The analyst rating from JPMorgan for PETROCHINA is based on several positive observations and projections:
1. Growth Capacity: Analysts were pleasantly surprised by the growth capacity of PETROCHINA's Southwest Oil & Gasfield, particularly in low-cost onshore natural gas production.
2. Resilience in Declining Oil Prices: There is increased confidence in PETROCHINA's ability to navigate five consecutive years of declining oil prices.
3. Government Support: The company is expected to benefit from the unconventional natural gas subsidy policy outlined in the 15th Five-Year Plan, leveraging its advanced exploration and development technology to enhance shale gas production.
4. Significant Reserves: The Sichuan Basin project has over 80 trillion cubic meters of undeveloped natural gas reserves, which positions PETROCHINA favorably against projected domestic natural gas sales.
5. Storage Capacity: PETROCHINA controls about 80% of China's working gas storage capacity and plans to significantly increase this capacity by 2030, allowing it to take advantage of lower spot liquefied natural gas prices.
6. Consistent Dividends: The expectation of a dividend increase to RMB0.48 per share for 2025 marks the sixth consecutive year of dividend hikes, indicating financial stability and shareholder return.
Based on these factors, JPMorgan raised its target price for PETROCHINA from HKD9 to HKD10 and maintained an Overweight rating.
