[ET Net News Agency, 1 November 2019] HSBC Global Research raised its target price for
China Oilfield Services (02883) to HK$12.53 from HK$12.38 and maintained its "buy" rating.
The research house said COSL's result is a strong beat. HSBC believes the drilling
market is rising back to pre-2014 levels in terms of activity level, while the recovery in
day rates will follow suit gradually. Management mentioned that well services contributed
to most of the profit increase and that new technology has played an important role in
raising margins.
HSBC believes topline growth is sustainable given rising upstream Capex from CNOOC
(00883) and recovering OFS market globally, helped by COSL's technology improvements and
overseas expansion. HSBC raised margins and rig utilization, as a result, its net income
forecasts increased by 36%/28%/27% in 2019-2021. (KL)