---
endpoint: analytics
pattern: Energy
status: done
latency_ms: 238832
conversation_id: 3c31d79b-8520-4244-9197-93e40e69ef68
citations: 0
created: 2026-05-31 18:58:21Z
---

# Is CLSA incrementally more positive/negative on PetroChina. If so, why?

**Verdict: Yes — CLSA is incrementally MORE POSITIVE on PetroChina.** Lead analyst Horace Tse has reiterated **Outperform (O-PF)** across the last three notes but the *tone, conviction, and relative ranking* have stepped up materially. PetroChina is now CLSA's **most-preferred name among the Chinese oil majors**, ahead of CNOOC and Sinopec [2][8].

The headline 12-month TPs have been broadly stable (H-share HK$8.00 / A-share Rmb11.20 [9]), but the **investment case has strengthened over time** — the upgrade is in *tone and ranking*, not just numbers.

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## Evolution of the CLSA call

| Note | Date | Title | Rating | TP H/A | Key delta |
|---|---|---|---|---|---|
| Bearing fruit | 29-Apr-2025 | 1Q25 results review | O-PF (reit.) | HK$8.00 / Rmb11.20 (unchanged) [1] | "Most resilient Chinese oil major this results season"; elevated to **top pick** among Chinese oil majors [1][2] |
| All you need is yield | 30-Mar-2025 | FY24 results review | O-PF (reit.) | HK$8.00 / Rmb11.20 (**raised** from HK$7.90 / Rmb11.10) [5] | 2024 dividend payout lifted 2ppt YoY to **52% — the only Chinese oil major to lift payout** this results season [5] |
| Rising tide | 15-Jun-2025 | Global energy sector (Israel-Iran) | O-PF (reit.) | HK$8.00 / Rmb11.20 (unchanged) [9] | PetroChina has **outperformed Sinopec/CNOOC by 26%/21%** and oil prices over the past 2 months; outperformance expected to **continue** [8] |

The trajectory of TPs (Oct-24 HK$8.30 → trimmed to HK$7.90 in early-2025 sector notes on lower oil deck → raised back to HK$8.00 on Mar-25 results → held at HK$8.00) shows that the **macro oil price cut has been offset by company-specific upgrades**, while the qualitative case has only strengthened.

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## Why CLSA is incrementally more positive — the four drivers

### 1) Natural gas monetisation is "bearing fruit" (multi-year theme)

This is the single biggest reason for the more positive stance. The Apr-2025 note is explicit: *"PetroChina's earlier investments in the natural gas market has finally started to bear fruit, and we believe this monetisation will be a **multi-year process**"* [3].

- **1Q25 natural gas EBIT +10% YoY** — driven by 4% YoY sales volume growth plus higher ASP from **residential gas price hikes during the winter heating season** [3].
- 4Q24 natural gas EBIT had already been +22% YoY on the same dynamic [6].
- CLSA flags the **policy tailwind**: the Chinese government's more relaxed approach to utility price hikes in a deflationary environment is letting PetroChina execute winter price hikes that *"PetroChina has not been able to do in the past"* [3]. Post-winter 2025 city-gate adjustments (Apr–Oct 2025) imply another ~3% YoY uplift [6].

### 2) Shareholder return uplift — the only Chinese major to lift payout

The Mar-2025 results note is structurally important — it locked in PetroChina's "yield" identity:

- **2024 dividend payout lifted 2ppt YoY to 52%** — *"the only Chinese oil major to lift its payout YoY this results season"* [5].
- **8.3–8.8% dividend yield** at current prices, expected to be sustained through 2027 [11].
- **2025 capex budgeted at Rmb262bn (-5% YoY)** — the first YoY decline after three years flat at Rmb275bn, *"which we believe leaves more room for the company to boost its shareholder return in the form of a higher dividend payout"* [6].

