<News Alert> Positive Profit Alert
- Guiding 1H net profit to surge 112-118% y-o-y to Rmb70.5-72.5bn; exceeding full year profit for FY21
- Benefiting from high oil prices, averaging US$106/bbl in 1H22 (vs US$65/bbl in 1H21; US$71/bbl in 2021)
- FY22/23F earnings raised by 15%/9% to reflect the higher oil prices
- Reiterate BUY; TP HK$16.00
More than doubling of profit in 1H22. CNOOC issued a positive profit alert, guiding 112-118% y-o-y growth in 1H22 net profit to Rmb70.5-72.5bn. This surpasses full year profit of Rmb70.3bn for 2021.
Thanks to high oil prices. The surge in profits was driven largely by high oil prices. Brent crude oil price average around US$106/bbl in 1H22, a significant increase of 63% from US$65/bbl in 1H21 and 49% from US$71/bbl in 2021.
Good execution of production growth and cost control as well. CNOOC has demonstrated solid execution of its production growth plan, often exceeding expectations. In addition, it has also been able to keep production cost low and competitive relative to peers.
Raised FY22/23 net profit forecasts by 15/9%. We have raised our oil price assumption for FY22/23 to US$100/90 per barrel respectively (from US$90 / 85 per barrel previously)