Investors are warming to China National Offshore Oil Corporation (CEO) even though results announced last week were uninspiring.
CNOOC, as it is known, saw 2012 revenue rise 2.8%, operating profit drop 3.8% and net profit sink 9.3%. Higher exploration and tax costs pushed results slightly below expectations, according to a research note by BOCOM International, the brokerage are of China’s Bank of Communications. Production was also nothing to brag about, rising only 5.2% compared to double-digit increases in some past years.
However, BOCOM International upgraded CNOOC from NEUTRAL” to “BUY,” citing prospects for a bump in production and cheap valuation.
“We expect production growth to pick up speed in the latter part of 2013 to 2015 to meet its declared goal of 6-11% production growth,” the securities firm said. The US$15.1-billion acquisition of Canada’s Nexen in February, with its rich deposit of Canadian oil sands, will help boost output.
On the valuation side, CNOOC is trading at 8.6X estimated 2014 PE, according to BOCOM International, compared with an historical average of 10X, leaving an upside of about 16%. End
DAILY FIX
Hong Kong Blue Chips: +60, +0.3, to 22,311, 3-26-13, Hang Seng Index
Chinese Stocks in Hong Kong: -53, -0.5%, to 10,925, 3-26-13, HSCE Index
Shanghai Stocks: -29, -1,25%, to 2,298, 3-26-13, Shanghai Composite Index.
Chinese Stocks in the U.S.: +0.1, 368.1, 3-25-13, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong opened down 43 points and once sank more than 100, but finished with a small gain after a modest rally in the afternoon on light turnover. Local properties led the way; Henderson Land (HLDCY) beat market expectations for profits and rose 5.5%. KGI Research
Quotable: “We believe that HK market will mainly be dominated by the weak sentiment with trading range from 21,700 to 22,500.” Core Pacific Yamaichi. 3=25-13
Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.
For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN DAILY FIX
Hong Kong Blue Chips: +60, +0.3, to 22,311, 3-26-13, Hang Seng Index
Chinese Stocks in Hong Kong: -53, -0.5%, to 10,925, 3-26-13, HSCE Index
Shanghai Stocks: -29, -1,25%, to 2,298, 3-26-13, Shanghai Composite Index.
Chinese Stocks in the U.S.: +0.1, 368.1, 3-25-13, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong opened down 43 points and once sank more than 100, but finished with a small gain after a modest rally in the afternoon on light turnover. Local properties led the way; Henderson Land (HLDCY) beat market expectations for profits and rose 5.5%. KGI Research
Quotable: “We believe that HK market will mainly be dominated by the weak sentiment with trading range from 21,700 to 22,500.” Core Pacific Yamaichi. 3=25-13
Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.
For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN
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