Petrochina 0857

[winston]

Was thinking of buying a Put as I expected the results to be worst than expectation. However, with the "irrational exuberance" in the market, I will gave it a miss ...

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Dr Check agrees with Mobius' PetroChina (0857) H-share pick. Its A share advanced 15 percent in the first quarter but the H share fell 5 percent.

Although its earnings, due to be announced today, are tipped to fall substantially, they are still expected to top 100 billion yuan (HK$113 billion).

Daiwa named PetroChina as its first choice in China oil shares. The broker expects the refinery business to reach bottom in the coming two months and set a target price of HK$7.80.
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[winston]

China will be increasing it's gasoline price and 50% of the earnings of Petrochina are from refining..

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PetroChina Q4 falls 39 pct on drop in oil prices

HONG KONG, March 25 (Reuters) - PetroChina Co Ltd (0857.HK) (PTR.N) (601857.SS), Asia's top oil and gas producer, posted a 39 percent drop in fourth-quarter net profit, hit by asset writedowns amid a sharp drop in crude oil prices.

PetroChina, the world's second-largest oil company by market value after Exxon Mobil (XOM.N), said October-December net profit fell to 20.9 billion yuan ($3 billion) from a restated 34.25 billion yuan a year earlier.

The result, calculated from previously reported quarterly earnings, lagged a consensus forecast for 33.1 billion yuan from 20 analysts polled by Reuters.

For the full year, PetroChina reported a net profit of 114.43 billion yuan. The oil giant posted earnings per share of 0.63 yuan, down from 0.82 yuan a year ago.

The company said its total oil and gas output in 2008 rose 5.7 percent from the previous year.

PetroChina is the latest energy producer to feel the pain from the collapse in crude prices CLc1, which have tumbled by two-thirds from a record near $150 a barrel last July.

International oil majors including BP Plc (BP.L) and Royal Dutch Shell (RDSa.L) have posted lower fourth-quarter profits.

PetroChina shares fell 15 percent in October-December, a little less than top Asian oil refiner Sinopec's (0386.HK) 22 percent drop and a 20 percent fall on the benchmark Hang Seng Index

[winston]

PetroChina profit falls on oil slump by Kathy Wang

PetroChina (0857), the world's second- largest listed company by market capitalization, recorded - for the first time since 2003 - a decline in annual net profit, as crude prices took a big dive during the second half last year.

Net profit fell 22 percent to 114 billion yuan (HK$129.32 billion) in 2008, but PetroChina remained the most lucrative Hang Seng Index blue-chip.

Turnover of the country's biggest oil producer rose 28 percent to 1.1 trillion yuan. Basic earnings per share were 0.63 yuan, compared with 0.82 yuan per share in 2007. The board recommended a final dividend of 14.953 fen per share.

The company has allocated about 23.2 billion yuan in capital expenditure for 2009, the same as 2008.

"We do not believe the current economic slowdown will diminish the demand for oil. That's why we maintain our capex scale and we believe our strategy to keep investing will make us better positioned when the economy recovers," said president Zhou Jiping. Seventy percent of the spending will go to boost oil exploration and production. Petrochina generated 170.5 billion yuan from operations in 2008, while cash outflow for investment was 213.9 billion yuan. Its gearing ratio climbed to 12.9 percent in 2008 from 8.3 percent in 2007.

Zhou said the company will continue looking for merger and acquisition opportunities abroad, especially where it already has a presence.

Overseas operations accounted for 8.7 percent of total production and 18.2 percent of pre-tax profit.

PetroChina paid 89.3 billion yuan wind-fall tax to the government in 2008. Government compensation for refining losses reached 15 billion yuan.

The company aims to produce 832 million barrels crude and 1.16 trillion cubic feet natural gas in 2009.

Beijing raised ex-factory prices of gasoline by 5 percent to 5,730 yuan per ton, and diesel by almost 4 percent to 4,990 yuan per ton. Zhou said the new ceilings on fuel prices can lift PetroChina's income by 1.26 billion yuan per month in the downstream market sector.

Zhou said PetroChina sold less than 200,000 barrels oil per day in the first two months, but this rebounded to over 250,000 barrels per day during last week, indicating the economy is picking up.

[winston]

DJ MARKET TALK: CS Rates PetroChina Underperform, Target HK$4.60

1033 [Dow Jones] STOCK CALL: PetroChina's (0857.HK) guidance for lower E&P production and downstream volumes, while costs are increasing, reinforcing view company's capex binge hasn't yet fully hit P&L, Credit Suisse says. Notes FY08 net profit down 22% on-year at CNY114 billion, with impairments/writeoffs at CNY25 billion pretax.

Says before write-offs, results about 4% below house's estimates. Cuts 2009 net profit estimate by 9% to CNY74.3 billion, cuts 2010 net profit estimate by 15% to CNY81.64 billion. Expects consensus to also downgrade, tips 1Q09 to catalyze downside.

Says stock not cheap as trading at 14X 2009 P/E; adds, with ROE at all-time low of 8.0%, P/B should follow. Keeps Underperform, target HK$4.60. Shares down 0.4% at HK$6.68.

[winston]

DJ MARKET TALK: PetroChina Rally Overshoots Fundamentals -CS

0854 [Dow Jones] STOCK CALL: Credit Suisse says PetroChina (0857.HK) is "popping on sentiment," but stock has overshot, performance is diverging from fundamentals. Notes stock has bounced 29% over the last month, performing largely in line with the market, with rally reflecting rapid change in risk appetite.

