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Kunlun Energy

Deutsche Bank

Markets Research

Date

23 August 2017

Rating
Company

Buy

Asia

Kunlun Energy

Results

China

Price at 21 Aug 2017 (HKD) Price target - 12mth (HKD) 52-week range (HKD)
7.45 8.50

Reuters

0135.HK

Bloomberg

135 HK

Exchange Ticker

HSI 0135

Utilities

Utilities

7.95 - 5.55

  • 27,155
  • HANG SENG INDEX

Core profit growth in line; robust volume with slightly lower margin

Valuation & Risks

Hanyu Zhang

Kunlun's 1H17 core net profit rose by 14% yoy to Rmb2.7bn, in line with our expectations and accounting for 58/62% of DBe/consensus full year forecast. Volume was as strong as expected with 12-184% yoy growth in four gas related segments. Similar with gas utilities peers, Kunlun recorded a Rmb2cents/cm yoy (flat hoh) decline in EBITDA margin for gas sales segment due to market competition and failure to pass through PetroChina's winter citygate price hike. Mgmt expect the volume momentum to continue and margins to recover a bit HoH in 2H17. Kunlun is the beneficiary of China's structural growth in both piped gas and the LNG value chain and is trading at an undemanding valuation of 11x 2018E P/E. Maintain Buy.

Research Analyst +852-2203 6207

Michael Tong, CFA

Research Analyst +852-2203 6167

Price/price relative

10 7.5
5

By segment results review

Kunlun's 1H17 reported net profit was flat yoy at Rmb2.4bn. If adding back

2.5

  • Jan '16
  • Jul '16
  • Jan '17
  • Jul '17

Rmb325mn attributable impairment loss, core net profit rose by 14% yoy to Rmb2.7bn. On the positive side, transmission segment net profit increased by 9% yoy to Rmb1.9bn (accounting for 70% of total core profit) driven by 15% volume growth. E&P segment turned profitable with a Rmb161mn net profit (vs. Rmb188mn loss in 1H16). LNG terminal segment net profit more than doubled

yoy to Rmb313mn. While on the negative side, gas sales segment core PBT

declined by 15% yoy mainly dragged by higher financial cost and a Rmb2cents/ cm yoy (flat hoh) decline in EBITDA margin (excl. one-off impairment) despite a volume growth of 12%. LNG processing segment continued to make losses as expected.

  • Kunlun Energy
  • HANG SENG INDEX (Rebased)

Performance (%) Absolute
1m 3m 12m -3.1 5.8 22.9

  • 1.7 7.9 18.4
  • HANG SENG INDEX

Source: Deutsche Bank

Key indicators (FY1)

  • ROE (%)
  • 12.5

13.1 5.64
1.3
Net debt/equity (%) Book value/share (HKD) Price/book (x)

SJ line tariff cut still in discussion and we believe the risks well priced in

Kunlun's mgmt is actively bargaining with the central govt for a potential tariff

  • Net interest cover (x)
  • 53.6

  • Operating profit margin (%)
  • 13.1

cut of the SJ pipeline and will put Line IV into operations asap (target by end 2017) to ensure those assets are included in the ROA calculation. Kunlun's mgmt is confident about future volume growth and expects a better gas sales dollar margin for 2H17 vs. 1H17 with less impact from PetroChina's winter price hike. Kunlun has lower-than-peer dollar margins with Rmb0.54/cm for residential, Rmb0.41/cm for industrial and Rmb0.53/cm for commercial users, which makes it less vulnerable to potential dollar margin/return control by local govts.

Source: Deutsche Bank

Valuation and risks

Our TP of HKD8.5 is based on SOTP (Fig.3). Key risks:lower-than-expected volume growth, a harsher-than-expected SJ tariff cut, and lower oil prices.

Deutsche Bank AG/Hong Kong

Distributed on: 23/08/2017 15:12:06 GMT

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017.

