CNOOC 0883

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DJ MARKET TALK: Cnooc Down 3.8%; Nomura, Citi Both Target HK$20.00

1444 [Dow Jones] Barring a drastic fall in crude oil prices, Cnooc's (0883.HK) 3.8% fall to HK$15.84 appears to be a bit overdone, with its FY11 results and FY12 guidance mostly in-line with expectations, and valuations appear undemanding at 8.4X historic P/E.

Nomura says Cnooc offers sector-leading upstream production growth of 6.5%-7.0% over 2013-18, and a solid balance sheet with net cash position; it keeps Cnooc at Buy with HK$20.00 target.

Separately, Citigroup also has a HK$20.00 target with a Buy rating, although it says that "it remains our view that weak expected volume growth in FY12 will constrain the stock's valuation multiples making it unlikely the stock will reach the 12X-13X P/E valuation range seen in 2010 when the company last saw strong volume growth."

Source: Dow Jones Newswire

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DJ MARKET TALK: UOBKH Raises Cnooc To Buy; Negatives Priced In

1040 [Dow Jones] STOCK CALL: UOB KayHian ups Cnooc (0883.HK) to Buy from Hold, with an unchanged target price of HK$18.00.

It believes the recent share price pullback has factored in negatives including a flat production target guided by the company, cost appreciation in 2011 and oil price volatility in 1Q12, but going forward, "we still believe the company's fundamentals remain solid and suggest investors accumulate the stock on share price weakness."

The house notes Cnooc's long-term production growth is still sustainable with a strong pick-up in 2013-15, and long-term production costs should be controllable. The stock is down 1.5% at HK$15.58.

Source: Dow Jones Newswire

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DJ MARKET TALK: Cnooc +4.5%; Penglai News Spurs Bargain-Hunting

1401 [Dow Jones] Cnooc (0883.HK) zooms 4.5% higher to HK$16.26, although it's still some distance away vs its 50-day moving average at HK$16.81, getting a fillip from news that it has confirmed the size of a crude-oil deposit at its Penglai 9-1 field, which is now being confirmed as a large-scale oilfield.

Bargain-hunting interest is perhaps also being reinforced by the stock's rather undemanding valuations, at 8.4X prospective consensus earnings based on Thomson Reuters.

GuocoCapital says Cnooc will release its 1Q12 operational update on Apr. 25 which "may trigger a consensus profit upgrades."

It adds, for every US$1/bbl increase in crude prices, Cnooc's EPS will increase by 1.2%. Cnooc is the most heavily traded Hong Kong stock with HK$1.12 billion.

Source: Dow Jones Newswire

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CNOOC’s Result Came Despite a Decline in Output Because of the Shutdown of Its Bohai Bay Field in Northeast China

China’s biggest offshore oil and gas producer CNOOC Ltd said its first quarter revenue rose 3.7 percent year-on-year and it was on track to achieve its growth targets for this year.

Source: AFP ASIAN EDITION

[winston]

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Valuation

The company current P/E is only 7.4 times and valuation is on the low side in the industry.

Besides, the company invested in many projects in 2011, but most project are yet to become operational.

With successive operation of the projects in the fiscal year, the corporate profitability will further increase.

By a conservative estimation, the corporate profitability will reach 8 times in 2012, and its 12-month target price is set at HKD 15.84; combined with dividends, its integrated yield is predicted at 15.42%, hence its “accumulate” rating maintained.


Source: Phillips

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DJ MARKET TALK: Cnooc Flat; Shallow Water Opportunities - UBS

1411 [Dow Jones] Cnooc (0883.HK) is unchanged at HK$14.44, unable to build on Friday's 1.3% gain which came on news it made a new oil discovery in Bohai Bay.

"The flow rate and pay zone thickness "look promising," says UBS; "we are encouraged by the continued good track record of new and potentially large discoveries at Cnooc, and in particular that the discoveries have been coming from shallow water areas in offshore China."

The house believes further appraisals of these new discoveries have the potential to renew market confidence in Cnooc's still sizable opportunities in shallow water areas offshore China.

It keeps Cnooc at Buy with a target price of HK$18.50.

Source: Dow Jones Newswire

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DJ MARKET TALK: GS Ups Cnooc To Buy; Best Exposure To Oil Prices

0805 [Dow Jones] STOCK CALL: Goldman Sachs ups Cnooc (0883.HK) to Conviction Buy from Neutral, despite lowering its target price to HK$17.50 vs HK$19.00.

It says with Brent trading below US$100/bbl vs its 2012 forecast average of US$120/bbl, it believes risk-reward for the oil market has improved with a steady outlook on Asian demand amid recovery in Chinese demand in 2H12;

Moreover, it notes many new high cost E&P projects would need oil prices of US$100-plus to recover costs, lending support to oil prices.

GS says Cnooc gives the best exposure to global oil prices and shares had corrected significantly.

Cnooc closed Thursday down 0.5% at HK$14.64, vs a 2012 high of HK$18.20 hit Feb. 20.


Source: Reuters

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CNOOC (00883) maintained OW with TP cut to HK$18.9 by HSBC

HSBC expects offshore oil production of CNOOC in Mainland China would see a relatively robust growth in 2014 and 2015, despite CNOOC is growing at a steady pace at the moment.

The bank lifted its 2012 earnings forecast for CNOOC by 13% to factor in the possibility that oil price may touch US$101 this year.

CNOOC was maintained Overweight with target cut to HK$18.9 from HK$20.5 and remained the top pick of HSBC among the oil industry.

Source: AAStocks Financial News

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DJ MARKET TALK: Cnooc Can Meet 2012 Production Target - Goldman

1054 [Dow Jones] Goldman Sachs says its recent meeting with Cnooc (0883.HK), confirmed that it would be able to meet 2012 production guidance, even without the Penglai 19-3 field.

The house believes that Cnooc can technically increase production from its fields in the coming quarters, barring any unforeseen disruptions or weather incidences.

It adds, with lower oil prices and low U.S. gas prices, Cnooc might look at overseas acquisitions - both conventional and unconventional.

"With the recent correction in Brent price, we believe risk-reward for the oil market has improved with a steady outlook on Asian demand with likely recovery in Chinese demand in 2H 2012," GS says and estimates Cnooc is currently implying long-term oil price of US$81/bbl.
Given Cnooc's best exposure to oil market among Chinese oils and market concerns on volume growth likely priced in, GS reiterates its Buy (on Conviction List) rating on Cnooc with HK$17.50 target.

Cnooc rallies 2.1% to HK$15.72.


Source: Dow Jones Newswire

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DJ MARKET TALK: Cnooc Set To Rally On Oil Prices Rally

0747 [Dow Jones] Cnooc (0883.HK) is set to lead blue chips' rally Wednesday, spurred a rally in oil prices on revived tensions over the Iranian nuclear program and renewed speculation about more central bank easing.

Front-month Nymex crude jumped 4.7% to $87.66/bbl, while Brent crude gained 3.4% to $100.68.

Goldman Sachs estimates that at Cnooc's closing price of HK$15.40 Friday, the stock is currently implying long-term oil price (Brent) of $81/bbl. Cnooc advanced 1.6% to HK$15.64 Tuesday, and is trading at an undemanding 8.1X forward earnings based on Thomson Reuters; it may have a run at its 100-day moving average at HK$15.86 Wednesday.

Source: Dow Jones Newswire