CNOOC (601808): The business operation is limited by the impact of the epidemic; after taking into account, it presents good investment opportunities

CNOOC (601808): The business operation is limited by the impact of the epidemic; after taking into account, it presents good investment opportunities

Recent situation of the company CNOOC A / H’s year-on-year continuous changes in international oil prices and the impact of domestic epidemics have accounted for 21% / 9% since January 7, respectively. However, we believe that the company’s basic business, especially the income side, has remained basically unaffected, and fundamentals have not been affected.Changes have occurred, and recent changes may present good investment opportunities, and the A / H shares continue to outperform the industry rating.

Comments first follow the market and lower oil prices.

In the past month, CNOOC A / H shares 深圳桑拿网 have changed from 21% to 9% from January 7th, mainly due to the drag of the market and oil prices (Brent oil prices accounted for 20%), providing good investment opportunities.

The income side has basically no effect, and the fundamentals remain unchanged.

We don’t expect the company’s daily operations to be affected by the domestic epidemic situation. Since its main operating sites are at sea, it can be carried out according to Party A’s operating arrangements.

However, we do not rule out the possibility that some employees’ shifts are currently changed, but we still believe that this has a very limited impact on changes in the company’s cost structure.

All in all, we believe that the impact of this epidemic on the company, whether it is from the income side or the cost side, is quite limited.

Increasing 成都桑拿网 reserves and production continued to advance, and the long-term investment logic remained unchanged.

We believe that the gradual advancement of domestic reserves and production strategies continues, and this round of policy-driven upstream exploration and development capital expenditure cycles is not very relevant to oil prices.

Moreover, CNOOC’s cost is well controlled, and its full cost is properly controlled. The full cost of around 30 US dollars / barrel still has economic effects under the current oil price.

Therefore, we maintain our previous judgments. It is expected that the growth trend of CNOOC ‘s capital expenditure growth in the next 3-4 years is high. CNOOC ‘s capital expenditure is expected to exceed 1,000 trillion in FY20, 1200 trillion in FY22, and reach a front end of about 140 billion in FY24The advance of the business cycle in 2012-14 is favorable for CNOOC.

The announcement of the first quarter of the year of 20th may become the next catalyst.

We expect the company’s FY19 performance to be around 25 million, mainly taking into account factors such as cost tailing at the end of 4Q19. 4Q19 has recovered from the previous month, and the market has already widely expected.

In addition, given the low base of the company’s 1Q19 performance, we expect the company’s 1Q20 performance to generate growth or become a short-term catalyst.

Estimates suggest maintaining earnings forecasts with an A / H target price of 24.

0 yuan / 18.

0 placement (corresponding to 30 times / 20 times FY20 price-earnings ratio, 49% / 59% upside) remains unchanged.

Maintain Outperform rating on both markets.

A / H shares are currently trading at 20.

3 times / 12.

2 times FY20 price-earnings ratio.

Risk Oil prices fluctuated rapidly, and new orders and orders performed less than expected.