Overview Key strengths Key risks Dominant position in China's offshore exploration and production (E&P) segment. Exposure to the cyclical oil and gas industry. Satisfactory reserve life and good prospect of production growth. Global energy transition trend increases long-term substitution and growth risks for the oil and gas industry. Leverage to remain low despite rising capital expenditure (capex). Extremely high likelihood of extraordinary support from China's central government. . Their profitability will recover in 2021-2022, underpinned by a strong recovery in oil prices on higher energy demand amid economies reopening after the pandemic disruption in 2020. We assume Brent crude oil to average US$75 per barrel for the rest of 2021 and drop moderately to US$65 per barrel in 2022, compared
