JPMorgan: PetroChina H-Shares - Dividend Beat as 4Q25 Natural Gas Profit Hits Record High

JPMorgan highlighted PetroChina's (0857.HK) strong fourth-quarter 2025 performance, with net income reaching Rmb31 billion, aligning with market expectations. The second-half dividend of Rmb0.25 per share exceeded the consensus estimate of Rmb0.22, resulting in an annualized H-share dividend yield of 5%. PetroChina stands out as the only major Chinese oil giant to maintain its full-year 2025 dividend per share flat year-over-year, whereas Sinopec and CNOOC reduced their payouts by 30% and 8%, respectively. The company's payout ratio increased to 55% under IFRS. The refining segment demonstrated significant operational leverage, with operating profit climbing 54% sequentially to Rmb8 billion, outperforming peers who experienced declining margins. This advantage stems from PetroChina's low reliance on seaborne crude imports, which remain below 15%, shielding it from rising Middle East official selling prices and freight costs. Furthermore, fourth-quarter natural gas operating profit reached a historic high of Rmb29.5 billion. Core earnings, excluding one-off items, also achieved record levels, supported by a 6% year-over-year increase in domestic gas sales volume to 248 billion cubic meters. Upstream total production reached 1.842 billion barrels of oil equivalent, slightly exceeding targets. JPMorgan maintains an Overweight rating with a target price of HK$13.00, citing the dividend beat, improving natural gas margins, and the company's position as a net beneficiary of higher oil prices.