Yanchang Petroleum International Limited Overview
Yanchang Petroleum International is a Hong Kong-listed, Bermuda-incorporated subsidiary of Shaanxi Yanchang Petroleum (Group), the provincial state-owned energy group often called China's "fourth oil major". The company combines two businesses of very different size. The first is a small upstream producer in Western Canada: Novus Energy Inc., which produced about 1,485 boe/d of mostly light Viking oil in 2025 from Saskatchewan and Alberta. The second is a high-volume, very thin-margin refined-products wholesaler in China: Henan Yanchang Petroleum Sales, 70% owned, which sold 2.37 million tonnes in 2025. Revenue (HK$17.3 billion in FY2025) comes almost entirely (about 99%) from the trading arm, but asset value and earnings volatility come mainly from the Canadian oil assets. The group carries an auditor's going-concern material uncertainty. It depends on parent-company loans and supply. After a HK$782 million loss in FY2025 driven by impairments, it trades at roughly half of book value.
Company's own description
The company states that its principal activity is investment holding. Through subsidiaries, the group carries out supply and procurement of oil-related products in the PRC, and oil and gas exploration, exploitation, sale and operation in Canada and Madagascar [S2]. Its two reportable segments are [S1]:
Exploration, exploitation and operation: oil and gas exploration, exploitation, sale and operation.
Supply and procurement: storage, transportation, trading and distribution of oil-related products.
In earlier press materials, management described the company as principally engaged in (i) exploration, exploitation and operation of oil and gas and (ii) fuel oil trading and distribution. Upstream operations are in Saskatchewan and Alberta through wholly owned Novus Energy Inc. Downstream wholesale, retail, storage and transport of oil products are carried out through 70%-owned Henan Yanchang Petroleum Sales Co., Ltd., which holds PRC oil-product distribution licences [S11].
Business model and revenue model
| Dimension | Characterisation |
|---|---|
| Revenue model | 100% product sales, recognised at a point in time under HKFRS 15 [S1]. There is no subscription or licensing revenue. Minor "other revenue" (HK$6.3m in FY2025) comes from bank interest, rental income, storage fees and oil-card income [S1] |
| Product mix FY2025 | Trading and distribution of oil-related products HK$17,140.3m (98.9%); sales of crude oil and natural gas HK$186.2m (1.1%) [S1] |
| Value chain position | Upstream: small-cap E&P (light oil, associated gas). Midstream/downstream: refined-products wholesaling, rail, road and water logistics, oil depots and a small retail station network. There is no refining |
| Customer types | Trading: state oil majors (Sinopec branches in Northwest, Central and North China and Henan), CNPC and CNOOC units, Shell JV entities, state reserve bureaus, private gas stations, industrial and mining consumers, retail motorists [S1][S3]. Upstream: Canadian crude and gas purchasers/marketers (names not publicly disclosed) |
| End-markets | PRC transport fuels (gasoline, diesel), state strategic reserves, industrial fuel users; North American crude oil and natural gas |
| Customer concentration | Top 5 customers 78% of FY2025 sales; largest customer about 67% [S2]. "Customer A" contributed HK$11,593m (66.9% of revenue) in FY2025 [S1] |
| Supplier concentration | Top 5 suppliers 82% of FY2025 cost of revenue; largest about 35%. The controlling shareholder (Yanchang Petroleum Group) has beneficial interests in the largest supplier [S2] |
Independent characterisation
Economically, the group is a commodity-exposed E&P option attached to a captive marketing conduit. Henan Yanchang works largely as the parent group's distribution channel. Refined products are bought under a continuing connected supply agreement with Yanchang Petroleum Group (2025 annual cap RMB26.3 billion) and resold, often to other state majors, at spreads of tens of RMB per tonne [S2][S1]. That business produces large reported turnover but almost no profit: segment profit was HK$1.7m on HK$17.1bn of revenue in FY2025, a 0.01% margin [S1].
Value and risk sit in Novus. Its 2P reserves were 16.76 MMboe at end-2025 [S2]. It accounts for most non-current assets (HK$1,103m of HK$1,259m) [S1], and its impairment cycle drives group earnings: a reversal of HK$137.7m in FY2024 and an impairment of HK$548.9m in FY2025 [S1].
The group cannot fund itself independently. Liquidity depends on renewals of two US-dollar secured term loans from the parent (US$35m and US$22m) and on PRC bank lines [S1].
Strategy
Stated strategy (paraphrased themes, Annual Report 2025 outlook) [S2]
-
"Robust operation." Respond to market volatility while consolidating the core oil and gas business.
-
Upstream: deepen resource development; raise recovery and operating efficiency through technology and process optimisation; control operating costs.
-
Downstream: track markets, adjust sales strategies flexibly, improve the sales system, and strengthen the industry chain's ability to hedge risk.
-
Diversification: explore new business areas in an orderly way while keeping risk under control.
FY2024 themes were "quality improvement and dynamic optimisation in a stable manner", digital tools, and "consolidating fundamentals and fostering new growth drivers" [S3]. For H1 2026, Henan Yanchang's core objective was a "turnaround to profit" [S6].
