for Sinopec’s H-shares. That said, PetroChina’s 2024 dividend yield of close to 7% should continue to support its share price.