0bed7b6cf11c

23 August 2017 Utilities Kunlun Energy

Forecasts and ratios

Year End Dec 31 Sales (HKDm)
2015A 41,641 12,448
137
2016A 81,882 12,915
659
2017E 87,355 17,810
5,418 0.671 0.671
23.4
2018E 87,832 15,628
5,394 0.668 0.668
-0.4
2019E 92,865 16,398
6,328 0.784 0.784
17.3
EBITDA (HKDm) Reported NPAT (HKDm) Reported EPS FD(HKD) DB EPS FD (HKD) DB EPS growth (%) PER (x)
0.017 0.463 -33.9 15.7
0.082 0.544
17.4 11.1
1.1

  • 11.1
  • 11.2
  • 9.5

  • Price/BV (x)
  • 1.1
  • 1.3
  • 1.2
  • 1.1

  • EV/EBITDA (x)
  • 7.0
  • 6.3
  • 5.1
  • 6.0
  • 5.5

DPS (net) (HKD) Yield (net) (%)
0.200
2.8
0.060
1.0
0.074
1.0
0.101
1.4
0.134
1.8

  • ROE (%)
  • 0.3
  • 1.5
  • 12.5
  • 11.3
  • 12.1

Source: Deutsche Bank estimates, company data

Page 2
Deutsche Bank AG/Hong Kong
23 August 2017 Utilities Kunlun Energy

1H17 results review and by segment analysis

Kunlun's 1H17 reported net profit was flat yoy at Rmb2.4bn. If adding back oneoff impairments (Rmb100 impairment in Zhaoqing plant and Rmb329 impairment on accounts receivables in gas sales segment, with a total of Rmb325mn loss on attributable basis), core net profit increased by 14% yoy to Rmb2.7bn. Adjusted EBITDA (after adding back impairment) increased by 18% yoy to Rm9.5bn,

At profit before tax (PBT) level, we see positive growth momentum in transmission (+10% yoy), LNG terminal (+273% yoy) and E&P segment (turn profitable from loss). While on the other hand, gas sales segment PBT dropped by 15% yoy (excl. impairment) dragged down by lower margins and higher financial costs. LNG processing segment is still making losses as expected. See detailed analysis by segment below:

Gas transmission segment: robust volume growth with tariff risks priced in

In 1H17, Kunlun's total transmission volume increased by 15% yoy to 20.2bcm of which ShaanJing pipeline recorded a 13% volume growth to 18.7cm. The ASP edged down by Rmb2cents/cm yoy to Rmb0.31/cm mainly due to the mix change, i.e higher volume growth for short-distance gas sales.

Kunlun aims to put the SJ pipeline IV into operation by end-2017, after which the total transmission capacity should expand to 50bcm from 35bcm. Mgmt expect Kunlun's transmission volume to continue to benefit from China's accelerating gas demand growth especially in Beijing-Tianjin-Hebei area.

Mgmt is still in active negotiations with the central government about the magnitude and timing of the tariff cut and argues that the SJ IV pipeline asset should be included in the asset base calculation. We believe the share price has already priced in the potential ShaanJing tariff cut, which has been discussed by the market for more than a year. We assume a potential 27% tariff cut would occur in Oct 2017. Every RMB1cent/cm change in the tariff would affect 3.5% of Kunlun’s earnings.

Gas sales segment: accelerating volume growth offset by weaker margins

In 1H17, Kunlun's gas sales volume (incl.LPG) growth accelerates to 12% yoy (vs. 4% in 2016) and city gas segment recorded 18% yoy volume growth. However, similar with peers, Kunlun recorded a EBITDA margin squeeze of Rmb2cents/cm yoy (or flat hoh) in gas sales segment (after adding back Rmb329mn impairment on accounts receivables) , which is mainly due to the failure of pass-through of PetroChina winter citygate price hike (Nov 16-Mar 17).

Dragged down by margin squeeze, higher financial costs and the impairment, gas sales segment PBT was down 35% yoy to Rmb1.0bn. If excl. impairment, core PBT was down 15% yoy (or up 20% hoh) to Rmb1.3bn. Gas sales segment profit is quite sensitive to EBITDA margins as it is very thin at Rmb0.18/cm. Every Rmb1cent/cm change in EBITDA margin impacts segment PBT by 12%.

