The Zhitong Finance App learned that Everbright Securities released a research report saying that in the first three quarters, China Petroleum (601857.SH, 00857) showed significant advantages in the entire industry chain, and maintained the company's profit forecast. The company's net profit for 26-28 was 1902/1959/2018 yuan respectively, corresponding to EPS of 1.04/1.07/1.10 yuan/share, respectively. It is optimistic about the company's potential to “increase storage and production” and the long-term growth of the natural gas business, maintaining the “buy” rating of the company's A+H shares.
Incident: The company released its 2026 three-quarter report. In the first three quarters of 2026, the company achieved operating income of 2321.1 billion yuan, +7.0% year-on-year (after traceability, same below), and achieved net profit of 155.8 billion yuan, or +21.9% year-on-year. In the 2026Q3 single quarter, the company achieved revenue of 793.6 billion yuan, +10.4% year-on-year, +0.3% month-on-month, and realized net profit of 51.8 billion yuan, +21.6% year-on-year and -6.8% month-on-month.
The main views of Everbright Securities are as follows:
1. The two major oil and gas industry chains operated efficiently, and the first three quarter results reached new highs
In the first three quarters of 2026, due to the geographical conflict in the Middle East, international oil prices fluctuated upward. The average oil price was 88.78 US dollars/barrel, +26.9% over the same period last year. Domestic new energy substitution has accelerated, and demand for refined oil products has decreased; domestic natural gas consumption has declined slightly. The company actively responded to changes in the macroeconomic, geopolitical and energy and chemical market situation at home and abroad, such as the turbulent geological situation in the Middle East, wide fluctuations in international oil prices, new energy substitution, and falling demand for refined oil products, actively and effectively organized production and operation, further strengthened oil and gas exploration and development efforts, diversified resource raising, ensure the high-load operation of refining and chemical plants, and ensure the safety of the industrial chain, supply chain and stable market supply. The performance in the first three quarters reached a record high. In the first three quarters, the company achieved net profit of 155.8 billion yuan, +21.9% year-on-year, and achieved operating cash flow of 373.5 billion yuan, or +8.8% year-on-year.
In the first three quarters of 2026, the company's upstream business was affected by rising crude oil sales prices and achieved operating profit of 152 billion yuan, +19.7% over the same period last year. Benefiting from increased natural gas sales and optimization of resource-side and client-side structures, the company's natural gas sales business achieved operating profit of 33.3 billion yuan, +6.4% over the same period last year. Thanks to the increase in gross profit from refined chemical products, the company's refining business achieved operating profit of 18 billion yuan, +24.7% year on year, chemical business achieved operating profit of 5.1 billion yuan, +185.7% year on year, and sales business achieved operating profit of 14.5 billion yuan, +24.7% year on year.
II. Segment review: Upstream insists on “increasing storage and production” and advancing refining and chemical transformation and upgrading in depth
1. Upstream strengthens domestic resource supply capacity, and the new energy business develops rapidly
In the first three quarters of 2026, the company's oil and gas and new energy division achieved operating profit of 152 billion yuan, +19.7% year-on-year, of which Q3 operating profit was 51.6 billion yuan, +29.4% year-on-year, and -13.2% month-on-month, mainly due to rising crude oil prices, increased natural gas production, and the company's vigorous control of oil and gas production costs. In the first three quarters of 2026, the average realized price of the company's crude oil was 77.65 US dollars/barrel, +18.5% year on year; the average sales price of natural gas was 2.21 yuan/square meter, excluding the exchange rate effect of +1.7% year on year. The company's domestic business has stepped up exploration and development efforts to increase oil and gas storage and production; the overseas business actively responds to changes in the geographical situation, strives to promote safe and smooth operation of production, coordinate the operation of existing projects and the development of new projects, and continuously optimize the asset structure; the new energy business promotes the acquisition of indicators and project construction in an integrated manner, and strengthens integrated development with the oil and gas business. In the first three quarters of 2026, the company's oil and gas equivalent production was 1376.8 million barrels of oil equivalent, basically the same as the previous year. Its crude oil production in China was 590.4 million barrels, -0.2% year on year, domestic natural gas production was 111.82 billion square meters, +2.3% year on year, and domestic oil and gas equivalent production was 1248.3 million barrels of oil equivalent, +1.1% year over year. The development of the company's new energy business accelerated in the first three quarters, with wind and solar power generation capacity of 7.84 billion kilowatt-hours, +35.5%; built a geothermal heating (cooling) area (including operation and maintenance) of more than 80 million square meters; and carried out the construction of a zero-carbon demonstration plant to fully promote carbon dioxide capture, utilization and storage.