Initiatives announced in the last 24 months
| Initiative | Entity | Status / metric | Source |
|---|---|---|---|
| Five-Year Development Plan study (economic models for 120kt–400kt/yr production under WTI US$65/70/75/80 scenarios; free cash flow models) | Novus | Study initiated in 2025 | [S1] |
| CO₂ sequestration feasibility (with university and research teams) | Novus | Discussions only | [S1] |
| AI in oilfield production management ("smart oilfield") | Novus | Exploratory | [S1] |
| Wapiti block disposal plan | Novus | Proposed in 2025; no transaction announced | [S1] |
| Low-cost production optimisation (hot-oil treatment, pump changes, wax cleaning) | Novus | +2,844 bbl in 2025; +1,188 boe in H1 2026 | [S1][S6] |
| Cost reduction | Novus | C$1.54m saved in 2025; field opex −15.7% and G&A −31.5% in H1 2026 | [S1][S6] |
| Restructuring of the Sinopec fixed-investment model | Henan Yanchang | Spread raised from RMB38/t to RMB93.58/t | [S1] |
| Entry into LNG (framework contract with Shaanxi LNG Investment and Development) | Henan Yanchang | Preparing for sales | [S1] |
| Organisational reform (competitive selection of 18 middle managers; 158 frontline placements; pay restructuring) | Henan Yanchang | Completed in 2025 | [S1] |
| Financing innovation (buyer-paid-interest bank acceptance bills, overdraft lines) | Henan Yanchang | Net current loans +RMB128.5m in 2025 | [S1] |
| Three-year Skills Master Studio plan; three-year Management Deepening plan (54 measures, 24 key tasks) | Henan Yanchang | Launched H1 2026 | [S27] |
| Internal control remediation after the misappropriation | Group | Third-party advisers engaged (Aug 2026) | [S7] |
Medium-term targets and guidance
No quantitative medium-term financial targets or guidance have been published. Novus's 5-year plan scenarios are analytical rather than committed targets [S1]. Management expects oil prices to remain highly volatile in 2026 [S2].
Products & Services
Exploration, exploitation and operation (Novus Energy Inc.)
| Product / asset | Description and specifications | Target customer | Latest data | Pricing model |
|---|---|---|---|---|
| Light crude oil (Viking formation) | Thin sandstone reservoirs about 3–4 m thick ("Viking" and "Success"), developed with 1-mile extended-reach horizontal wells, super-single rigs, geo-steering and closed-end sliding-sleeve fracturing [S3]. 2025 average net oil production 1,124 bbl/d [S2] | Canadian crude purchasers/marketers (not disclosed) | 2025 net sales 542k boe (oil and gas) [S1] | WTI-linked, less Canadian differentials; no hedging (no commodity contracts in FY2024–FY2025) [S1] |
| Natural gas (associated/solution gas) | 2025 average 2,165 Mcf/d [S2]. Gas sales are constrained by back-pressure on third-party systems (Campus, Five Point, Steel Reef) [S6] | Gas marketers | Gas realisations fell about 41% in 2024 [S3] | AECO-linked (inferred; not explicitly disclosed) |
| NGLs | Included with oil in reserves reporting (oil and NGL net proved 8,741.6 Mbbl at end-2025) [S2] | Marketers | — | Market-linked |
| Reserves base | 2P 16,764.9 Mboe at 31 Dec 2025 (proved 11,749.0; probable 5,015.9), evaluated by Sproule under NI 51-101/COGEH [S2] | — | 2025 negative revisions of 1,215 Mboe (2P) [S2] | — |
| Undeveloped land and drilling inventory | More than 80 drillable licences kept alive through extensions; 68 km² of 100 km² of expiring land preserved in 2024 (Court, Major, Milton blocks) [S3]. 8.5 Crown blocks (21.7 km²) won in Court in 2022 [S4] | — | Wapiti block disposal plan proposed in 2025 [S1] | — |
Named blocks and plays: Court (Viking), Major, Milton, Wembley, Wapiti, Madison group "Success" reservoir, Mannville group, Halfway group [S3][S1].
Supply and procurement (Henan Yanchang)
| Offering | Description | Target customer | Latest data | Pricing model |
|---|---|---|---|---|
| Strategic-channel wholesale | Sales of refined products to state majors' provincial branches | Sinopec Northwest, Central China, North China, Henan; CNPC Hubei; CNOOC Huadong | 2025: Sinopec Northwest 281.8kt (+13.4%), revenue RMB1.856bn, gross profit RMB3.96m; Central China 120.9kt; North China 37.9kt [S1] | Bi-weekly cost-plus spreads tied to the PRC guided price mechanism [S22] |
| "Fixed investment" direct-supply business | Dedicated supply into Sinopec stations | Sinopec Henan (Sanmenxia stations); Sinopec Shiyan, Hubei (24 stations) | 2025: Sanmenxia 52.2kt, with spread rising from RMB38/t to RMB93.58/t after restructuring in Sep 2025; Shiyan 5.7kt at RMB130/t [S1]. 2024: served 37 Sinopec Henan stations (44% of Sanmenxia stations) [S3] | Fixed per-tonne spread |
| Yangtze River water-borne trade | Own-arranged shipments to central and south-west China | Distributors in 12 cities across 6 provinces (2024) | 2025: 187.8kt, gross profit RMB5.25m [S1]. 2024: 68.2kt, revenue RMB602m [S3] | Spread trading |
| External sourcing ("centralised procurement") | Third-party sourcing and resale (Ningxia, Shandong origin) | Shell Chongqing/Wuhan, regional buyers | 2025 revenue RMB2.947bn [S1]; 2024 volume 42.7kt [S3] | Spread trading |
| Railway channel | Rail-delivered wholesale | Sinopec, CNPC, local reserve and private companies | 2024: 64.9kt, RMB464m [S3] | Negotiated |
