2022 Petroleum Industry Research Report

Source: Asset Information Network, Qianji Investment Banking, iFinD (1) PetroChina [601857.SH]: PetroChina Company Limited was established on November 5, 1999. It is China’s largest and dominant integrated oil and gas producer and marketer, one of China’s largest revenue-generating companies, and among the world’s largest petroleum companies. The company aims to become a globally competitive international energy enterprise and a leading global producer and marketer of petroleum and petrochemical products. PetroChina engages broadly in oil- and gas-related businesses, including: exploration, development, production, and sale of crude oil and natural gas; refining, transportation, storage, and sale of crude oil and petroleum products; production and sale of basic petrochemicals, derivative chemical products, and other chemical products; and transportation and sale of natural gas, crude oil, and refined petroleum products. (2) Sinopec [600028.SH]: Sinopec Corporation’s core businesses cover oil & gas and the chemical industry. Its oil & gas operations include exploration, development, and production of crude oil and natural gas; pipeline transportation of crude oil and natural gas; refining of crude oil into petroleum products; and marketing of crude oil, natural gas, and refined petroleum products. Its chemical business encompasses manufacturing and marketing of a broad range of industrial chemical products. Sinopec is one of China’s largest oil & gas producers; ranks first in refining capacity nationwide; maintains a comprehensive retail network for refined petroleum products across China and is China’s largest supplier of such products; and holds the top position in ethylene production capacity in China, with a relatively complete marketing network for chemical products. (3) Rongsheng Petrochemical [002493.SZ]: Rongsheng Petrochemical Co., Ltd. primarily engages in research, development, production, and sales of various petrochemical and chemical fiber products. Its product portfolio includes over thirty items, such as olefins and their downstream derivatives, aromatics and their downstream derivatives, gasoline, diesel, jet fuel, purified terephthalic acid (PTA), polyethylene terephthalate (PET) chips, PET bottle-grade resin, polyester pre-oriented yarn (POY), polyester fully drawn yarn (FDY), and polyester textured yarn (DTY). The company ranks among the leading enterprises in China’s integrated petrochemical and chemical fiber industries. 3.6 Key Global Competitors Major non-Chinese global competitors include EOG Energy [EOG.N], Hess Corporation [HES.N], ConocoPhillips [COP.N], Phillips 66 [PSX.N], Gulfport Energy [GPOR.N], Marathon Petroleum [MPC.N], ExxonMobil [XOM.N], Rex American Resources [REX.N], Southwest Gas Holdings [SWX.N], and Laredo Petroleum [LPI.N]. Figure: Major U.S.-Listed Companies Source: Asset Information Network, Qianji Investment Banking, iFinD (1) ExxonMobil [XOM.N]: ExxonMobil Corporation was founded in New Jersey in 1882. Its divisions and affiliates operate or sell products in the United States and most other countries worldwide. Its core businesses involve exploration and production of crude oil and natural gas, as well as manufacturing, trading, transportation, and sale of crude oil, natural gas, petroleum products, petrochemicals, and various specialty products.

What, exactly, are resource stocks trading on?

Layer 4 | Narrative / Style Layer — Determines valuation premiums and is easiest to disguise. • The five dominant narratives driving resource stocks are: AI computing power, new energy, Kondratiev depression, China-specific valuation premium (“Zhongtegu”), and geopolitical risk hedging. • The most insidious aspect of resource-stock narratives is that they masquerade as “fundamentals.” For instance, the electricity-sector narrative—“the endgame of computing power is electricity”—was later debunked (electricity accounts for only ~12% of computing-power costs); yet AI/new-energy demand for resources is genuine—data centers truly consume copper, and photovoltaic/wind power genuinely consumes rare earth elements. This makes it harder for retail investors to distinguish whether price rises reflect real demand—or valuation bubbles. The sharpest insight: Resource stocks are priced far more by “commodity prices” than by “company fundamentals.” The case of Zijin Mining provides irrefutable evidence: • In H1 2026, its profits surged +68% (excellent fundamentals), yet its share price retreated over 30% from its peak (driven by commodity-price volatility and position turnover). • This demonstrates that even when corporate earnings are strong, stock prices are predominantly determined by Layer 1 (global commodity prices) and Layer 3 (positioning/liquidity dynamics)—not earnings alone. The root cause of retail investor losses lies precisely in buying based on Layers 2 & 4 (fundamentals/narrative) while failing to recognize that Layer 1 (global commodity prices) is the “mother function,” and Layer 3 (positioning) amplifies volatility. Investors may thoroughly research a mining company’s ore reserves—but neglect London copper/gold futures overnight sessions and the Federal Reserve’s policy signals. VI. Practical Guidance: Four Questions to Ask Before Buying Resource Stocks Use this self-checklist: 1. Can I monitor the “mother function”? If buying copper-related stocks, watch LME copper; if buying gold-related stocks, track COMEX gold prices and the U.S. dollar. Relying solely on A-share K-line charts without monitoring overnight markets is like racing blindfolded. 2. Am I buying a pure-mining company—or a processing firm? Pure miners (with owned mines) capture price elasticity; processors earn processing fees. When lithium prices surge tenfold, a processor without mine ownership may still post losses. This distinction is the most common pitfall in resource-stock investing. 3. Am I riding the trend—or catching a falling knife? Resource stocks exhibit extreme volatility (a 30% drawdown for Zijin is routine). “Bottom-fishing” and “knife-catching” often amount to the same thing. Position sizing matters more than stock selection. 4. Can I withstand “rising earnings but falling stock prices”? Zijin’s +68% profit growth accompanied by a share-price decline is typical—not anomalous—in resource stocks. Your holding rationale must anchor on commodity prices and a three-year horizon—not on the flawed assumption that “strong earnings should automatically drive price gains.” Three Rules to Avoid Pitfalls: • Resource stocks are not “Chinese companies”—they are “globally priced instruments.” Understanding LME copper/gold overnight markets and interpreting Fed communications matters far more than analyzing any single resource-stock chart. • Never hold cyclical stocks like growth stocks: once commodity prices reverse, downside profit elasticity is steeper than upside. • Distinguish clearly between “pure miners” and “processors”: the former captures price elasticity; the latter earns processing fees. Even a tenfold rise in lithium prices yields zero benefit to a processor lacking mine ownership. VII. Future Trends: Four Confidence-Weighted Judgments The following represent subjective projections—subject to error—and serve only as conceptual frameworks. Judgment 1: The ongoing restructuring of pricing logic will persist, lifting the long-term price center. Supply rigidity (e.g., copper’s 15-year development cycle, zero-growth rare-earth quotas, export controls) combined with nonlinear demand growth (AI + new energy) creates a triple-force upward pressure on long-term commodity price centers. The shift from “commodity attributes” toward “resource + financial attributes” is not short-term speculation—it reflects structural change.

REX American Resources Stock Appears Undervalued Following 217% Surge

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REX American Resources shares surged 217% over five years, appearing undervalued with a P/E ratio of 11.9x against the Oil and Gas industry average. Analysts recommend evaluating future growth and profitability to justify current valuations.

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