[ET Net News Agency, 22 February 2021] HSBC Global Research lifted its target price for
China Oilfield Services (COSL) (02883) to HK$9.17 from HK$7.15 but downgraded its rating
to "hold" from "buy".
The research house said COSL's shares are up 59% year-to-date, without an obvious
improvement to operating fundamentals. HSBC believes southbound investment flows have
increased, boosting the H-share price.
COSL on 5 February released its 2021 business strategy and development plan. Domestic
and international orders point to stable YoY workloads, but with limited pricing power.
Thus, the company's estimated cash flow is sufficient to fund operations and investment.
HSBC cut its earnings forecasts by 1%/3%/7% in 2020-22 to reflect limited potential
increases in rig rates in 2021-22 and lower well services profits. (KL)