PetroChina Sinopec's share price rose sharply Recently, China Petroleum and Sinopec A shares rose sharply, rising 21% and 15% respectively from December 4 to 5, and we believe that the short-term oil price is down, the company's fundamentals have no essential changes. The stock price increase is mainly caused by:

 

Low-priced stocks (low PB, this year's absolute stock price increase is less) and the majority of the funds to promote.

 

Trading level: Petrochemical's ability to incite stock index or noteworthy If we look at the strategy of stock index futures gains from the perspective of stock index futures traders, we believe PetroChina has strong ability to incite stock indexes: 1) In the first 11 months of this year, the increase was small, and long-term retail investors had more holdings, and active institutional investors held fewer shares. When the stock price rose sharply, there was less selling; 2) the same funds had a greater impact on the stock price of PetroChina. Big. Looking at the average daily trading volume/stock weight of the Shanghai and Shenzhen 300 heavyweights in November, PetroChina’s leverage ratio is ranked 11th; 3) PetroChina is the company with the largest weight in the Shanghai Composite Index, but the freely tradable shares/total share capital, Therefore, with the smallest funds, the biggest increase in the Shanghai Composite Index can be obtained, thus driving market sentiment. On the other hand, when buying the stocks of the CSI 300 or the Shanghai Composite Index in accordance with the amount of equal funds, the pull of the stock price of PetroChina is also the most obvious.

 

Sinopec and PetroChina's share price linkage weakened Sinopec's share price rose less than PetroChina. We believe that the reasons are: 1) Sinopec's fundamentals are slightly better than PetroChina, so it is not fundamental factors that drive stock prices up; 2) arbitrage due to convertible bonds It is possible to increase the supply of stocks in a large amount in the short term, so it is difficult to use the funds to shake the stock price.

 

Valuation: PE valuation is not cheap We believe that the petrochemical company's low PB is due to the decline in ROE. PetroChina and Sinopec's 15-year PE are 19 and 15x respectively, and the 15-year performance may decline. The shareholders of PetroChina are mainly retail investors. The arbitrage of A-H through Shanghai-Hong Kong Stock Connect is less likely, and the active transaction is not active. It may take longer to achieve a homogeneous return of value.