[ET Net News Agency, 11 March 2020] HSBC Global Research slashed its target price for
CNOOC (00883) to HK$9.6 from HK$16.72 and maintained its "buy" rating.
The research house said CNOOC's earnings stream is directly exposed to the oil price
shock as a pure upstream producer. However, HSBC assumed that CNOOC will deliver on its
medium-term output targets. In context, CNOOC's 2019 budget price was US$53/b, and CNOOC's
all-in cost has been below US$30/b.
CNOOC guided for production for 525/555/590mb for 2020/21/22, implying a healthy 3-year
CAGR of 5%. HSBC estimated that the company's all-in cost is likely to remain near
US$30/b, maintaining the company's position as a very cost-competitive global producer.
HSBC cut its 1Q Brent forecast to US$54/b, implying an average price of US$40/b for the
remainder of the quarter. It assumed an average price of US$42/b in 2Q, before recovering
to US$50/b in 2H on the back of seasonal demand strength. (KL)
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00883 CNOOC
Nominal 
19.000 +0.280 (+1.496%) Others
11/03/2020 15:57
{I-bank focus}HSBC slashes CNOOC (00883) to HK$9.6; "buy"
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