Morningstar has increased its fair value estimate for PETROCHINA (00857), which it does not assign an economic moat rating to, by 8.4% from HK$9.5 to HK$10.3. The firm also raised its fair value projection for the company's A-shares (601857). PETROCHINA's net profit for 2025 is projected to decrease by 4% year-on-year. This is attributed to an estimated 14% decline in average realized oil prices, partially offset by a 2% increase in oil and gas production and improved performance in its downstream and natural gas segments. The company's overall results exceeded expectations. Notably, PETROCHINA's marketing segment profit grew by 6%, whereas Sinopec's (00386) marketing profit fell 47% over the same period. Furthermore, although the chemical division's earnings declined by 19%, it still performed better than the persistently loss-making chemical operations of Sinopec. Despite ongoing conflicts in the Middle East, PETROCHINA appears well-prepared to handle potential supply disruptions, thanks to its robust pipeline assets and diversified supply sources. Management indicated that energy imports passing through the Strait of Hormuz account for only about 10% of its operational requirements. The natural gas marketing business was a standout performer, with operating profit rising 13% due to sales growth and optimized procurement. With enhancements in natural gas storage capacity, PETROCHINA is expected to sustain strong profit growth in this segment, as it can reduce reliance on expensive spot purchases and stabilize costs.