PetroChina & CNOOC Valuation Re-Rating: Post-Shale Dynamics & Cash Cow Transition

The Xueqiu post argues that recent price increases for PetroChina and CNOOC reflect a deep valuation re-rating. Key points include:

1. Post-Shale Era Supply Rigidity
   : Oil prices have a lifted floor due to reduced flexibility in supply (US shale’s declining growth potential).
2. Cyclical to Cash Cow Transition
   : High dividends and stable cash flow are shifting these companies from cyclical stocks to cash cow assets.
3. Extreme Valuation Discounts
   : Persistent low P/B ratios and high dividend yields vs international peers (e.g., ExxonMobil, Chevron) create large room for valuation repair in low-interest-rate environments.

Analyst data supports the post’s claims:

• Valuation Discounts
  : PetroChina has a P/B ratio of 0.94 (50% discount to ExxonMobil’s 1.90) and a dividend yield of5.81% (vs Exxon’s3.51% and Chevron’s4.41%). CNOOC’s P/B ratio of1.24 is a35% discount to Exxon’s, with a dividend yield of6.52%.
• Market Dynamics
  :
  • IEA: 2025 global oil market is in “marginal tight balance” with inventories still below historical averages.
  • EIA: Record US production (1.06亿 barrels/day) may lead to supply surplus in2025.
  • OPEC: 2025 demand growth of130万桶/day, with a small surplus expected in2026.
• Inventory Sensitivity
  : OECD commercial inventories are6700万桶 below the5-year average, making markets highly sensitive to supply disruptions.

The post’s core narrative (valuation re-rating) aligns with analyst data on significant discounts and higher dividend yields. While institutions differ on supply outlook (IEA’s tight balance vs EIA’s surplus), tight inventories and post-shale supply rigidity support the lifted oil price floor argument. This strengthens the case for the cyclical-to-cash-cow transition, especially in low-interest-rate environments where high dividends are attractive.

• Opportunities
  : Further valuation repair to international peer levels; stable oil prices driving dividend growth.
• Risks
  : Unexpected supply increases (per EIA); demand slowdown; geopolitical shocks; regulatory changes impacting dividends.