China Oil Giant Is Worth Less Than Its Reserves Under Ground - Bloomberg

China Oil Giant Is Worth Less Than Its Reserves Under Ground - Bloomberg:

PetroChina Co. looks cheap on many levels, perhaps none more so than comparing it to the value of its reserves beneath the Earth’s surface.

By plotting its enterprise value against reserves, China’s state-run oil and gas champion is the cheapest among global energy firms tracked by Sanford C. Bernstein & Co. Its shares have sunk 13% in Hong Kong this year to trade almost at the lowest since 2005. That’s despite a 19% gain in crude prices.

“With PetroChina’s current assets and asset quality, even with modest valuation methods, the H-share price should be easily doubled from current levels,” Jefferies Group LLC analyst Laban Yu said by phone. “There is no valuation method that can validate the current share price.”