### 3) E&P resilience surprised positively — case for "less E&P-reliant" earnings

- **1Q25 NP Rmb46.8bn (+2.5% YoY, +46% QoQ)** — running at ~30% of CLSA's/consensus FY25E, "the strongest among Chinese Oil majors" [4].
- **1Q25 E&P EBIT +7% YoY** despite oil/gas production up only 1% YoY and realised prices down 7%/4% YoY — i.e. PetroChina demonstrated operating-level resilience that defied the macro headwind [4].
- CLSA's investment thesis explicitly: *"A revival of its natural gas business, coupled with a more resilient downstream profitability, suggest PetroChina is now **less reliant on its E&P segment** relative to history. This should translate to more steady earnings even if oil prices are under pressure, giving investors confidence in its dividend sustainability"* [7].

### 4) Relative ranking elevated to top pick — and validated by the tape

The Jun-2025 sector note is where the call becomes most explicit:

- CLSA retains the **order preference of PetroChina → CNOOC → Sinopec** [8].
- The relative trade has worked: **PetroChina has outperformed Sinopec/CNOOC by 26%/21% over the past 2 months and outperformed oil prices**, and CLSA expects *"diverging share price performance to continue"* [8].
- Contrast with Sinopec: chemical division loss-making for 12 consecutive quarters, downstream still dragged by weak domestic demand [8].
- In the Apr-2025 note Horace explicitly states: *"PetroChina is our most preferred name among the Chinese Oil majors"* [2].

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## What's the valuation/risk case underpinning it

- **Valuation anchor**: 8x 25CL PE plus 8% dividend yield, called *"attractive both relative to its own history as well as global integrated oils"* [2].
- **SOTP TP of HK$8.00**: E&P Rmb800bn (DCF, 8% WACC, 0% terminal growth, US$75/70 oil assumption for 25/26CL, US$70 LT), R&C 4x EV/EBITDA, marketing 3x, NG 1.2x P/B [10].
- **2025–27 forecasts**: NP ~Rmb156bn flat-ish, ROE ~9–10%, net cash position to build (net debt/equity moving from +3.8% in 2024 to **-18.1% by 2027CL**) [11].
- **Macro overlay** (Jun-2025): OPEC+ spare capacity is set to fall to **c.3mb/d after the OPEC+ unwind completes by end-2025** — a level at which oil price volatility would *"become extreme"* and small supply disruptions could trigger large spikes; CLSA frames oil equities as **a cheap hedge to rising volatility** [12].
- **Key downside risks**: slower-than-expected China natural gas demand growth and lower oil prices than base case [7].

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## Bottom line

CLSA's PetroChina call has shifted from "Outperform but one of several" (Oct-2024 "Positive vibes") to *"All you need is yield"* (Mar-2025, payout uplift) to *"Bearing fruit"* (Apr-2025, top pick) to *"outperformance to continue"* (Jun-2025). The headline TP has barely moved, but the **conviction and relative positioning have moved unambiguously higher**, anchored on three reinforcing pillars: multi-year natural gas monetisation, sector-best dividend trajectory, and demonstrated 1Q25 resilience against a weak China downstream tape — all set against a constructive oil volatility backdrop into 2H25.

---

**Sources**
[1] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF
[2] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF (rating reiteration / "most preferred name" passage)
[3] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF (natural gas "bearing fruit" passage)
[4] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF (1Q25 NP passage)
[5] All you need is yield — CLSA (30 Mar 2025) — 607954432LinqAlpha.PDF (dividend payout uplift)
[6] All you need is yield — CLSA (30 Mar 2025) — 607954432LinqAlpha.PDF (FY24 results, capex, gas)
[7] All you need is yield — CLSA (30 Mar 2025) — 607954432LinqAlpha.PDF (investment thesis & risks)
[8] Rising tide (Global energy) — CLSA (15 Jun 2025) — 607961993LinqAlpha.PDF (PetroChina outperformance & order preference)
[9] Rising tide (Global energy) — CLSA (15 Jun 2025) — 607961993LinqAlpha.PDF (PetroChina TP table)
[10] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF (Valuation paragraph / SOTP assumptions)
[11] Bearing fruit — CLSA (29 Apr 2025) — 607957521LinqAlpha.PDF (Financials table 23A–27CL)
[12] Rising tide (Global energy) — CLSA (15 Jun 2025) — 607961993LinqAlpha.PDF (OPEC+ spare capacity / volatility hedge)

