PetroChina (601857. SH): after 12 years of listing, it has dropped by more than 86%. Has Buffetts buying point arrived yet again?
Once the most profitable company in Asia, the stock price is now falling to the bottom step by step.
On October 31, PetroChinas a share price fell again, with the latest closing price of 5.88 yuan, another record low. Compared with the highest price in history, PetroChinas share price has dropped nearly 90%. Since this year, PetroChina A shares have fallen by 16.33%.
In Hong Kong stocks, PetroChina shares fell 3.99% today, closing at HK $3.85, or about 3.46 yuan. However, there is still a large premium space for PetroChina ah shares. The latest closing price of a shares is nearly 70% higher than that of Hong Kong shares.
Market value evaporated by 180 billion in the third quarter
Since this year, the share price of PetroChinas A-share has hit a record low. On August 6, the companys share price fell below the record low set on June 25, 2013. Then on August 15 and 26, the share price hit another record low. Today, the closing price of PetroChina is set at 5.88 yuan, which is the lowest price. The share price has once again set a new record low.
According to the latest closing price, the total market value of PetroChina is 1.08 trillion yuan. Compared with the historical peak, the total market value of the company has evaporated by 7.12 trillion yuan. Compared with the end of the second quarter of this year, the market value of PetroChina has evaporated by 183.02 billion yuan.
From the perspective of shareholders, institutional investors with fund companies as the main body continued to withdraw from PetroChina in the third quarter. In the third quarter of 2019, the fund held 350 million shares of PetroChina, a decrease of 178 million shares compared with the end of the second quarter.
However, northbound capital, known as smart capital, is still adding positions. In terms of the top ten tradable shares before, Beishang capital increased its shareholding by 4.1334 million shares in the third quarter, with the latest shareholding of 2.3938 million shares, accounting for 0.13% of the companys total equity.
Along with the decline of stock price, the continuous flight of A-share shareholders of PetroChina. In 2007, the companys first financial report showed that the number of A-share shareholders of PetroChina reached 1.88 million, while in the first quarter of 2008, the number of A-share shareholders reached a historical peak, exceeding 2 million. At the end of the third quarter of this year, there were 604000 A-share shareholders of PetroChina, but compared with the end of the second quarter, the number of shareholders increased by 34000.
Net profit fell by more than 20% in the first three quarters, oil price trend became the key
On the evening of October 30, the third quarter report of PetroChina in 2019 showed that the companys revenue in the first three quarters was 1814.403 billion yuan, an increase of 5.08% year on year; the net profit attributable to the parent company was 37.282 billion yuan, a decrease of 23.38% year on year.
As for the reasons for the decline in performance, PetroChina said in the third quarter report that the supply and demand in the international oil market were generally loose, the international oil price continued to rise at the beginning of the year and then fluctuated downward, with the average price declining year-on-year. The average spot prices of Brent crude oil in the North Sea and West Texas Intermediate crude oil in the United States were $64.59/barrel and $57.08/barrel, respectively, 10.5% and 14.7% lower than the same period last year, The domestic refined oil market has loose supply and demand, intensified overcapacity and fierce market competition; the demand for natural gas market has continued to grow rapidly, but the growth rate has slowed down. Influenced by the decline of international oil price and the fierce competition in domestic refined oil market, the companys operating performance decreased year on year.
Sinopec, another chemical company, also performed poorly. Sinopecs third quarter report shows that its revenue in the first three quarters of 2019 was 2233.305 billion yuan, up 7.7% year-on-year; its net profit attributable to the parent company was 43.281 billion yuan, down 27.8% year-on-year. In terms of market performance, Sinopecs share price also fell today, down 1.21%.
In addition, the performance of many chemical companies this year is sluggish, such as Shenyang chemical industry, international industry, high tech petrochemical, etc. net profit in the first three quarters fell by more than 30% year-on-year.
On the whole, in the case of unsatisfactory performance in the first three quarters, the international oil price in the fourth quarter will become an important factor affecting the final performance of two barrels of oil in 2019.
Nearly 70% premium of a shares over H shares
Although the share price is again low, there is still a large premium space between PetroChina A shares and Hong Kong shares. As of the latest, the latest closing price of PetroChinas a shares has a premium rate of nearly 70% compared with the closing price of Hong Kong shares. In other words, PetroChinas a share price is still nearly 70% higher than Hong Kongs.
The decline in performance triggered the international bank to lower the valuation of PetroChinas Hong Kong shares. Lyon reported that PetroChinas third quarter performance was lower than expected, the weakest quarter for the group this year. The decline was mainly due to weak oil prices, slowing demand for natural gas and oversupply in the mainlands refining and chemical sectors. Meanwhile, the bank cut its target price for PetroChina from HK $4.6 to HK $4.4. Lyon said that PetroChinas share price is cheap, and its current valuation is even lower than its low level in the global financial crisis, but that the groups share price upside space is limited.
Citi, another institution, reported that PetroChinas net profit in the third quarter of this year was 8.8 billion yuan, lower than the banks expected 10 billion yuan. Although the refining and sales performance of CNPC has improved, the low oil price has weakened the exploration and production business, in addition, the loss of imported natural gas has increased, resulting in the performance of CNPC lower than expected. In addition, CNPCs net profit for the first nine months of this year was more than rmb37 billion, accounting for only 56% of the banks original full year forecast. Citigroup lowered its target price for PetroChina shares to HK $4.7 from HK $5.8, and lowered its profit forecast for this year to reflect an increase in losses on imported natural gas.
Source: Securities Times Author: Chen Jing, editor in charge: Zhong Qiming, nf5619