On Jul 8, 2014, we issued an updated research report on
PetroChina Co Ltd.
). China's impressive economic growth has significantly increased
its demand for oil and chemicals. We believe that PetroChina− the
largest integrated oil company in China − is well positioned to
capitalize on the country's favorable trends. The positive is
reflected in PetroChina's current Zacks Rank #2 (Buy) - implies
that the company is expected to outperform the broader U.S. equity
market over the next one to three months.
Another lucrative growth area for PetroChina is its natural gas
business, which is likely to see a boom in the coming years as
China moves from coal to natural gas. At present, two-thirds of
China's electricity is generated by coal-fired power plants, which
emit greenhouse gases that lead to pollution.
Moreover, strong growth in China's middle class and in automobile
ownership is expected to fuel consumption of refined petroleum
products. Though PetroChina's downstream operations are primarily
located in China's relatively poor Northern regions, this would be
an advantage in the long run.
We also like PetroChina's recent natural gas deals in Canada and
Australia. The Chinese behemoth's plans - to form a joint venture
in Canada's Alberta to develop natural gas/condensates assets and
purchase interests in the proposed Western Australian Browse
liquefied natural gas (LNG) project - will provide it with a global
resource and market base, making the company a leading
international energy player. Additionally, these ventures will also
provide a hedge against the uncertain Chinese product pricing
Other Stocks that Warrant a Look
Apart from PetroChina, one can also consider other players in the
energy sector like
Energy Transfer Partners LP
Matrix Service Company
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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PETROCHINA ADR (PTR): Free Stock Analysis
CONOCOPHILLIPS (COP): Free Stock Analysis
MATRIX SERVICE (MTRX): Free Stock Analysis
ENERGY TRAN PTR (ETP): Free Stock Analysis
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