Mgmt expects margins to recover a bit HoH in 2H17, with less impact from seasonal citygate price hikes (2.5-3.0 months impact in 1H vs. at most 1.5 months impact in 2H). Kunlun has a lower-than-peer dollar margins with Rmb0.54/cm for residential, Rmb0.41/cm for industrial and Rmb0.53/cm for commercial users,

Deutsche Bank AG/Hong Kong
Page 3
23 August 2017 Utilities Kunlun Energy

which makes it less vulnerable to potential dollar margin/return control by local govts.

LNG receiving terminal: volume/profit growth accelerates meaningfully

in 1H17, Kunlun's LNG terminal processing volume surged by 90% yoy to 3.6bcm, accelerating from 22% yoy growth in 2016. We believe the strong volume growth is driven by China's increasing gap of domestic production and demand growth, as well as the execution of long-term import contract signed by PetroChina in past few years.

In the long run, Kunlun’s LNG terminals are also beneficiaries of the execution of third party access as it is positive for utilization.

E&P segment turned profitable due to higher oil prices

In 1H17, Kunlun's E&P segment turned profitable with a Rmb161mn net profit (vs. Rmb188mn net loss in 1H16) mainly due to recovery in oil prices (Brent +30% yoy to USD53/b). Production dropped by 22% yoy to 6.4mnbbl due to the termination of Xinjiang contract in 2016

LNG processing segment: still marking losses but recovery ahead

In 1H17, Kunlun's LNG plant processing volume increased by 184% to 0.5bcm and the segment EBITDA is still negative at Rmb0.14/cm, partially due to the increasing per unit opex incurred by the 7 new LNG plants commencing operations in 1H17.

We expect the margins of LNG plants to improve gradually, with increasing LNG demand and more disciplined capacity expansion:

LNG demand should be boosted by 1) improving LNG vehicle station utilization with more vehicle willing to covert to LNG due to improved gas price competitiveness, 2) more peak shaving in demand from city-gas projects after coal-to-gas conversion, and 3) increasing LNG direct delivery demand from industrial users.

Besides demand growth, we have witnessed a much slower capacity expansion (only 8% yoy) in 1H17, this compares to the 24%/23% yoy growth in 2015/16, which should also be helpful for the structural recovery of LNG sector.

Financial costs rose by 147% yoy in 1H17 but the impact should mitigate in 2H

In 1H17, financial costs rose strongly by 147% yoy and 26% hoh to Rmb481mn, due to the increase in total debt related to the Kunlun Gas acquisition and the commencement of new LNG plants that released the once-capitalized interest expense. We expect the negative impacts from higher financial cost to mitigate in 2H given high-base in 2H16 and potential debt repayment by Kunlun.

Page 4
Deutsche Bank AG/Hong Kong
23 August 2017 Utilities Kunlun Energy

Figure 1: 1H17 operational data summary

  • yoy
  • yoy

Key operating statistics

Upstream E&P business:

1H16

  • Sales vol. (mil. bbl)
  • 16.8
  • 15.2

34.7

  • -9%
  • 8.4
  • 8.3
  • 8.1
  • 7.1
  • 6.4
  • -22%

  • 56%
  • Realized oil price (US$/bbl)
  • 43.0
  • -19%
  • 47.0
  • 39.0
  • 29.3
  • 40.9
  • 45.6

Mid-/downstream gas vol (mn cm): NG (ex. LNG processing) LNG processing
22,280
679
23,233
522
4%
-23% 22%
5%
11,059
246
11,221
433
11,533
178
11,700
344
12,878
506
12%
184%
90%

  • LNG terminal re-gasification
  • 3,968
  • 4,859
  • 2,217
  • 1,751
  • 1,908
  • 2,951

18,164
3,630

  • Pipeline transmission
  • 33,978
  • 35,731
  • 16,634
  • 17,344
  • 17,567
  • 20,160
  • 15%

EBITDA dollar margin (Rmb/cm):

  • Natural gas
  • 0.21

(0.28) 0.23
0.19 0.12 0.24 0.27
0.25 (0.60) 0.25
0.20 (0.05) 0.24
0.18 (0.14) 0.27
(0.03) 0.39
0.17 (0.09) 0.21
0.17 0.20 0.24 0.26
(0.03) (0.09) 0.03
LNG processing LNG terminal re-gasification Pipeline transmission EBIT dollar margin (Rmb/cm): Natural gas
0.01

