[ET Net News Agency, 17 March 2021] Morgan Stanley lifted its target price for Sinopec
Oilfield Service (01033) to HK$0.88 from HK$0.81 to reflect a higher long-term oil price
but downgraded its rating from "overweight" to "equal-weight", given less upside in the
near term.
During 2020, despite the impact from Covid-19 and low oil prices, Sinopec SSC's workload
was largely stable. However, the company's earnings underperformed leading industry peers,
given its high-cost profile and heavy debt burden, the research house said.
Although the share price has rallied by 25% year-to-date, compared with a 34% rise in
the oil price, Morgan believes this is largely due to sentiment and is not supported by
any material improvement in the company's fundamentals.
It cut its EPS forecast for 2020-22 by 6-34% to reflect a slower-than-expected earnings
recovery. (KL)