| Highway channel | Road delivery within about 200 km of each station | End users in Henan, Shanxi, Ningxia, Inner Mongolia | Volume not disclosed for 2025 [S3] | Negotiated |
| Oil-depot sales | Depot ex-tank sales with case-by-case pricing | Large and loyal customers | 2024: 62 new customers; major-customer sales 52.9kt [S3] | Negotiated |
| State reserve supply | Supply into provincial reserves | Hubei state reserve | 2024: 90kt, spread above RMB11m [S3] | Tender/negotiated |
| Retail gas stations | Owned/leased stations (e.g., Xiangcheng); member programme | Motorists, local businesses | 350,000 members in 2024 [S3]. Station count: not publicly disclosed | Retail pump prices within PRC caps |
| Gift cards, vouchers, oil cards | Prepaid products | Retail and corporate customers | 2024 gift card sales RMB105,300 [S3] | Prepaid |
| Storage services | Third-party tank storage | Traders | FY2025 storage fee income HK$0.7m [S1] | Fee |
| Chemical products and ethanol trading | Opportunistic trading (e.g., Yanchang Xinghua ethanol, 2022) | Industrial buyers | — | Spread |
| LNG (planned) | Feasibility study completed; framework contract signed with Shaanxi Liquefied Natural Gas Investment and Development Co., Ltd. | — | Pre-launch [S1] | — |
| Investment property | PRC properties leased out | Tenants | Fair value HK$11.4m (FY2025) [S1] | Rent |
Discontinued / legacy offerings
| Offering | Status |
|---|---|
| Bitumen and oil processing/trading (Yanchang Zhejiang) | 347.8kt sold in 2022 (RMB1,415m revenue, RMB762m loss); suspended in 2022 and deconsolidated in 2023 [S4][S3] |
| International crude oil procurement | A secondary profile cites about 12.86 million tonnes procured since H2 2017 (about US$5.74bn of sales) |
| Photovoltaic exploration | Mentioned as an exploratory direction in the 2022 outlook; no subsequent disclosure [S4] |
Financial Narrative
All figures HK$ millions, fiscal years ended 31 December. Sources: FY2021–FY2022 from Annual Report 2022 [S4]; FY2023 from FY2024 results [S3]; FY2024–FY2025 from FY2025 results and Annual Report 2025 [S1][S2]. Derived ratios are analyst calculations.
Income statement
Notes:
-
Gross profit follows the company's FY2024–FY2025 definition (revenue less cost of revenue, royalties and field operation expenses) and is applied consistently to all years (derived for FY2021–FY2023).
-
Operating income is derived as pre-tax income plus finance costs, excluding the FY2023 deconsolidation gain.
-
EBITDA is derived as operating income plus DD&A.
-
Adjusted EBITDA (derived) adds back net impairments/reversals, litigation provisions, ECL and inventory write-downs: FY2022 impairment reversal −170.7, litigation +448.3, ECL +115.1, inventory +24.6; FY2023 impairment +158.5, ECL +43.9, litigation +84.3, E&E reversal −0.5; FY2024 reversal −137.6, ECL +5.7; FY2025 impairments +624.2, ECL +52.2. FY2021 is not computed because the HK$332.3m "other gains" line was not broken down in the sources reviewed.
-
EPS: FY2023–FY2025 are as reported, with FY2023 restated for the share consolidation [S3]. FY2021–FY2022 are analyst-restated on a post-consolidation basis (pre-consolidation shares of about 18,335m ÷ 20 ≈ 916.8m). Pre-consolidation reported EPS for FY2021 would be about 1.93 HK cents (derived).
Margins and growth (derived)
FY2021 growth is based on FY2020 revenue of HK$27,256.8m [S4]. Revenue CAGR FY2021–FY2025: −3.3% a year (derived). The 5-year CAGR from FY2020 is −8.6% a year (derived).
Commentary. Reported turnover follows PRC refined-product prices and Henan Yanchang's traded volumes rather than value creation. The 51% jump in FY2022 came with lower volumes (3.60mt vs 4.89mt) because selling prices were higher [S4]. The FY2025 collapse reflects a 38% volume decline (3.84mt to 2.37mt), which management attributes to weak end-demand, changes to direct-distribution policy, roadworks affecting stations, and tighter supervision of external-sourcing business [S1].
Gross margin has never exceeded 2% and has compressed steadily from 1.92% to 0.74%. The bottom line is set by non-operating and non-cash items: the HK$882m deconsolidation gain (FY2023), HK$448m of litigation provisions (FY2022), and the Novus impairment swing (+HK$137.6m in FY2024, −HK$548.9m in FY2025). Adjusted EBITDA of HK$57m in FY2025, the lowest of the four computable years, is the clearest signal of underlying deterioration.
Balance sheet
Notes: Total debt is bank borrowings and other loans plus secured term loans [S1][S3][S4]. The short/long split for FY2021–FY2022 was not separately verified. FY2022 net debt is HK$709.2m if restricted cash is netted. At 31 Dec 2025, other loans from Yanchang Petroleum Group (unsecured) are about HK$111.3m (derived: 254.3 less PRC bank borrowings of 143.1) [S1].
Commentary. The balance sheet has shrunk by 39% since FY2022, mainly from the removal of Yanchang Zhejiang and the Novus write-down. FY2025 equity of HK$581m is the second-lowest in the five-year window, and the company's gearing ratio (total liabilities ÷ equity) jumped to 375.5% from 115.4% [S1]. Year-end working capital lines swell and shrink with Henan Yanchang's trading cycle: receivables of HK$1,105m and payables of HK$1,143m at end-2025 were almost all aged under 30 days [S1]. Cash fell 77% to HK$63.7m, against financial liabilities of HK$1,956m that are on demand or contractually due within one year [S1].
