Event:
The company released its quarterly report of Q1 2009 today; according to domestic Accounting Standards for Business Enterprises, net profit attributable to shareholders of parent was Rmb11.19bn (+84.7% yoy) and basic EPS pegged at Rmb0.129; however, net profit attributable to shareholders of parent was Rmb11.219bn (+85.1% yoy) and basic EPS and diluted EPS stood at Rmb0.129 as per the international Accounting Standards for Business Enterprises.
Our Analysis and Estimation
1. Performance of Q1 2009 enjoys high growth due to the oil price and related policy.
2. Exploration business slides to some extent in 2009, but its impact is of limit due to small proportion.
3. Oil refining sales rapidly recovers in 2009, being the main force of profiting.
4. Business of chemical industry contributes limitedly.
5. 2009 EPS is forecasted to be Rmb0.64.
6. 2009-2010 international oil price will fluctuate around USD50.
Investment Suggestion
The company’s 2009-2011E EPS is forecasted to be Rmb0.64, Rmb0.65 and Rmb0.72 respectively, representing P/E ratio at 14.8x, 14.5x and 13.1x based on current share price, thus we maintain “Recommended” rating for the counter.