  • 0.28
  • (0.00)
  • 0.28
  • 0.27
  • 0.28
  • 0.27
  • (0.01)

0.10 (0.60) 0.09
0.09 (0.56) 0.12
(0.01) 0.04
0.15 (1.00) 0.12
0.06 (0.37) 0.05
0.11 (0.92) 0.09
0.08 (0.37) 0.14
0.09 (0.56) 0.19
(0.02)

  • 0.37
  • LNG processing

LNG terminal re-gasification Pipeline transmission

  • 0.03
  • 0.09

  • 0.23
  • 0.22
  • (0.00)
  • 0.23
  • 0.22
  • 0.23
  • 0.22
  • 0.22
  • (0.01)

Source: Company data *note: EBITDA/EBIT margin excludes impairments

Deutsche Bank AG/Hong Kong
Page 5
23 August 2017 Utilities Kunlun Energy

Figure 2: 1H17 P&L by-segment summary

  • yoy
  • yoy

  • Summary P&L (Rmb mn)
  • 1H16

33,659
493

  • Revenue
  • 77,839

561
69,027
668
-11% 19% -15%
-1%
39,467
492
38,372
68
35,368
175
40,078
563
Other gain/(loss)
14%

22%
3%
Purchases, services & others Employee compensation SG&A
(56,304)
(3,829) (3,087)
(563)
(47,783)
(3,777) (2,865)
(502)
(28,390)
(1,880) (1,339)
(266)
-
(27,914)
(1,949) (1,749)
(297)
(23,148)
(1,783) (1,182)
(260)
(24,635)
(1,994) (1,683)
(242)
(28,271)
(1,839) (1,664)
(215) (100)
8,552 (2,665) 5,887
22

  • -7%
  • 41%

  • -17%
  • Tax other than income taxes

Impariment
-11% 179% -18%
-1%
(1,393) 13,223 (5,406) 7,817 (1,599) 2,326
(407)
(3,879) 10,887 (5,366) 5,522
(513)
(1,393) 5,139 (2,485) 2,654 (1,361)
681

  • -
  • (3,879)

  • 3,108
  • EBITDA
  • 8,084

(2,920) 5,164
(238)
1,645
(245) 277
7,779 (2,725) 5,054
(267)
Depreciation and amortisation Profit from operation
E&P business

  • (2,641)
  • -2%

-29% -68%
-5%
(246) 914
-108%
-34% 69%
Natural gas sales LNG processing
2,203 (4,175)
603
1,289
(166)
851
925%
63%
4%

  • (162)
  • (4,009)

424
(281)

  • 674
  • LNG terminal
  • 371
  • 94
  • 179
  • 277%

  • 10%
  • Natural gas pipeline
  • 7,654

(528)
7,984
(580)
3,763
(39)
3,891
(488)
4,075
(56)
3,909
(524)
4,465

  • 156
  • Others
  • 10%

-9%
-379%
-40%
Interest income

  • Finance costs
  • (544)
  • (577)
  • (235)
  • (308)
  • (195)
  • (382)
  • (481)

Share of profits from JCs Share of profits from associates Profit before tax
E&P business
196
(1,687) 6,104 (3,134) 2,519
(701)
161 599
-18%
-135%
-2%
98 (62)

  • 97
  • 73

185

  • 88
  • 112

402
53%

  • (1,625)
  • 414
  • 117%

5,998
12
5,124
(127)
1,701
(388) 246
5,325
(151)
1,595
(286) 180
6,045

  • 416
  • -100%

8%
(3,007)
819
163
1,135 (4,200)
413
-375%
-35% 40%
Natural gas sales LNG processing
2,730 (4,486)
593
1,029
(400) 672
540%
82%
5%
(313)