Cash flow
Interim data points: H1 2023 net operating cash inflow HK$169.8m (H1 2022: HK$226.0m) [S23]; H1 2026 operating cash flow per share about HK$0.04, implying roughly HK$44m (derived from [S27]). The FY2022 capex proxy is Canadian development costs [S4]. The FY2021 Novus figure is investment in Viking development per the company's press release [S24b]. No dividends or buybacks occurred in any year [S1][S3][S4].
Commentary. Capex has collapsed from HK$452m (FY2022 drilling of 52 wells) to HK$13.5m (FY2025, 0.25 net wells). Novus has been self-funded in the absence of external capital [S1]. Without reinvestment, production declines naturally (27% decline rate in 2025, per management) [S1], which undermines future cash generation.
Ratios (derived)
Notes: Gearing and current ratio are as reported by the company [S1][S3][S4]. Net debt/EBITDA is not meaningful where EBITDA is negative or near zero (FY2022, FY2023, FY2025). The cash conversion cycle uses year-end receivables, inventories and trade payables against revenue and cost of revenue. FY2025 components: DSO 23.3 days, DIO 6.2 days, DPO 24.4 days.
Trend interpretation. Returns depend on one-offs: the FY2023 ROE of 63.8% is almost entirely the deconsolidation gain. The trading model turns capital over 6–9 times a year but earns well under 1% on revenue, so returns on capital track Novus's commodity cycle and impairment testing. Interest cover was negative in three of five years. Leverage looks moderate in debt/equity terms (1.2x) but is acute in liquidity terms (cash covers about 9% of total debt).
Unlock Company Financials
Unlock this company profile to view its financial data.
View Subscription PlansFinancial Detail
Group Structure
| Level | Entity | Ownership | Role |
|---|---|---|---|
Ultimate parent | Shaanxi Yanchang Petroleum (Group) Co., Ltd. (Shaanxi provincial SOE) | — | Controlling shareholder; refined-product supplier |
Immediate parent | Yanchang Petroleum Group (Hong Kong) Co., Limited | 57.66% of listco | Lender of secured term loans (US$57m total) |
Second-largest holder | ChangAn Huitong Investment (Hong Kong) Co., Ltd. (part of the Chang An Huitong group, Shaanxi) | 16.67% | Strategic/financial investor; nominates the NED |
Listco | Yanchang Petroleum International Limited (Bermuda) | — | Investment holding |
Subsidiary | Novus Energy Inc. (Calgary, Canada) | 100% (indirect) | Upstream E&P (Saskatchewan, Alberta) |
Subsidiary | Henan Yanchang Petroleum Sales Co., Ltd. | 70% (indirect) | PRC refined-oil wholesale and retail |
Intermediate | Sino Union Energy International Limited | 100% (direct) | Holding vehicle (35% of it was pledged in 2022) |
Former subsidiary | Yanchang Petroleum (Zhejiang FTZ) Ltd. | Non-wholly owned; deconsolidated FY2023 | Former bitumen/oil processing and trading; in bankruptcy proceedings |
Asset interest | Madagascar Block 3113 | JV with Yanchang Group and EasyGo | Dormant (no activity in FY2022 or FY2025) |
Segment Overview
| Segment | What it contains | Products/services | Operating entity |
|---|---|---|---|
Exploration, exploitation and operation | Oil and gas exploration, exploitation, sale and operation | Light crude (Viking), associated natural gas, NGLs | Novus Energy Inc. |
Supply and procurement | Storage, transportation, trading and distribution of oil-related products | Gasoline, diesel, chemical products, storage services, retail fuel | Henan Yanchang (Yanchang Zhejiang until 2022) |
Revenue by Segment
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Exploration exploitation and operation revenue (HKD Mn) | 199.8 | 443.9 | 501.8 | 331.3 | 186.2 |
Supply and procurement revenue (HKD Mn) | 19,576.7 | 29,492.3 | 27,240.7 | 28,853.6 | 17,140.3 |
Total revenue (HKD Mn) | 19,776.5 | 29,936.2 | 27,742.5 | 29,184.9 | 17,326.5 |
Unlock Company Financials
Unlock this company profile to view its financial data.
