[ET Net News Agency, 12 January 2018] Citi Research lifted its target price for
PetroChina (00857) to HK$6.7 from HK$4.8, and upgraded its rating to "buy" from "sell".
The research house said PetroChina has been the most underweighted stock in the sector
on investor concerns about ever-increasing losses on import gas and looming risk of
pipeline nationalization.
Citi believes these negatives have been more than priced in by the market, and the risk
is nowto the upside. Following the gas shortages in China this winter, it believes Beijing
will adopt a more measured pace in bolstering China's gas consumption, without causing too
much disruption on the supply side.
The research house believes it's time to refocus on PetroChina's oil E&P business in
light of oil stabilizing above US$65/bbl. Current oil prices improve the prospects of
higher E&P earnings, even at the company's ASP discount to Brent of over 10% and all-in
costs of around US$50/bbl. (KL)