  • 81
  • LNG terminal
  • 326
  • 273%

  • 10%
  • Natural gas pipeline

Others
7,579
(485)
7,976
(826)
(3,120) 2,878 (2,322)
3,705
(12)
3,874
(473)
(1,288)
(307) (713)
(1,020) (2,242)
18
4,062
(75)
3,914
(751)
(1,746) (1,073)
(780)
(1,853)
8
4,452
(124)
(1,878) 4,167 (1,748) 2,419
161
70% 16% -16%
5%
65%

  • Tax
  • (2,687)

3,418 (2,213) 1,205 (2,348)
625
(1,399) 3,725 (1,501) 2,224
(106) 608
(1,374) 3,951 (1,542) 2,409
(188) 833
37%
Profit after tax

  • Minority interest
  • 13%

  • Net profit
  • -54%

-92%
-439%
65% 10%
100%

  • E&P business
  • (180)

(2,120)
287
-186%
-78% 233%
9%
NG sales (incl. LNG processing) LNG terminal
(2,953)
193
180

  • 175
  • 115
  • 59
  • 94
  • 313

Natural gas pipeline Others
3,256
(503)
3,573 (1,005)
1,611
(3)
1,645
(500)
1,755
(85)
1,818
(920)
1,913

  • (148)
  • 74%

Adding back one-off items: Attributable impairment Attributable Fx loss of Actobe project Recurring Net profit
1,393 1,520 4,118
3,147
0
126% -100%
-10%
00
1,393 1,520 1,893
00
3,147
0
325
0

  • 3,702
  • 2,224
  • 2,409
  • 1,293
  • 2,744

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    in Action Environmental, Social and Governance Report CONTENTS ABOUT THIS REPORT 2 ABOUT KUNLUN ENERGY 4 Company profile 4 Corporate culture 5 Honors in 2020 6 Business development plans 7 MESSAGE FROM CHAIRMAN 8 FEATURED TOPIC: JOIN HANDS TO FIGHT THE EPIDEMIC 10 Strict deployment to ensure supply 11 Strict control of epidemic to resume work and production 13 Timely contribution to support the society 16 1. STRICT MANAGEMENT BUILDS THE CORNERSTONE OF RESPONSIBILITY 17 1.1 Sustainable development governance 18 1.2 Communication with stakeholders 20 1.3 Materiality assessment 23 1.4 Compliance management 26 1.5 Risk management 30 2. RESPONSIBLE OPERATION DRIVES SUSTAINABLE DEVELOPMENT 31 2.1 Management of safety 32 2.2 Quality management 37 2.3 Supply chain management 39 2.4 Customer services 40 2.5 Technology innovation 41 3. PEOPLE-ORIENTED BASIS CREATES A SATISFACTORY WORKPLACE 44 3.1 Employment and rights protection 45 3.2 Occupational health 47 3.3 Talent development 49 3.4 Care for employees 51 4. ENVIRONMENTAL FRIENDLINESS AND PROTECTING THE ENVIRONMENT 52 4.1 Environmental management 53 4.2 Tackling climate change 55 4.3 Emission management 58 4.4 Resource use 62 5. CONTRIBUTION TO SOCIETY AND SHARING A GOOD LIFE 66 5.1 Poverty alleviation 67 5.2 Community public welfare 68 APPENDIX 71 Responsibility performance table 71 Index of the environmental, social and governance reporting guide issued by the Hong Kong Stock Exchange 78 KUNLUN ENERGY COMPANY LIMITED 2020 Environmental, Social and Governance Report 1 ABOUT THIS REPORT • PURPOSE OF THE REPORT This report is the “Environmental, Social and Governance Report” (referred to as “this Report” or “Report”) issued by Kunlun Energy Company Limited (referred to as “Kunlun Energy” or “the Company”).
  • Refinitiv China IB Review

