PetroChina (SEHK:857) Posts Strong Interim Earnings, Is The Stock Still Undervalued?

PetroChina (SEHK:857) reported interim earnings for the half year to June 30, 2026, with sales of CNY 1,527.5b and net income of CNY 103.9b, which is framing current interest in the stock.

The interim results have come alongside a firm share price, with PetroChina trading at HK$10.19 after a 1‑day share price return of 2.21% and a year to date share price return of 19.60%. The 1 year total shareholder return of 44.28% and 5 year total shareholder return of 330.66% point to momentum that has built over a longer horizon, even though the 90 day share price return declined 6.60%.

Compare PetroChina's momentum and earnings story with a hand picked set of value focused peers through the 267 high quality undervalued stocks to see what else is moving on strong fundamentals.

PetroChina's share price has moved ahead of its recent earnings, yet the stock still trades below both analyst targets and some intrinsic value estimates. How wide is that gap, and what does it say about fair value now?

Price to earnings of 10.1x for PetroChina: Is it justified?

On a preferred metric like the P/E ratio, PetroChina trades on 10.1x earnings while the wider Asian Oil and Gas industry averages 12.2x and close peers average 10.8x. At the same time, the stock closed at HK$10.19, which is also described as trading at good value against some intrinsic value estimates.

The P/E ratio compares PetroChina's current share price with its earnings per share. For mature, cash generating businesses in energy, this is a common way investors gauge how much they are paying for each unit of profit. A lower P/E can signal that the market is placing a more cautious label on future earnings, or that investors are simply not willing to pay up for those profits today.

PetroChina is described as having high quality earnings and has grown earnings by 12.3% per year over the past 5 years, yet its current P/E is framed as good value next to both peers and the Asian Oil and Gas industry. That gap is also wide against an estimated fair P/E of 13.8x, which is a level the ratio could move toward if the market were to price the stock in line with that fair multiple view.

Explore the SWS fair ratio for PetroChina.

Result: Price-to-earnings of 10.1x (UNDERVALUED)

However, PetroChina still faces risks from oil and gas price volatility, as well as any shift in domestic policy that could affect returns on its large capital base.

Find out about the key risks to this PetroChina narrative.

Another view on PetroChina's value

The P/E comparison suggests PetroChina is on the cheap side, yet the SWS DCF model paints an even stronger picture. At HK$10.19 the stock is described as trading around 57.1% below an estimated value of HK$23.78. That is a large gap. How comfortable are you with the assumptions behind it?

For a closer look at how that estimate is built and what could shift it over time, Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out PetroChina for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 267 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With PetroChina presenting both potential rewards and clear risks, it makes sense to move quickly and test the data against your own expectations. To weigh both sides together and sharpen your view, take a closer look at the 2 key rewards and 1 important warning sign.

Looking for more investment ideas beyond PetroChina?

If PetroChina has sharpened your view on value, do not stop here. Broaden your watchlist with focused screens that surface different kinds of opportunities.

• Explore potential mispricing by scanning companies that combine quality fundamentals with attractive valuations through the 267 high quality undervalued stocks.
• Focus on income by reviewing businesses that offer higher yields and resilient payout profiles using the 416 dividend fortresses.
• Emphasize resilience by filtering for companies with robust financial positions and solid fundamentals with the list of solid balance sheet and fundamentals (427 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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