[ET Net News Agency, 16 July 2018] HSBC Global Research lifted its target price for
PetroChina (00857) to HK$8.26 from HK$7.42, and reiterated its "buy" rating.
The research house expects more advantages than disadvantages for PetroChina under the
low-sulphur cap regulations (commonly referred to as IMO 2020). Advantages include better
middle distillate margins, domestic focus, and relatively sour crude diet at the new
refinery assets, which should help lower feedstock costs.
But HSBC noted that Northern China middle distillate supply-demand balance is likely to
continue to have a growing surplus due to commissioning of new refineries and old
refineries run on higher cost sweet crudes.
HSBC lifted its 2018/19 refining segment operating profit forecasts by 40%/47% and net
income estimates by 6%/8%. (KL)