View Subscription PlansResults by Segment and Segment Margins & Growth (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
E&E segment profit (HKD Mn) | 23.9 | 124.2 | 33.4 | -4.3 | -68.0 |
S&P segment profit (HKD Mn) | 81.7 | -787.0 | -118.1 | 5.1 | 1.7 |
E&E segment margin (%) | 12.0 | 28.0 | 6.7 | -1.3 | -36.5 |
S&P segment margin (%) | 0.42 | -2.67 | -0.43 | 0.02 | 0.01 |
E&E revenue YoY growth (%) | — | 122.2 | 13.1 | -34.0 | -43.8 |
S&P revenue YoY growth (%) | — | 50.7 | -7.6 | 5.9 | -40.6 |
E&E share of revenue (%) | 1.01 | 1.48 | 1.81 | 1.14 | 1.07 |
S&P share of revenue (%) | 98.99 | 98.52 | 98.19 | 98.86 | 98.93 |
Segment Assets & Liabilities
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
E&E segment assets (HKD Mn) | 1,872.4 | 1,741.2 | 1,159.3 |
S&P segment assets (HKD Mn) | 1,788.6 | 1,033.6 | 1,576.7 |
E&E segment liabilities (HKD Mn) | 596.6 | 498.0 | 495.3 |
S&P segment liabilities (HKD Mn) | 1,556.6 | 819.5 | 1,501.8 |
Revenue by Segment (Half-Yearly)
| Metric | H1 2025 | H1 2026 |
|---|---|---|
E&E revenue (HKD Mn) | 94.1 | 80.7 |
S&P revenue (HKD Mn) | 9,900.0 | 6,944.0 |
E&E operating result (HKD Mn) | -34.3 | -12.7 |
S&P operating result (HKD Mn) | 2.4 | 5.6 |
Group revenue (HKD Mn) | 9,995.0 | 7,024.0 |
Loss for period (HKD Mn) | -27.8 | -40.2 |
Income Statement and Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue (HKD Mn) | 19,776.5 | 29,936.2 | 27,742.5 | 29,184.9 | 17,326.5 |
Cost of revenue / purchases (HKD Mn) | 19,315.7 | 29,472.9 | 27,145.3 | 28,783.0 | 17,088.1 |
Gross profit after royalties and field opex (HKD Mn) | 379.0 | 325.2 | 395.4 | 255.0 | 127.4 |
Depreciation depletion and amortisation (HKD Mn) | 86.3 | 169.6 | 240.7 | 163.4 | 126.6 |
Operating income before finance costs (HKD Mn) | 423.3 | -557.6 | -234.7 | 90.1 | -746.3 |
EBITDA reported basis (HKD Mn) | 509.6 | -388.1 | 6.0 | 253.5 | -619.7 |
Adjusted EBITDA ex impairments litigation and ECL (HKD Mn) | — | 29.3 | 292.2 | 121.6 | 56.7 |
Finance costs (HKD Mn) | 45.8 | 50.6 | 58.9 | 34.9 | 35.9 |
Gain on deconsolidation (HKD Mn) | 0 | 0 | 882.1 | 0 | 0 |
Pre-tax income (HKD Mn) | 377.6 | -608.3 | 588.4 | 55.2 | -782.2 |
Net income (HKD Mn) | 358.5 | -619.1 | 580.1 | 55.6 | -782.4 |
Net income attributable to owners (HKD Mn) | 353.6 | -199.5 | 217.6 | 54.1 | -758.6 |
EPS basic and diluted (HK cents) | 38.57 | -21.76 | 19.89 | 4.92 | -68.96 |
Dividend per share (HK cents) | 0 | 0 | 0 | 0 | 0 |
Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Gross margin (%) | 1.92 | 1.09 | 1.43 | 0.87 | 0.74 |
Operating margin (%) | 2.14 | -1.86 | -0.85 | 0.31 | -4.31 |
EBITDA margin reported (%) | 2.58 | -1.30 | 0.02 | 0.87 | -3.58 |
Net margin (%) | 1.81 | -2.07 | 2.09 | 0.19 | -4.52 |
Revenue YoY growth (%) | -27.4 | 51.4 | -7.3 | 5.2 | -40.6 |
Balance Sheet
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Total assets (HKD Mn) | 4,508.7 | 4,518.2 | 3,684.5 | 2,800.0 | 2,763.9 |
Non-current assets (HKD Mn) | 1,653.6 | 2,050.4 | 2,041.0 | 1,926.2 | 1,258.6 |
Cash and bank balances (HKD Mn) | 394.1 | 133.2 | 226.2 | 278.7 | 63.7 |
Restricted cash (HKD Mn) | 0 | 303.4 | 0 | 0 | 0 |
Short-term debt (HKD Mn) | — | — | 850.9 | 159.7 | 254.3 |
Long-term debt (HKD Mn) | — | — | 0 | 444.7 | 445.2 |
Total debt excl leases (HKD Mn) | 870.3 | 1,145.8 | 850.9 | 604.3 | 699.5 |
Lease liabilities (HKD Mn) | 84.9 | 101.5 | 94.7 | 66.4 | 48.4 |
Net debt excl leases (HKD Mn) | 476.2 | 1,012.6 | 624.8 | 325.7 | 635.8 |
Decommissioning liabilities (HKD Mn) | 169.9 | 169.8 | 171.3 | 166.8 | 176.9 |
Total liabilities (HKD Mn) | 3,341.3 | 4,048.8 | 2,336.4 | 1,499.8 | 2,182.7 |
Total equity (HKD Mn) | 1,167.4 | 469.4 | 1,348.2 | 1,300.2 | 581.2 |
Equity attributable to owners (HKD Mn) | — | — | 1,290.9 | 1,248.0 | 555.6 |
Goodwill and intangibles (HKD Mn) | 58.1 | 58.1 | 58.1 | 58.1 | 0 |
Working capital (HKD Mn) | -51.5 | -1,132.7 | -424.0 | 56.9 | -1.6 |
Cash Flow
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Additions to PP&E RoU and E&E assets capex proxy (HKD Mn) | — | 451.9 | 360.1 | 80.4 | 13.5 |
Novus capital expenditure (CAD Mn) | 41.0 | — | — | 11.3 | 1.3 |
Dividends paid (HKD Mn) | 0 | 0 | 0 | 0 | 0 |
Share buybacks (HKD Mn) | 0 | 0 | 0 | 0 | 0 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Ratio | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
ROE on average total equity (%) | 36.4 | -75.6 | 63.8 | 4.2 | -83.2 |
ROA on average total assets (%) | 10.0 | -13.7 | 14.1 | 1.7 | -28.1 |
