- RE-ITERATE BUY Entry 10.62 – Target – 12.08 Stop Loss – 9.98
- CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.
- Russian oil sanction plans. Oil prices extended gains on Thursday on supply concerns as the European Union proposal laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand. The sanctions proposal, which was announced by European Commission President Ursula von der Leyen and needs unanimous backing by the 27 EU countries to take effect, includes phasing out supplies of Russian crude in six months and refined products by the end of 2022.
- Record high dividend yield. CNOOC has proposed to pay HK$1.18 per share in a special dividend payout to A- and H-share investors, totalling an almost HK$56 billion dividend windfall after bumper earnings. The windfall follows the firm’s decision in January to pay out at least 40% of its annual profits from 2022 to 2024 as dividends or at least HK$0.70 per share. The firm also reiterated its decision to implement share buy-backs this year. Earnings jumped 132% YoY in 1Q22 to RMB 34.3bn as crude oil prices surged during the period.
- Valuation and consensus estimates. CNOOC has a consensus rating of 25 BUYS, 1 HOLD and 0 SELL, and a 12 month target price of HIK$15.42. CNOOC is currently trading at 3.77x/4.13x/4.39x FY22F/FY23F/FY24F P/E.
WTI Crude Oil Prices
(Source: Bloomberg)