    Refinitiv China IB Review

    China Investment Banking Review Full Year 2020 中国投资银行业报告 2020年度 Refinitiv Deals Intelligence 路孚特 交易商情 1 报告 概览 投资银行费用 中国投行业务费用在2020年达201亿美元，相比去年全年增长了36.1%，这是自2000年有记录以来年度最高值。债券市场承销费占全部投资银行费用的53.2%，达107 亿美元，以17.3%的涨幅打破去年同期创造的记录。股权资本市场承销费也再创新高，实现今年最大增长，承销费较去年同期增长102.4%，总额达71亿美元。 已完 成的并购交易咨询费较去年同期增长23.0%，达12亿美元。银团贷款费用总额为11亿美元，比去年同期下降6.9%。中信以15亿美元的预估费用位居中国投行费用榜 首，占费用总额的7.4%。 兼并与收购 在中国境内并购交易活动的推动下，涉及中国的并购交易在2020年达到近三年高位，交易总额达5,813亿美元，同比增长30.1%。因为受监管、地缘政治紧张局势、 保护主义情绪和到最近的全球冠状病毒大流行的影响，已公布交易的数量同比减少1.1%。2020年第四季度交易总额达1,676亿美元，较上一季度减少26.4%，但相比 2019年第四季度增长17.3%。 中国海外并购自2016年历史新高以后第四年连续下滑，交易金额总计371亿美元，同比减少15.1%，为2007年301亿美元以来的最低水平。中国在全球跨境活动最活 跃的收购国中排名下滑至第八位。中国今年在“一带一路”沿线国家的并购交易共计113笔，价值83亿美元，同比减少33.7%，占中国海外并购总额的22.3%。外国公司 收购中国企业达448亿美元，比2019年增长4.3%。然而，交易数量比一年前下降了12.0%，达十多年来最低水平。境内并购活动达到近五年高点，总计4,785亿美元， 同比增长38.8%，交易数量增长2.9%。 涉及中国的并购交易活动主要集中在能源与电力行业，占市场份额的20.8%，总额为1,206亿美元，同比增长182.0%。国家石油天然气管网集团有限公司（国家管 网）同意以491亿美元现金收购中国石油天然气股份有限公司的管道资产。该交易目前是亚太地区有史以来规模最大的一笔交易，超过了此前的纪录保持者——长江 实业在2015年以454亿美元收购和记黄埔交易。它还超过了中国历史上最大的并购交易——2016年440亿美元的中国化工收购先正达交易。同时，随着中国整合油气 管道，国家管网还从中石化收购了管道资产，共计4笔交易，总额达256亿美元。这使得国家管网收购中石油和中石化的油气管道资产合计达到 748 亿美元。在2020 年12月，国家管网还同意从昆仑能源有限公司收购中石油大连液化天然气有限公司75%的股权和中石油北京天然气管道有限公司60%的股权，总金额为62亿美元。高 科技行业以16.8%的市场份额位居第二，总额达974亿美元，同比增长83.8%。 中国国际金融股份有限公司在2020年已公布并购交易榜单中排名第一，市场份额为26.5%，相关交易金额达1,539亿美元。 2 报告 概览 股权资本市场 中国股权及股权挂钩交易总额创下历史新高，2020年融资达2,816亿美元，同比增长90.4%。发行数量为最活跃的一年，同比增长73.0%。首次公开发行（IPO）总额创历史新高， 达1,254亿美元，同比增长86.1%。IPO数量创下历史新高，同比增长66.3%。 A股IPO在2020年达到近十年高点，总募集金额达593亿美元，同比增长78.7%，A股新股上市数量增长96.0%。除二次上市发行，京沪高速铁路今年1月通过IPO融资44亿美元，成为 今年迄今为止全球规模最大的IPO。上海证券交易所2019年7月推出的科创板，占A股IPO募集金额的44.2%，总额达262亿美元，同比增长140.8%。
  • Reform Is in the Pipelines: Pipechina and the Restructuring of China's

