Daiwa Research lifted its target price for Kunlun Energy (00135) to HK$5.7 from HK$5.5 and maintained its "buy" rating.
The research house said Kunlun's share price is still down 32% year-to-date, which is unjustified as its peers saw -5% to +12% share-price changes during the same period.
Kunlun saw an acceleration of sales growth from 15%-plus in 2-month 2020 to 20% in 1Q,
and its 15% growth target has stayed intact despite COVID-19. Daiwa expects the growth in 1H to be a positive surprise for the market.
Daiwa expects the offer for the spin-off of Kunlun's Shaanxi-Beijing Pipeline assets to be announced by 4Q. Even if there is a delay in the asset transfer deal, the announcement is expected to have positive implications on Kunlun.
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