ROIC NOPAT at 25 pct over equity plus debt (%) | 15.6 | -25.9 | -8.0 | 3.5 | -43.7 |
Current ratio (x) | 0.98 | 0.69 | 0.79 | 1.07 | 1.00 |
Debt to equity (x) | 0.75 | 2.44 | 0.63 | 0.46 | 1.20 |
Total liabilities to equity company gearing (%) | 286.2 | 862.5 | 173.3 | 115.4 | 375.5 |
Net debt to reported EBITDA (x) | 0.93 | — | — | 1.28 | — |
Interest coverage operating income over finance costs (x) | 9.2 | -11.0 | -4.0 | 2.6 | -20.8 |
Asset turnover (x) | 5.54 | 6.63 | 6.76 | 9.00 | 6.23 |
Cash conversion cycle year-end basis (days) | — | — | 5.4 | 0.9 | 5.1 |
Revenue by Region
| Region | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
PRC revenue (HKD Mn) | 19,576.7 | 29,492.3 | 27,240.7 | 28,853.6 | 17,140.3 |
Canada revenue (HKD Mn) | 199.8 | 443.9 | 501.8 | 331.3 | 186.2 |
Hong Kong and others revenue (HKD Mn) | 0 | 0 | 0 | 0 | 0 |
Region Margins & Growth (%)
| Region | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
PRC revenue growth (%) | 50.7 | -7.6 | 5.9 | -40.6 |
Canada revenue growth (%) | 122.2 | 13.1 | -34.0 | -43.8 |
Region Assets & Liabilities
| Region | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
PRC non-current assets (HKD Mn) | 287.3 | 254.3 | 151.7 |
Canada non-current assets (HKD Mn) | 1,751.0 | 1,671.1 | 1,103.3 |
Hong Kong and others non-current assets (HKD Mn) | 2.7 | 0.8 | 3.6 |
Markets
| Market | Data point |
|---|---|
South-west China | 49% of Henan Yanchang distribution (2022) |
Hunan and Hubei | 206.2kt (2022), more than 30% of distribution; Hunan 129.3kt (2022) vs 41kt (2021) |
Henan (Sanmenxia) | 52.2kt fixed-investment supply (2025) |
Hubei (Shiyan) | 5.7kt (2025), first out-of-province fixed-investment business |
Yangtze River corridor | 187.8kt (2025) |
Ningxia, Shandong | Sourcing hubs for centralised procurement (2024) |
Valuation Snapshot
| Metric | Value |
|---|---|
Last close | HK$0.225 |
52-week range | HK$0.22 – HK$0.78 |
Market capitalisation | about HK$247.5m |
Prior year-end close (31 Dec 2025) | HK$0.365 |
YTD 2026 change | −38.4% (derived) |
Approximate 1-year change | about −43% (derived from Tiger market-cap series: about HK$434.5m on 17 Oct 2025) |
Approximate 3-year change | about −42% (derived: about HK$434.5m on 20 Oct 2023) |
Approximate 5-year change | about −86% (derived, consolidation-adjusted; low confidence) |
Daily turnover | Very thin (e.g., 415,000 shares / HK$92,800 on 16 Oct 2026) |
Market Valuation
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Market capitalisation at year end (HKD Mn) | 916.8 | 1,026.8 | 440.0 | 286.0 | 412.5 |
Valuation Multiples
| Multiple | Yanchang Petroleum Intl | Basis |
|---|---|---|
P/E (FY2025) | n.m. (loss) | EPS −68.96 cents [S1] |
P/B | about 0.49x | Tiger quote [S16]; consistent with H1 2026 NAV/share of HK$0.46 [S27] |
EV | about HK$909m | Market cap 247.5 + total debt 699.5 + NCI 25.7 − cash 63.7 (FY2025 balance sheet) |
EV/Sales (FY2025) | about 0.05x | — |
EV/EBITDA (FY2025) | n.m. (negative reported EBITDA); about 16x on adjusted EBITDA of HK$56.7m | — |
EV per 2P boe | about HK$54/boe (about US$7/boe) | 16.76 MMboe [S2]; ignores the PRC business |
Capital Instruments
| Instrument | Principal | Rate | Maturity | Security |
|---|---|---|---|---|
Secured term loan (Novus) from Yanchang Petroleum HK | US$35m (about HK$273m) | 4.8% | 17 Jan 2027 | US$70m debenture over all of Novus's assets |
Secured term loan (Company) from Yanchang Petroleum HK | US$22m (about HK$172m) | 5.2% | About Aug/Sep 2027 (3 years from Aug 2024 renewal; derived) | 70% of Henan Yanchang shares; best-efforts valuation floor of US$31.43m |
PRC bank borrowings (Henan Yanchang) | HK$143.1m (RMB128.6m) | Variable | Within 1 year | Unsecured per the pledge note |
Other loans from Yanchang Petroleum Group | about HK$111.3m (derived) | — | Within 1 year | Unsecured |
PRC bank facilities available | HK$750.9m (RMB675m) | — | — | — |
“—” = not publicly disclosed.
Analyst Conclusions
Management guidance
No numerical guidance. Management expects a highly volatile oil price environment, continued weak demand recovery, and supply volatility linked to the Middle East conflict. Priorities are "robust operation": cost control and recovery upstream, flexible sales strategy and risk hedging downstream, and cautious diversification [S2]. Henan Yanchang's 2026 objective is a return to profit [S6].
Consensus
No sell-side consensus estimates exist.