    Reform Is in the Pipelines: Pipechina and the Restructuring of China's

    REFORM IS IN THE PIPELINES: PIPECHINA AND THE RESTRUCTURING OF CHINA’S NATURAL GAS MARKET BY ERICA DOWNS AND SHENG YAN SEPTEMBER 2020 Key Takeaways Beijing launched the most ambitious reform of China’s oil and natural gas industry in more than two decades with the establishment of the China Oil & Gas Piping Network Corporation (PipeChina) last December. The company is being developed from midstream assets— pipelines, liquified natural gas (LNG) import terminals, and storage facilities—and personnel transferred from China’s national oil companies (NOCs). Beijing expects that its goals of increasing China’s domestic and imported natural gas supplies and consumption will be more effectively advanced by having China’s midstream infrastructure owned and operated by a single company that provides fair and open access to its pipelines, LNG import terminals, and storage facilities instead of by three NOCs reluctant to grant third-party access to infrastructure. The specific objectives Beijing intends for PipeChina to further include: ● Growing China’s natural gas output by expanding the number of companies involved in the upstream (exploration and production) ● Reducing natural gas prices and increasing natural gas use by creating a more competitive downstream (processing, sales and distribution) ● Developing a unified national pipeline network to more efficiently distribute natural gas around the country If PipeChina delivers these outcomes—which depends, in part, on the enforcement of third- party access rules—there is likely to be an increasing number of new participants in China’s natural gas markets, especially LNG importers, which in turn should create new opportunities for LNG exporters. Introduction On December 9, 2019, Beijing legally established a new player in China’s oil and natural gas industry, the China Oil & Gas Piping Network Corporation (PipeChina).
  • Iran Divestment Report

    Iran Divestment Report

    FINAL DIVESTMENT AND DO-NOT-CONTRACT LIST—IRAN Compiled as of August 30, 2020 Pursuant to N.C. Gen. Stat. § 147-86.58, the State Treasurer has determined that the following companies appear to be engaged in “investment activities in Iran,” as that term is defined in the amended North Carolina Iran Divestment Act of 2015 (the “Act”), based on other state lists of restricted companies, federal information, and other credible information. This updated List may be found at the State Treasurer’s website: https://www.nctreasurer.com. The State Treasurer and North Carolina Retirement Systems may not invest funds, and must divest any existing investment, with the restricted companies listed below. N.C. Gen. Stat. § 147-86.58. In addition, the restricted companies listed below are generally ineligible to contract with the State of North Carolina or any political subdivision of the State if the contract is valued at more than $1,000.00. N.C. Gen. Stat. §§ 147-86.60 and 147-86.61(a). Any existing contracts with companies listed below shall be allowed to expire in accordance with the terms of the contract. N.C. Gen. Stat. § 147-86.60(c). “Company” is defined by the Act to include not only restricted companies listed as a result of their own apparent investment activities in Iran (see above) but also any “wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities.” N.C. Gen. Stat. § 147-86.57(1). The Department of State Treasurer is not responsible for compliance with the Act by other agencies or State political subdivisions.
  • Ga-Sudan092613-Pdf83154af4.Pdf

    Ga-Sudan092613-Pdf83154af4.Pdf

    Board of Regents, State of Iowa Public Fund SUDAN Divestment Report A. Total Universe of Companies Per Conflict Resolution Network (formerly Sudan Divestment Task Force) B. Summary of all written notices sent C. Total Positions Divested D. Holdings As of: June 30, 2013 H:\BF\Legislative\2013 Session\responses\SUDANGeneral Assembly Report 10-1-13.xlsHEADER A. Total Universe of SUDAN Scrutinized Companies As of June 30, 2013 COMPANY CATEGORY Alstom Scrutinized Alstom India Ltd Scrutinized Areva T&D India Ltd Scrutinized Wuhan Boiler Company Scrutinized Higleig Petroleum Services and Investment Co. Ltd Scrutinized Atlas Copco AB Scrutinized AviChina Industry & Technology Company Ltd. Scrutinized Hafei Aviation Industry Co Scrutinized Harbin Dongan Auto Engine Co. Scrutinized Caterpillar Inc. Scrutinized Caterpillar Credito, S.A. de C.V. SOFOM E.N.R. Scrutinized Caterpillar Finance Corp Scrutinized Caterpillar Financial Australia Ltd Scrutinized Caterpillar Financial Services Corp Scrutinized Caterpillar International Finance Ltd Scrutinized Caterpillar Used Equipment Services International SARL Scrutinized F.G. Wilson Engineering Ltd Scrutinized Perkins Engineers Co. Ltd Scrutinized China Gezhouba Group Company Scrutinized China Hydraulic & Hydroelectric Construction Group (Sinohydro) Scrutinized Sichuan Power Development Co. Ltd. Scrutinized Sinohydro Group Ltd Scrutinized Sinohydro Bureau 7 Co Ltd Scrutinized China National Petroleum Corp (CNPC) Scrutinized China National United Oil Corp Scrutinized China Petroleum Engineering & Construction Corp Scrutinized CNPC HK Overseas Capital Ltd Scrutinized CNPC General Capital Limited Scrutinized CNPC Golden Autumn Ltd. Scrutinized Daqing Huake Group Co. Ltd Scrutinized Jinan Diesel Engine Co. Ltd Scrutinized Kunlun Energy Co. Ltd Scrutinized PetroChina Co. Ltd Scrutinized China North Industries Group Corp (CNGC/NORINCO) Scrutinized AKM Industrial Co.
  • Experience in the Oil and Gas Industry “They Go to Great Lengths to Understand Your Industry, Business and Specific Objectives

