Yamato: It is expected that oil and gas prices will remain at higher levels for a longer period of time. Our top picks are XinAo Energy and NewWei.

Daiwa published a research report indicating that the crisis in the Strait of Hormuz reshapes the risk-return profile of the oil and gas sector. Even considering that the situation may ease to a certain extent, it is expected that the center of oil and gas prices will remain at a higher level for a longer period of time. The price of Brent crude oil may fluctuate in a new range of 75 to 90 US dollars per barrel, and the benchmark price of liquefied natural gas may fluctuate in the range of 15 to 18 US dollars per million British thermal units. Daiwa prefers XinAo Energy and Neway Shares as their picks for this sector. Daiwa maintains a cautious stance on city gas stocks, believing that the short-term rise in natural gas prices will erode their recent profit margins. They also believe that companies such as CR Gas and other distributors with a high proportion of liquefied natural gas, if the Dutch natural gas trading center and the benchmark price of liquefied natural gas remain at high levels for a longer period of time than expected, will be the main losers.