Bull case
-
Oil-price leverage on a depressed asset base. After a HK$548.9m write-down, Novus's carrying value (about HK$1.09bn recoverable amount [S1]) is based on a lower forward price deck. Sustained WTI above US$80 (the top case in management's 5-year plan [S1]) could trigger reversals, as in FY2024, and restore positive operating cash flow.
-
Deep discount to book and reserves. At about 0.49x P/B and about US$7 of EV per 2P boe (derived), the market prices in substantial distress. Any asset sale (e.g., Wapiti) or parent-led restructuring could realise value well above the market capitalisation.
-
Parent support has been reliable. Loans were renewed in 2022, 2024 and 2025–26, and a strategic investor (ChangAn HuiTong) injected about HK$281m in 2023 [S1][S4]. This suggests the controlling shareholder is unlikely to let the listed vehicle fail.
Bear case
-
Liquidity is binding. Cash of HK$63.7m against HK$1,956m due within a year, an auditor's going-concern material uncertainty, and maturity of the US$35m loan in January 2027 [S1]. Any wavering in parent support would be existential.
-
Both engines are shrinking. Novus volumes fell 30.3% in H1 2026 with no new wells [S6]. PRC volumes fell 32% [S6]. Adjusted EBITDA fell to about HK$57m in FY2025 (derived). The equity cushion halved in FY2025 to HK$581m, so a further impairment cycle would erode it quickly.
-
Governance and control risk. No CEO for seven years, entrenched INEDs, frequent chairman absence from AGMs, a new chairman (Aug 2026), and a fraud incident within the trading arm [S2][S7][S8]. Minority investors also face connected-party dependence for both supply and funding.
Catalysts and monitorables (next 12 months)
| Catalyst / monitorable | Timing | Why it matters |
|---|---|---|
| Renewal or refinancing of the US$35m Novus loan (maturity 17 Jan 2027) | Q4 2026 – Jan 2027 | Going-concern test; likely needs an SGM |
| Outcome of the independent investigation and inventory recovery | H2 2026 – H1 2027 | Internal-control credibility; possible write-off of about HK$22m |
| New chairman Hu Yujie's strategic agenda; any CEO appointment or INED refresh | H2 2026 – 2027 | Governance repair |
| Wapiti disposal or any Novus farm-out | 2026–2027 | Liquidity and asset high-grading |
| WTI / WCS and AECO prices; Novus year-end reserves (Sproule) | Year-end 2026 | Impairment or reversal |
| Henan Yanchang volumes, spreads, LNG launch | Monthly / quarterly | Turnaround evidence |
| FY2026 results and auditor's opinion | About Mar 2027 | Whether the going-concern MU persists |
| Renewal of the Supply Agreement (expired 31 Dec 2025) and Sales Agreements (expire 31 Dec 2026) | 2026–2027 | cap levels affect trading capacity |
Analyst verdict
Yanchang Petroleum International is a controlled, sub-scale holding company whose reported revenue (HK$17.3 billion in FY2025) greatly overstates its economic substance. About 99% of turnover comes from a refined-products conduit that earns spreads of tens of renminbi per tonne and produced a segment profit of only HK$1.7 million last year. The real asset is Novus Energy: a technically competent but capital-starved Viking light-oil producer holding 16.8 MMboe of 2P reserves. Novus's value is set by commodity price decks, and the FY2025 impairment of HK$549 million shows how quickly that value can be marked down.
The investment debate therefore turns on liquidity and parent intent rather than operations. The FY2025 accounts carry an auditor's going-concern material uncertainty. Cash is HK$64 million against nearly HK$2 billion of near-term liabilities. Funding depends on renewals of parent loans and PRC bank lines. The parent has supported the company consistently and recruited a co-investor in 2023, so outright failure looks unlikely. Even so, the trajectory is negative: upstream drilling has effectively stopped, PRC volumes are falling by a third a year, adjusted EBITDA is near HK$57 million, and governance has worsened, with a new chairman, no CEO since 2019, long-tenured INEDs and a fraud incident.
At about 0.5x book and roughly US$7 per 2P barrel of enterprise value, the shares embed substantial distress. Upside requires an exogenous oil-price rally that sustains impairment reversals, or a corporate action such as an asset sale, a parent privatisation or a recapitalisation. None has been announced. The equity is thinly traded and minority influence is limited.
Overall assessment: high-risk, special-situation exposure with negative fundamental momentum. The January 2027 loan renewal and the investigation outcome are the next decisive markers.
Unlock Company Financials
Unlock this company profile to view its financial data.
