Morningstar: Adjusts fair value forecast for PETROCHINA (00857) by 8%, the company may have prepared for the Middle East crisis.

Morningstar released a research report stating that it has raised the fair value forecast for PETROCHINA (00857), which has no moat, by 8.4%, from 9.5 Hong Kong dollars to 10.3 Hong Kong dollars, while also raising the fair value forecast for (601857). PetroChina's net profit for 2025 decreased by 4% year-on-year, as the increase in oil and gas production by 2% and improved performance in downstream and natural gas businesses partially offset the 14% drop in average realized oil prices. The bank stated that PetroChina's performance exceeded expectations. It is worth noting that PetroChina's marketing business profit increased by 6%, while the same period for Sinopec (00386) decreased by 47%. Additionally, although the profits of the chemical division decreased by 19%, they still outperformed Sinopec's persistent loss-making chemical business. Despite the ongoing conflicts in the Middle East, PetroChina seems well-prepared to deal with potential supply disruptions with its strong channel assets and diversified supply sources. Management stated that energy imported through the Strait of Hormuz accounts for only about 10% of its operational needs. The natural gas sales business showed the most outstanding performance, with operating profit increasing by 13% due to sales growth and procurement optimization. With the improvement in natural gas storage capacity, the bank expects PetroChina's natural gas business profit to continue to grow strongly, as PetroChina can reduce dependence on high-priced spot purchases and stabilize costs.