PetroChina's shares tripled in value on trading debut in Shanghai. It surged past Exxon Mobil to become the world's most highly valued company by market capitalization. But is this a true value?
If we applied the share price of PetroChina Co. on the Shanghai Stock Exchange to the whole of the company, China's major oil and gas producer would have a market cap of around $1.08 trillion, making it the world's biggest company. But only a mere 2.2% of its share capital is sold in the Chinese IPO and about 86% of its shares are still held by the state-owned parent.
Since very few shares are publicly traded spread -- scarcity that can drive up prices. If we were to value the company by tradeable shares the total value of PetroChina's publicly traded shares would be about $72.5 billion. In addition, PetroChina's Class A shares in China are trading at around 50 times this year's forecast earnings, compared with 20 times earnings for its Hong Kong-listed stock. Big oil companies average of 10 times forecast earnings internationally.
As I have said before, Exxon has higher reserves than PetroChina. Enough said.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment