CNOOC Limited (80883 – Research Report), the Energy sector company, was revisited by a Wall Street analyst on May 2. Analyst Pei Hwa Ho from DBS reiterated a Buy rating on the stock and has a HK$20.50 price target.
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Pei Hwa Ho’s rating is based on several compelling factors that highlight CNOOC Limited’s strong position in the market. Despite a year-over-year decline in net profit due to lower oil prices and higher taxes, CNOOC has managed to offset these challenges with a notable increase in net output and a reduction in all-in costs. The company’s superior cost management, with industry-low breakeven costs, supports the Buy rating, even as the price target has been slightly adjusted.
Furthermore, CNOOC’s strategic focus on growth and sustainability enhances its investment appeal. The company is committed to expanding its production and investing in clean energy, which aligns with its ESG initiatives. Additionally, the attractive dividend yield and the company’s commitment to maintaining a high payout ratio further bolster investor confidence. While oil price volatility remains a risk, the stock’s current valuation is considered attractive, suggesting potential for recovery supported by favorable market conditions and strategic initiatives.