[ET Net News Agency, 15 June 2020] Credit Suisse raised its target price for PetroChina
(00857) to HK$3.4 from HK$3 and upgraded its rating to "outperform" from "neutral".
The research house said PetroChina has lost half of its market cap in the past 12
months. The stock currently trades at 0.36x P/B, a level not seen during its 20-year
listing. With a potential 2H catalyst in sight (PipeChina roll-out), Credit Suisse sees an
attractive risk-reward opportunity for PetroChina once this long-standing overhang is
removed.
Credit Suisse expects one more bad quarter in 2Q before a sequential improvement in 2H.
Most of the lower oil price pain will be felt in 2Q earnings, where the research house
expects another quarter of record loss of Rmb25-30bn. The consolation factor is that
import gas losses have narrowed significantly, which would help to mitigate the losses in
the E&P segment. (KL)