- The energy sector of the Hong Kong stock market is showing a trend of net capital inflow against the market, with PetroChina (0857:HK) and CNOOC (0883:HK) both recording intraday gains of over 2%, and Sinopec (0386:HK) also maintaining an upward trend.
- The fundamental data of energy giants provide valuation support, with the combined net profit attributable to shareholders of the three companies exceeding 104.4 billion RMB in the first quarter, achieving positive year-on-year growth across the board, reinforcing the high certainty of mid-term performance expectations.
- The geopolitical tensions between the US and Iran have resurfaced, coupled with the current relatively low macro interest rate environment, CNOOC's dividend yield of up to 5.04% prompts long-term capital to consider such assets as a defensive safe haven.
Shift in Risk Aversion and Capital Allocation
In a trading environment where the overall market trend is under pressure and market risk appetite is temporarily declining, institutional investors are significantly shifting their asset allocation logic. Traditional energy giants, with abundant free cash flow and business models less affected by macroeconomic cycles, are gradually replacing some high-growth but uncertain profit technology stocks, becoming the defensive choice for passive funds and long-term capital. The single-day upward surge of PetroChina and CNOOC reflects the pursuit of certainty premium by capital. This cross-sector capital rotation usually has strong sustainability during periods of marginal liquidity tightening or rising external macro uncertainties.
First Quarter Performance Shows Profit Resilience
Analyzing from the financial fundamentals, the performance of large Chinese energy companies at the start of the year has laid the financial foundation for the current valuation recovery. The latest disclosed data shows that the combined net profit attributable to shareholders of the three core energy companies reached the level of 104.4 billion RMB in the first quarter, achieving a year-on-year increase despite last year's relatively high base. This data not only dispels previous market concerns about the potential drag on energy demand from a slowdown in global economic growth but also confirms the high operational efficiency of these companies in cost control, capital expenditure optimization, and upstream and downstream synergy. If the oil price center can remain in the current range in the second quarter, their semi-annual profit expectations are likely to be further revised upwards.
Reassessment of Geopolitical Premium
In the pricing model of crude oil assets, geopolitical risk premium has always been a core variable causing short-term high-frequency fluctuations. Recently, the geopolitical situation in the Middle East has shown signs of complexity again, especially the related developments in US-Iran relations, directly boosting the weighting of commodity trading advisor strategies on the potential for unexpected supply disruptions. The oil price premium, which was previously squeezed due to expectations of some ceasefire negotiations, is now rapidly recovering. This expectation of supply-side vulnerability is transmitted to the secondary market, directly translating into valuation elasticity for CNOOC and PetroChina, which have a larger proportion of upstream exploration and production.
Long-term Dividend Expectations
In addition to the potential for capital gains, continuous and stable cash dividends are another core pillar supporting the revaluation of energy stocks in this round. Taking CNOOC as an example, its currently disclosed dividend yield indicator has reached 5.04%. Against the backdrop of potential fluctuations in the long-term government bond yield expectations of major global economies, a risk-free arbitrage alternative yield of over 5% is highly attractive to institutions such as sovereign wealth funds and insurance funds that pursue absolute returns. The consistency and commitment of management in dividend policy essentially build a solid downward valuation safety net for such assets. If the global inflation center remains above 2% in the long term, the strategic allocation value of such high-dividend assets with inflation-resistant properties may be further explored.
