H1-2019 Financial Results of the Three Big Chinese Oil Companies

Dear PGM Capital blog readers,

In this weekend’s blog article, we want to take the opportunity to discuss with you, the H1-2019 financial results of the following three big Chinese Oil Companies; PetroChina, Sinopec and CNOOC, as reported in the last week of August.

PETROCHINA:

PetroChina Company Limited (HKE:00857) is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. It is China’s second biggest oil producer.

H1-2019 Financial Results:

On Thursday, August 29, PetroChina reported its financial results for the first six months of 2019, with the following highlights:

  • Net profit rose to 28.42 billion yuan (US$4.01 billion), up from 27.44 billion for the same period last year.
  • Total revenue for the company was 1.12 trillion yuan, up 6.8% from the same period in 2018.
  • Produced a total of 451.9 million barrels, or 2.5 million barrels per day, up 3.2% from the same period in 2018. 
  • Natural gas output increased 9.7% to 1.96 trillion cubic feet, or 55.5 billion cubic meters.

Based on the H1-2019 results, the company declared an interim dividend of CNY 0.0699 a share and a special dividend of CNY 0.0078 a share, both payable on November 1, for which the ex-dividend date is set on September 19.

SINOPEC:

China Petroleum & Chemical Corporation or SINOPEC, (HKE: 00386), is the world’s largest oil refining, gas and petrochemical conglomerate, head quartered in Chaoyang District, Beijing.

H1-2019 Results:

On Sunday, August 25, Sinopec reported its financial results for the first six months of 2019, with the following highlights:

  • Net profit of 31.34 billion yuan ($4.42 billion) a decrease of 25% compared with the same period last year, over thin refinery margin
  • Revenue in the first six months rose 15.3% from a year ago to 1.5 trillion yuan.

Based on the H1-2019 results, the company declared an interim dividend of CNY 0.12 a share, payable on September 26, for which the ex-dividend dat is set on September 6.

CNOOC:

CNOOC Limited (HKE: 00883), head quartered in Hong Kong, is China’s largest producer of offshore crude oil and natural gas,.

H1-2019 Financial Results:

On Thursday, August 29, CNOOC reported its financial results for the first six months of 2019, with the following highlights:

  • Oil and gas production remained stable in the first half of the year, with a net production of 243.0 million Barrels of Oil Equivalent (BOE), representing an increase of 2.1% year on year.
  • Net profit rose 18.7-percent in the first half of 2019 on the back of increased sales of oil and gas that more than offset volatile commodity prices.

Based on the H1-2019 results, the company declared an interim dividend of HKD 0.33 a share, payable on October 16, for which the ex-dividend dat is set on September 12.

PGM CAPITAL’s ANALYSIS & COMMENTS:

Chinese energy companies have said they plan to raise spending on domestic drilling this year to the highest since 2016 to safeguard the country’s energy security.

PETROCHINA:

PetroChina invested 12.27 billion yuan in upstream exploration in the first half of 2019, 14% more compared to the same period last year.

SINOPEC:

Sinopec plans to further boost its oil and gas exploration and development in the second half of this year. They expect to produce 142 million barrels of crude oil, with 17 barrels from overseas fields, and 507 billion cubic feet of natural gas in the second half of 2019.

CNOOC:

CNOOC Ltd, China’s largest Oil and Natural gas producer, said it planned its capital expenditure for 2019 to be the highest since 2014 and to increase drilling and development of resources at home. 

Based on the fundamentals of the Chinese Big Oil Companies, we have a STRONG BUY rating on CNOOC, a BUY rating on SINOPEC, and a HOLD rating on PETROCHINA.

Disclosure:

We own shares of CNOOC Ltd., SINOPEC, and PETROCHINA in our personal portfolio.

Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.

Yours sincerely,

Eric Panneflek

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