    Experience in the Oil and Gas Industry “They Go to Great Lengths to Understand Your Industry, Business and Specific Objectives

    Experience in the Oil and Gas Industry “They go to great lengths to understand your industry, business and specific objectives . so the advice you get it is fit for purpose. It’s not cookie cutter, and as a client that is extremely valuable.” CLIENT QUOTED IN CHAMBERS UK 2014 NATURAL RESOURCES “Sullivan is our firm of choice – they are terrific, time after time. The work is of a very high quality, and they understand our commercial intentions as well as the legal issues.” CLIENT QUOTED IN CHAMBERS USA 2013 “The partners ‘are detail oriented, efficient and they think strategically’. ‘Their legal expertise is absolutely first rate but equally or more valuable is their general industry/business advice and suggestions on how to tackle issues.” LEGAL 500 LATIN AMERICA 2013 Oil and Gas &C has significant and varied experience advising clients in “Oil & Gas Legal Adviser of the Year” Sthe oil and gas sector. Our depth of understanding of the oil INFRASTRUCTURE JOURNAL 2011 and gas industry means our lawyers’ advice is always orientated towards the achievement of our clients’ business objectives. S&C’s standing in the industry is reflected in the number We provide tailored solutions informed by market knowledge. of major companies it has represented, both directly and in Our multi-disciplinary approach ensures that clients benefit consortia, including: from our industry experience in each of our core practice areas. AEC (Alberta Energy) INPEX Corporation American Energy Kerr-McGee Partners, LP Nigeria LNG Limited OUR OIL AND GAS Upstream BG Group plc INDUSTRIES Nippon Oil Pipelines BHP Billiton Petroleum Oleoducto Central S.A.
  • Strategy Report Hong Kong Equity Research

    Strategy Report Hong Kong Equity Research

    Thursday, 3 December, 2020 China Merchants Securities (HK) Co., Ltd. Strategy Report Hong Kong Equity Research 2021 Outlook: Road towards restoration Jessie Guo, PhD +852 3189 6121 [email protected] “Lives of great men all remind us, we can make our lives sublime. Let Edith Qian, CFA +852 3189 6752 us, then, be up and doing. With a heart for any fate, still achieving, still [email protected] pursuing; learn to labour and to wait”. Harrington Zhang, PhD - Henry Wadsworth Longfellow, A Psalm of Life +852 3189 6751 [email protected] Tommy Wong View on economic recovery +852 3189 6634 [email protected] The outbreak of COVID-19 sent global economic growth deep into negative Johnny Wong territory in 2020. Synchronised large-scale fiscal and monetary policies +852 3189 6357 prevented major economies from sliding into perennial recession. [email protected] According to the IMF, global GDP will contract by 4.4% in 2020 and rebound Yonghuo Liang +86 755 8290 4571 by 5.2% in 2021, but the pace of recovery will be uneven across countries. [email protected] We expect the US economy to have a relatively muted start next year, and Kevin Chen then followed by a brighter second half, while the Fed’s monetary policy will +852 3189 6125 remain abundantly accommodative throughout the entire 2021. [email protected] Felix Luo, PhD +852 3189 6288 We stay positive on China’s economic outlook, mainly driven by domestic [email protected] consumption and manufacturing investment. We expect a rather neutral Yiding Jiao, CFA fiscal and monetary policy stance.