[ET Net News Agency, 18 September 2018] CNOOC (00883) is up 21% over the past month and
massively outperformed Big Oils peers & MSCI China. Credit Suisse expects that such
outperformance should continue in 4Q, with solid backing of fundamentals and oil prices
acting as a tailwind.
The research house said CNOOC's structurally lower cost base (US$32/boe all-in cost)
means that it will see operating leverage much stronger than peers under rising oil
prices. Its solid cash flow generation (Rmb130bn opearating cash flow for 2018 at
US$73.5/bbl) also suggests higher payout potential (7% yield) as well as support for
higher capex spend under government's call.
Despite the recent rally, it is still trading at 9x 2018 P/E/4x EV/EBITDA, at a
significant discount to global E&P peers. Credit Suisse maintained its "outperform" call
on CNOOC, with a target price of HK$17.6. (KL)
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00883 CNOOC
Nominal 
19.680 +0.680 (+3.579%) Others
18/09/2018 17:31
[I-bank focus]CNOOC's outperformance to continue in 4Q - CS
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