[ET Net News Agency, 10 July 2018] Nomura lifted its target price for CNOOC (00883) to
HK$16.9 from HK$16.6, and reiterated its "buy" rating noting compelling valuation.
The research house revised up its 2018/2019 EBITDA forecasts by 5%/8% to reflect its
recent upward revision in Brent assumption (from US$65/63/63 to US$70/70/65 for 2018-20).
Nomura expects CNOOC's all-in-cost to trend up by US$3.6/boe (or 10%) driven by
industrywide cost inflation on the back of oil price recovery, but operating profit/boe
should increase by US$9.7 (by 77%) on higher oil prices given its high operating leverage
(50-60% of CNOOC's all-in costs are DD&A).
Overall, it expects CNOOC's operating profit and EBITDA to rise by 111% and 39% this
year. (KL)