2. The volume efficiency of the natural gas sales business increased, and operating profit increased steadily
In the first three quarters of 2026, the company's natural gas sales business achieved operating profit of 33.3 billion yuan, +6.4% year-on-year, including Q3 operating profit of 9.2 billion yuan in a single quarter, -27.2% year-on-year and +76.4% month-on-month. The company continues to increase marketing efforts, strive to increase natural gas sales, continuously expand the domestic market share and share of sales in the high-end and efficient market; optimize the gas source structure, optimize the gas storage tank injection rhythm, effectively control comprehensive procurement costs, and strive to improve sales efficiency; actively expand the terminal sales network, and the terminal market size is growing steadily. In the first three quarters of 2026, the company sold 231.32 billion cubic meters of natural gas, up 3.0% year on year. It sold 178.735 billion cubic meters of natural gas in China, up 1.0% year on year.
3. Refining and chemical engineering ensure the smooth operation of the plant, and advance the transformation and upgrading project in depth
In the first three quarters of 2026, the company's refining, chemical and new materials division achieved operating profit of 23.1 billion yuan, +42.4% year-on-year, of which the refining business achieved operating profit of 18 billion yuan, +24.7% year-on-year, mainly due to increased gross profit per unit of refined products; the chemical business achieved operating profit of 5.1 billion yuan, +185.7% year-on-year, mainly due to increased sales of chemical products and unit gross profit. In the 2026Q3 single quarter, the company's refining business achieved operating profit of 6.3 billion yuan, +31.4% year-on-year, +38.1% month-on-month, and the chemical business achieved operating profit of 2.3 billion yuan, +485.6% year-on-year and +37.3% month-on-month.
The company strengthened production and operation organization to ensure the safe, stable, long-term and high-load operation of refining and chemical plants, and continuously optimizing the product structure to effectively meet market demand; continuously promoting refining transformation and upgrading, and actively developing fine chemicals and high-end new materials and biomanting businesses. Dushanzi Petrochemical Company's 1.2 million tons/year Tarim Phase II ethylene and supporting green and low-carbon demonstration projects were fully put into commercial operation. Blue Ocean New Materials's high-end polyolefin materials project was handed over.
4. Increase the market share of refined oil products and vigorously develop non-oil business
In the first three quarters of 2026, the company's sales business achieved operating profit of 14.5 billion yuan, +24.7% year over year. Mainly due to the increase in international trade business profit, Q3 achieved operating profit of 3.1 billion yuan in a single quarter, -22.8% year on year and -35.9% month on month. The company actively responds to the market situation, continuously strengthens marketing, strengthens lean marketing in market segments, and strives to promote sales of refined oil products; continues to vigorously develop LNG terminal filling, charging and switching, and non-oil business. The profit of the non-oil business continues to grow. By the end of September 2026, the number of the company's gas stations was 2,1955, down 0.8% from the end of 2025, including 20,436 self-operated gas stations and 19993 convenience stores, up 0.9% from the end of 2025. In the first three quarters of 2026, the company sold a total of 114.656 million tons of gasoline, kerosene and diesel, -5.1% year-on-year; domestic sales of 84.52 million tons of gasoline, kerosene, and diesel were -5.7%.
3. Relying on the advantages of the entire industry chain to cross the cycle, the strategic value of energy security is highlighted under geographical uncertainty
Recently, the military conflict between the US and Iran in the Middle East has been suspended, but the US policy attitude towards Iraq is still unclear after the midterm elections. The armed conflict between Saudi Arabia and the Houthis intensified, and geographical risks caused oil prices to remain high and volatile; global supply of refined oil products is tightening, and stocks will continue to be tight until the first half of 2027. Currently, domestic oil and gas are still highly dependent on the outside world. Geographical conflicts threaten the security of the global energy supply chain, and the task of China's oil and gas security is still arduous. As an important energy state-owned enterprise, “Three Barrels of Oil” is expected to continue to increase oil and gas exploration, development, storage and production, consolidate the domestic production base, and at the same time participate deeply in global energy governance, improve the construction of energy transportation channels, and highlight the strategic value of energy security and supply.
The company continues to increase storage and production, and plans to increase oil and gas equivalent production by 0.6% in '26; accelerate the transformation of the middle and downstream refining and chemical business, promote low-cost “oil conversion” and high-value “oil transfer”; the sales sector is actively transforming into an “oil, gas, and hydrogen electric service” integrated energy service provider; and the chemical business is steadily increasing the proportion of high-value-added products. The company will continue to be based on long-term principles, proactively respond to changes in the macro environment and market, give full play to its advantages, continue to enhance value creation capabilities, and is expected to achieve long-term growth through the oil price cycle.
Risk warning: Risk of falling crude oil and natural gas prices, risk of declining refining and chemical boom.