PetroChina stock rocketed to ￥48.6 shortly after its initial public offering in 2007. It recently hit a record low of ￥9.  Does that mean it's finally time to buy? Maybe.

Heavy investment by the company in offshore drilling and pipelines should start to pay off over the next few years, says Jingpu Guo, an analyst at Hong Kong-based Cinda Securities, and the company pays a healthy dividend yield above 3.5%. Those two factors give PetroChina stock a potential upside of more than 50% he says, putting the top of his target range at ￥13.

"Once the company passes this phase, its cash flows will recover to a better level, its valuation and profitability will be much better," says Guo.

PetroChina stock was a victim of horrible timing more than company blunders or mismanagement. The Shanghai Composite stock index peaked around 6,000 in the heady year when PetroChina went public. The index's current value is about 2,100. So PetroChina is an underperfomer, but not by that much.

The most promising development for PetroChina stock is the company winning two tenders for offshore drilling earlier this year, breaking the monopoly of China National Offshore Oil Corporation (CEO, quote). CNOOC shares have performed twice as well as PetroChina's over the past three years.

Aside from securing the two blocks off the coast of China, PetroChina has signed a series of agreements with foreign countries including Indonesia and Cuba to explore undersea resources. The company recently established six subsidiaries for offshore drilling and transportation.

PetroChina stock may also benefit as the company finishes several capital-intensive gas and oil pipeline projects in northern and south-western China. Pipelines generally involve heavy costs up front, then pay back steadily over decades.

The stock could also get a boost from the company's expansion into the financial sector, which started with its 2009 acquisition of Bank of Kunlun. Having its own bank spells lower financing costs for PetroChina compared to Chinese energy competitors. And Kunlun has benefited from its parent company's broad networks and reputation as a state-owned giant. The bank's net profit jumped 79% to ￥1.2 billion ($188 million) last year, and its asset base jumped by more than half to ￥130 billion ($20.4 billion).

The global market downturn of the past few months has been particularly punishing for emerging-market oil companies. PetroChina stock has lost 17% of its value since March 1, about the same as Russian national champion Rosneft (RNFTF, quote), but much better than the train wreck at Brazil's Petrobras (PBR, quote), which has slid by 35%.

If global oil prices (USO, quote) continue to firm as they have over the past few weeks, Petrochina stock could finally get a break, or better yet — a bounce.