View Subscription PlansExecutive Leadership
Board of Directors
| Name | Role | Appointed | Age | Background | Committees |
|---|---|---|---|---|---|
Hu Yujie | Chairman, Executive Director, authorised representative | 26 Aug 2026 | 56 (Investing.com) | — | — |
Wang Haining | Executive Director | 22 Jul 2024 | 49 | Senior accountant; Director of the Finance Center and Deputy Party Secretary, Yanchang Petroleum Group; former Chief Accountant, Shaanxi Yanchang Petroleum Materials Group (2017–2022); BA Finance, Central University of Finance and Economics (2000) | Nomination (from 1 Jul 2025) |
Ding Jiasheng | Executive Director | 1 Apr 2021 | 38 | Executive Chairman of Novus; joined Novus May 2014; BSc Petroleum Engineering (University of Alberta), MS Earth and Environment (Columbia); P.Eng. | — |
Lu Yiwen | Non-Executive Director | 8 Apr 2025 | 35 | Budget analyst, Changan Huitong Group; former investment banking product manager, SPDB Xi'an (2016–2020); MEcon, Fudan University | — |
Ng Wing Ka | INED | 7 Jan 2005 | 56 | Solicitor (partner, Tung, Ng, Tse & Lam); NPC deputy; LegCo member; INED of MTR Corp., Glorious Sun, Catalo Natural Health Science | Nomination (Chair), Audit |
Leung Ting Yuk | INED | 3 Dec 2009 | 51 | CPA (Australia), HKICPA; more than 21 years in finance and audit; INED of Most Kwai Chung, Xinyi Energy, Tai United, Shangshan Gold | Audit (Chair), Remuneration |
Sun Liming | INED | 1 Apr 2012 | 72 | Former MD of Lishan Co. and chief representative of the Shaanxi Commerce Office in HK; former ED/co-CEO of DTXS Silk Road (Feb 2023–Jan 2024) | Remuneration (Chair), Audit, Nomination |
Mu Guodong | INED | 28 Dec 2012 | 68 | PhD Economics (University of New England); former China Merchants Group executive (M&A); INED of Shaanxi Energy Investment | — |
Executive Leadership Team
| Name | Title | Since | Notes |
|---|---|---|---|
Law Hing Lam | Company Secretary, Financial Controller, authorised representative | 21 Mar 2011 | Aged 62; HKICPA, AICPA [S2] |
Ding Jiasheng | Executive Chairman, Novus | — | Also an ED [S2] |
CEO | Vacant | Since 1 Jun 2019 | Deviation from CG Code C.2.1 [S2] |
Directors' Remuneration
| Pay band (HKD) | FY2024 individuals | FY2025 individuals |
|---|---|---|
1,500,001–2,000,000 | 2 | 1 |
2,000,001–2,500,000 | 1 | 1 |
2,500,001–3,000,000 | 0 | 1 |
3,000,001–3,500,000 | 1 | 0 |
4,000,001–4,500,000 | 1 | 0 |
4,500,001–5,000,000 | 0 | 1 |
5,000,001–5,500,000 | 0 | 1 |
Governance Overview
| Item | Detail |
|---|---|
Size and mix | 8 directors: 3 ED, 1 NED, 4 INED; 50% independent [S2][S8] |
Gender | 2 female of 8 (25%); policy floor of at least 10% [S2] |
Chair/CEO separation | No CEO since 2019; executive chair model [S2] |
INED tenure | All four INEDs have served more than 9 years; no new INED identified despite CG Code B.2.4(b) [S1][S2] |
Committees | No dedicated risk or ESG committee; internal audit is outsourced [S2][S4] |
Attendance (FY2025) | 13/13 board meetings for all directors except Sun Jian (0/5). Chairman and EDs missed the 2025 AGM [S2] |
Other CG deviations | Chairman absent from AGMs in 2022, 2024 and 2025 [S1][S3][S4] |
Internal control | Inventory misappropriation (RMB19.24m) disclosed Aug 2026; independent review commissioned [S7] |
Major Shareholders
| Holder | Shares | % | Source |
|---|---|---|---|
Yanchang Petroleum Group (HK) (ultimately Shaanxi Yanchang Petroleum (Group)) | 634,310,161 | 57.66 | [S2] |
ChangAn Huitong Investment (HK) (ultimately Chang An Huitong Co., Ltd.) | 183,350,467 | 16.67 | [S2] |
Sun Liming (INED) | 30,000 | 0.003 | [S2] |
Mu Guodong (INED, including spouse) | 15,000 | 0.001 | [S2] |
Public float (derived) | about 282.4m | about 25.67 | derived |
Competitive Landscape
Key Competitors
| Competitor | Relevance | Scale indicator |
|---|---|---|
Whitecap Resources | Large Viking and Saskatchewan light-oil operator; merged with Veren in 2025 | 2025 production 307,245 boe/d; P&NG revenues C$5,633.8m |
Teine Energy (private) | Viking operator; Novus JOA partner | — |
Baytex Energy | Historical Viking position (via Raging River) | — |
Cardinal Energy | Saskatchewan light-oil peer | — |
Saturn Oil & Gas | Saskatchewan and Alberta light-oil consolidator | — |
Tamarack Valley Energy | Alberta oil peer | — |
Sinopec (marketing) | Dominant wholesaler and retailer; also a key customer | — |
PetroChina (marketing) | Second national network; CNPC Hubei is a customer | — |
CNOOC (marketing) | Regional wholesaler; CNOOC Huadong is a customer | — |
Shell JV entities (e.g., Yanchang Shell Henan) | International JV retail | Connected-party customer |
Private independents and teapot-linked wholesalers (Shandong, Ningxia) | Price competitors in external sourcing | — |
United Energy Group (0467.HK) | HK-listed upstream-led energy company with trading | FY2025 turnover about HK$19.19bn; net profit HK$1,117m; gross profit HK$3,381m |
“—” = not publicly disclosed.
Peer Comparison FY2025
| Metric | Yanchang Petroleum Intl (FY2025) | United Energy Group (FY2025) | Whitecap Resources (FY2025) |
|---|---|---|---|
Revenue | HK$17,327m | HK$19,190m (reported in a secondary summary) | C$5,633.8m P&NG revenues |
Revenue growth | −40.6% | +7.9% (derived from secondary figures) | +54% (merger-driven) |
Gross margin | 0.74% | 17.6% (derived) | Operating netback C$28.25/boe |
Net margin | −4.5% | 5.8% (derived) | — |
Production | about 1,485 boe/d (derived) | — | 307,245 boe/d |
