Morgan Stanley: Gives PETROCHINA a target price of HKD 10.25, still the top choice for natural gas investment in China

Morgan Stanley released a research report stating that as winter approaches, the effects of the previous two warm winters caused by the El Niño phenomenon have dissipated, leading to expectations of a colder winter than usual. Additionally, if the La Niña signal (indicating cooler climate) continues to strengthen, China may experience a natural gas shortage for the first time in five years. PETROCHINA may have significant profit upside, with a target price of HKD 10.25 and a rating of "Overweight." Morgan Stanley believes that PetroChina will remain China's preferred natural gas investment target due to its wholesale natural gas pricing reform, declining import costs, retail participation, and structural demand growth. Morgan Stanley views the company's natural gas business (exploration and production, distribution, and pipelines) as utility assets, and expects that under an oil price range of USD 60 to 65 per barrel, PetroChina's natural gas profits are likely to reach about twice that of oil profits next year. Morgan Stanley further pointed out that the La Niña signal seems to be strengthening, and if it does occur, this winter could become even colder, potentially leading to a natural gas shortage. Therefore, natural gas consumption may surge, and wholesale and retail prices could rise. This winter's natural gas demand growth may accelerate from 2% this summer to a year-on-year increase of 9%