The day after its stock was made available for trading on the exchange in Shanghai, the price nearly tripled, raising the company's valuation to $1 Trillion dollars and making the Chinese energy giant the world's most valuable company. Even though PetroChina has only a quarter of the revenue claimed by Exxon-Mobil (the largest US company, valued at a sneeze-worthy $488 Billion dollars), it is now valued higher than the entire Russian stock market; PetroChina is worth more that Exxon-Mobil and General Electric combined.
However, PetroChina's stock fell more than 8% on Hong Kong's index, and some speculators are classifying this huge valuation (55 times earnings, to be precise) as a stock market bubble; Warren Buffett said two weeks ago that Chinese share prices have risen too fast. Analyst Larry Grace, with Kim Eng Securities Co. in Hong Kong, had this to say:
"Production is static with limited upside for the next three to four years... As for the downstream, the price controls and overall regulatory trend limit the company's earnings."
Image depicts a PetroChina Filling Station; click to enlarge.
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