Petrochina Co Ltd (PCCYF)

Price$1.26Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe shares look reasonably priced, but not cheap enough for a clear bargain.

The current quote works out to roughly ten times 2025 earnings using PetroChina's 157.3 billion yuan profit and 183.0 billion issued shares, while one market-data provider reports a somewhat higher trailing multiple. The 2025 dividend totaled 86.0 billion yuan, equal to 54.7% of profit and implying a yield around the mid-single digits at the observed price. That is attractive, but the valuation is richer than several recent years, so there is not enough margin of safety for an Undervalued verdict.

Big pictureCash generation remains strong, but profits still move meaningfully with energy prices.

The supplied SEC-derived history shows operating cash flow staying between about 319 billion and 394 billion yuan from 2017 through 2022 even as net income swung from 19 billion yuan in 2020 to 149 billion in 2022. In 2025, operating cash flow reached 412.5 billion yuan and capital spending was about 269 billion, leaving roughly 143 billion of free cash flow, meaning cash left after running and investing in the business. That durability is valuable, although oil-price cycles can still sharply change reported earnings.

Business strengthLower debt, steady dividends, and growing gas operations provide meaningful downside protection.

The balance sheet has improved substantially. Supplied history shows debt falling from 465.3 billion yuan in 2017 to 323.1 billion in 2022 while cash rose to 191.2 billion. By the end of 2025, borrowings were only 227.6 billion against 206.2 billion of cash. Share capital stayed at 183.0 billion shares from 2024 to 2025, so dilution was negligible. PetroChina also returned 86.0 billion yuan through 2025 dividends, while first-quarter 2026 gas sales rose 6.9%, supporting a broader earnings base beyond crude oil.

What could change the storyFaster gas growth could lift value, while weaker oil prices could expose the valuation.

The strongest bull case is that natural gas, refining improvements, and disciplined spending keep cash flow near recent levels even when crude weakens. First-quarter 2026 profit rose 1.9% despite lower revenue, while gas marketing and refining improved sharply. The bear case is visible in PetroChina's own history: net income collapsed to 19.0 billion yuan in 2020 during an unusually weak energy market. At today's multiple, investors appear to require normal-to-strong earnings rather than a downturn, making sustained gas growth and cash generation the key tests.

AI: News

Browse Gas Stake ExitPetroChina moved toward exiting a costly Australian gas project, reducing future spending exposure.

On June 11, Woodside exercised rights to acquire PetroChina's 10.67% interest in Australia's undeveloped Browse gas fields. The consideration includes $225 million plus certain reimbursed costs and potentially another $175 million. PetroChina originally paid about $1.63 billion for the interest in 2012, highlighting the disappointing investment outcome. Even so, exiting can protect future cash because developing Browse would require substantial additional capital. Any share-price effect specifically attributable to this announcement is uncertain.

Deep Shale Gas PushNew deep shale prospects could extend PetroChina's gas growth, though extraction will be expensive.

In June, Reuters reported that PetroChina and Sinopec were advancing development of ultra-deep shale formations in China's Sichuan Basin at roughly 4,500 to 5,000 meters. The broader formation could eventually support substantial additional gas production, strengthening PetroChina's fastest-growing major fuel business and China's domestic supply security. The trade-off is cost: wells were estimated at $13 million to $15 million each, around 45% more than shallower projects. Commercial returns therefore depend on drilling efficiency and realized gas prices.

First-Quarter Profit GrowthGas and refining gains offset weaker revenue, showing PetroChina can withstand softer crude conditions.

PetroChina reported on April 29 that first-quarter profit attributable to shareholders rose 1.9% to 48.33 billion yuan even though revenue fell. Oil and gas output increased 0.7%, refined-product sales rose 4.8%, and natural-gas sales increased 6.9%. Refining, chemicals and gas marketing also produced stronger operating results. This matters because it shows earnings becoming somewhat less dependent on crude prices. Hong Kong shares had already risen strongly during the year, so that broader move cannot be attributed solely to these results.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	¥2.86T	¥2.94T	¥3.01T	¥3.24T	¥2.61T	¥1.93T	¥2.52T	¥2.37T	¥2.03T	¥1.62T	¥1.73T
Research & development	¥23.55B	¥23.01B	¥21.97B	¥20.02B	¥16.73B	¥15.75B	¥15.67B	¥14.09B	¥12.32B	¥11.23B	¥11.86B
Operating expenses	¥376.84B	¥397.12B	¥421.26B	¥397.54B	—	—	—	—	—	—	—
Operating income	¥241.51B	¥265.64B	¥288.54B	¥216.66B	¥161.15B	¥75.94B	¥121.76B	¥122.94B	¥70.84B	¥60.63B	¥79.25B
Operating margin	8.43%	9.04%	9.58%	6.69%	6.16%	3.93%	4.84%	5.18%	3.49%	3.75%	4.59%
EBITDA	¥477.52B	¥491.82B	¥484.59B	¥446.98B	—	—	—	—	—	—	—
EBITDA margin	16.67%	16.74%	16.08%	13.80%	—	—	—	—	—	—	—
Net income	¥157.30B	¥164.68B	¥161.41B	¥163.98B	¥114.70B	¥33.48B	¥67.02B	¥73.98B	¥39.40B	¥29.37B	¥42.09B
Net profit margin	5.49%	5.61%	5.36%	5.06%	4.39%	1.73%	2.66%	3.12%	1.94%	1.82%	2.44%
Basic EPSper basic share	CN¥0.86	CN¥0.90	CN¥0.88	CN¥0.81	—	CN¥0.10	CN¥0.25	CN¥0.29	CN¥0.13	CN¥0.04	CN¥0.19
Diluted EPSper diluted share	CN¥0.86	CN¥0.90	CN¥0.88	CN¥0.81	—	CN¥0.10	CN¥0.25	CN¥0.29	CN¥0.13	CN¥0.04	CN¥0.19