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%.
16/07/2018 14:18
[I-bank focus]HSBC lifts PetroChina (00857) to HK$8.26
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