[ET Net News Agency, 16 November 2018] Morgan Stanley lowered its target price for
CNOOC (00883) to HK$15.19 from HK$17.88 and maintained its "overweight" rating.
Since the beginning of October, the Brent price has corrected by 21%, while the Big 3
have outperformed. The research house believes this outperformance has confirmed that the
Big 3's implied oil price is much lower than the spot oil price, and therefore that the
material spot price correction has not introduced a linear negative impact on the stocks'
performance.
Morgan expects CNOOC to continue to outperform among the Big 3 from a cost perspective.
Disclosure of more information on oil reserves shows long-term potential, which Morgan
believes will boost investor confidence.
It added that CNOOC's valuation is attractive considering current oil prices and ROE
versus the historical average of 1.6x P/B. (KL)