But adds, on 12-month forward consensus earnings, stock trades at 11X P/E, marking 25% premium to ex-spikes trading average. "Oil prices do not matter to PetroChina - what matters is government price changes. Sinopec (0386.HK) is a bigger beneficiary of the government policy." Advises selling PetroChina. Keeps Underperform, target HK$4.60. Stock closed down 2.1% at HK$6.60 Tuesday.

[winston]

DJ MARKET TALK: PetroChina Undervalued, But Not Compelling -UBS

1522 [Dow Jones] STOCK CALL: UBS trims PetroChina (0857.HK) target to HK$7.20 from HK$7.40, based on SOTP valuation. Raises 2009 EPS estimate by 5% following house's downgrade of global oil price forecasts and changes to refining segment estimates, but cuts 2010-2012 EPS estimates by 15%, 10%, 13%, respectively.

Notes stock up about 40% from vs 4Q08 trough levels; estimates stock trading near 14X 2009 pre-exceptional P/E after recent rally, based on new oil-price forecasts. "While we believe the stock looks undervalued, the current trading level is not compelling when compared to historic levels, in our view.

Also, the current trading level suggests in our view that the market is already pricing in a substantial recovery in oil prices." Keeps at Neutral. Shares down 4.4% at HK$6.31; HSI down 3.7%.

[winston]

DJ MARKET TALK:JPM Cuts PetroChina To Underweight,Cuts Target 25%

1231 [Dow Jones] STOCK CALL: JPMorgan downgrades PetroChina (0857.HK) to Underweight from Neutral on recent good share price performance and expectations of weak 1Q09 results. Lowers target price to HK$6.00 from HK$8.00 due to lower crude production levels and growth in future.

Says lower oil prices late last year and so far this year led management to guide down production expectations. Adds, company asking Chinese government to increase windfall tax trigger level, further indicating oil prices around US$40-US$45/bbl not very profitable for company. Notes, main risks to rating and target are higher-than-expected production, oil prices and strong equity markets in general. Shares down 0.9% at HK$6.73; HSI down 0.4%.

[winston]

DJ MARKET TALK: GS Removes PetroChina H-Shrs From Conviction Sell

1134 [Dow Jones] STOCK CALL: Goldman Sachs removes PetroChina (0857.HK) H-shares, ADRs (PTR) from Asia Conviction Sell list, but retains Sell ratings on both. Says company's near-term outlook continues to be challenging given management's guidance of 4.4% decline in 2009 oil production, inflated cost structure and continued heavy capex commitment in 2009-10.

Tips company's 2009 net profit to decline 41% on-year to CNY67.70 billion, driven mainly by sharp 70% decline in E&P EBIT. Expects negative free cash flow of CNY66.1 billion in 2009. Keeps H-share target price at HK$4.65. Shares +0.1% at HK$6.80; HSI up 0.5%.

[winston]

PetroChina first-quarter profit battered by falling crude prices by Kathy Wang, The Standard HK

PetroChina (0857) said net profit for the first quarter declined 35 percent from a year ago to 18.8 billion yuan (HK$21.27 billion) as international crude prices fell.

The mainland's biggest oil producer also said sales plunged 30 percent to 181.6 billion yuan. Earnings per share dropped to 10 fen from 16 fen.

The realized selling price of crude fell 58 percent to US$37 (HK$288.60) per barrel in the first three months.

Natural gas output rose 7.9 percent to 523.4 billion cubic feet.

PetroChina, as the nation's second- largest oil refiner, benefits from China's new fuel sales scheme which adjusts fuel prices as crude prices change.

Its holding company, China National Petroleum Corp, plans to sell as much as US$3 billion of bonds and may start issuing notes within two months.

The January through March earnings were PetroChina's worst quarterly result since it began reporting on a quarterly basis in 2007.

PetroChina shares dropped 2.5 percent yesterday to close at HK$6.64.

[winston]

PetroChina Needs to Raise $22 Billion in Financing (Update1) By Eugene Tang

May 6 (Bloomberg) -- PetroChina Co., the world’s second- largest company by market value, said it needs to raise 150 billion yuan ($22 billion) in funds this year because tax payments may rise and cash flow has diminished.

Free cash flow, or the cash available for investing or financing after meeting certain expenses from operations, declined by 76.9 billion yuan last year because of tax payments and investments, the company said in a statement to the Shanghai stock exchange. The oil producer had negative free cash flow of 44.9 billion yuan in 2008, according to the statement.

PetroChina plans to pay as much as $1.4 billion for a stake in a Kazakh oil company to take advantage of lower commodity prices and expand overseas, Chairman Jiang Jiemin said on April 16. Parent China National Petroleum Corp. plans to sell as much as $3 billion of bonds and may start issuing notes within two months, an industry association said on April 27.

“PetroChina still has a very healthy financial position as its debt-to-asset ratio is low,” Grace Liu, an oil analyst at Guotai Junan Securities Hong Kong Ltd., said by telephone from Shenzhen. “It won’t be hard for them to borrow from banks.”

PetroChina faces “severe challenges” as the global financial crisis has lowered crude-oil prices and cut fuel and petrochemical demand since the second half of last year, according to the statement dated today.

To conserve energy consumption, China, the world’s second- biggest oil user, increased the fuel consumption tax paid by refiners and importers eightfold, according to a statement on the government’s Web site on Dec. 19.

PetroChina’s fuel-consumption tax payment may jump by 71 billion yuan this year to 84.2 billion yuan because of the rate adjustment, the company said in the statement.

Shares of the oil producer fell 0.4 percent to HK$7.49 in Hong Kong at the midday break, compared with a 0.2 percent gain in the benchmark Hang Seng index.