Citigroup Downgrades PetroChina to 'Sell'

Shares of PetroChina Co. Ltd. (PTR) have declined roughly 44% so far in 2008.This was after an initial surge of more than 150% that followed its November 5, 2007 debut on the Shanghai Stock Exchange and a move to top spot among the world’s companies in terms of market value. This drop is partially due to 2007 profits that rose less than anticipated.

The creation of the People’s Republic of China, which was once worth $1-trillion, has been hurt by climbing prices for rigs and other equipment, as well as government price controls.

While rising oil prices are expected to produce higher earnings for PetroChina’s exploration and production division, Citigroup analyst Graham Cunningham expects this will be more than offset by higher losses in its refining business.

He expects the company’s first quarter earnings for 2008 will disappoint the market as a result, and has downgraded PetroChina to “sell” from “hold.”

Citigroup’s forecasts are based on an average price for Brent crude oil of $96 per barrel and $88 for fiscal 2008 and 2009, respectively.

Comments

[Augustus]

I could not understand the fascination with this company. It was / is a certainty that the Chinese govt. will beat the profits out of this business. The seeming profits from development and production are given up when the refined product is sold at subsidized losses. Supposedly the govt. will then confer upon the company some slug of cash as an offset to those refing losses. Does anyone really believe that there will be much consideration of makret prices in giving these cash grants after the fact?

[James V]

SCAM - SCAM - SCAM.

This is a typical pump and drop scam.
Pump up the price, IPO it to the market, lockups expire. Boom, huge sellers with connections sell the stock.

Why do you think our friend Mr Buffet got out.
1 Trillion dollar company!! Controlled by Chinese Government.
Its so funny how dumb investors are. Oh yeah, China will be liberalising Oil market so it has potential. More rubbish...

It cost me less to get cabs in China, than what it would cost me to buy the equivelent petrol from petrol station in USA.

Augustus you are very right:
The government is using investors money and Petrochina as an Organ to control Inflation.

How investors honestly think that the Oil this company finds is going to be sold to highest bidder at good price is beyond me. The oil is going to be sold at bottom-rock prices to China. Which is what you'd expect from a STATE COMPANY. Sorry a STATE COMPANY that investors can buy shares in.

[denissuslov]

Yeah, James V, Waffent Buffet is smart again...

[chinesepetti]

petrolchina is not making you money: but it"s a bit illogical for citi where is run by all white collar thiefs to give it a downgrade: go downgrade yourself first my dear citi bank!!!

[sb-tiger]

China is communist Govt. controlled capitalism. Despite IPOs etc- the Govt. owns huge majority of shares in almost all the big companies. So the Govt. gains by these IPOs – it generates money for them. I don’t know what the lockup rules etc are there for these IPOs – so someone likely could be making a lot of money. The market lacks transparency, in addition to all the complications and confusion due to all the classes of shares ‘A’, ‘H’, ‘B’, red-chips,…
Yes it could be Govt. controlled scam. I have lost some money in China, I am totally wary of the market.

[chinesepetti]

All Mr Petti's pupils and seeking alpha readers here; the story about Mr Petti just does not add up! According to Mr Petti's views (you can read all his articles about China on this site ; strangely he only wrote about China), everything in China is in crisis even the air is filthy so why he is making a living there; getting paid from the red Communist school; why not go back to Wall street to work for Bear Stern ? Bear Stern is not dead yet.

It is time for Mr Petti and his loyal pupils to disclose his relationship with the red Chinese government now!!! And all readers on this site should also make such a demand; otherwise it's an insult to the intelligence of all seekingalpha readers!

[chinesepetti]

do not get near to Chinese Buble; instead buy more citi bank and it actually rallied last night.