PDF《中国海洋石油有限公司 （00883.HK）》

24 projects under construction,

140 exploration wells to be drilled, and 40.2thousand km of 2D and 3D seismic data to be acquired, CNOOC is planning to spend a record US$12-14bn in capex spending during FY14. 70% of will be allocated to development spending to ensure that the company can maintain its RRR target above 100%. Valuation We believe the market has overreacted to the less-than-impressive production guidance for FY13 and has forgotten about the accretive benefits of the Nexen acquisition. Maintain target price and '

Buy'

recommendation. Financials RMB mn

2010 2011 2012E 2013E 2014E Revenue 183,053 240,944 217,016 221,150 225,364 Growth(%) 74% 32% -10% 2% 2% Net profit 54,410 70,255 67,717 69,381 70,703 Growth(%) 85% 29% -4% 2% 2% EPS(yuan) 1.22 1.57 1.52 1.55 1.58 DPS(yuan) 0.32 0.32 0.32 0.33 0.33 P/E(X) 10.7 8.3 8.6 8.4 8.2 P/B(X) 3.3 2.7 2.4 2.3 2.1 ROE(%) 25% 27% 23% 22% 21% Source: Company data, CMS(HK) estimates Buy (prior:Buy ) TP: HK$ 18.30 Current price:HK$16.00 China Merchants Securities (HK) Michael Yuk (852)

31896123 [email protected]

5 Feb

2013 Key data HSI Index 23,685.01 HSCEI Index 12,156.58 S/O(mn) 44,646.30 S/O (HK)(mn) 44,646.30 Mkt cap (HK) (mn) 702,732.88 BVPS(HKD) 6.37 Major share holder Holding (%) China National Offsho 64.41% Free float 35.55% Industry Oil &

Gas Share performance % 1m 6m 12m Absolute return (9.2) 2.6 (6.1) Relative return (9.1) (15.9) (18.4) Source:Bloomberg Related research Backloaded production growth for 2013. Maintain '

Buy'

Company Report Despite hitting a soft-patch during 1H13, CNOOC'

s oil &

gas production has successfully bottomed and is on the road to recovery. Medium-long term production growth looks promising. The most exciting project during

2013 will be the Liwan 3-1, which is the first deepwater gas field offshore China and the fourth largest field offshore China. Suizhong 36-1 Phase II adjustment, with four new platforms and

83 new wells coming online, will also boost production towards year-end. Management may review production guidance during 3Q13, with positive upward revision expected. Figure 1: New production for FY13 Area Projects during 1H13 Projects during 2H13 Projects during Year End Western South China Sea Weizhou 6-12 Weishou 12-8W Eastern South China Sea Wenchang 8-3E Wenchang 19-1N Lufeng 7-2 Liuhua 19-5 Liwan 3-1 East China Sea Lishui 36-1 Bohai Qikou 18-1 adjustment Suizhong 36-1 phase II adjustment Sources: The Company and CMS(HK) Figure 2: CNOOC quarterly production growth for FY13 Sources: The Company and CMS(HK) We believe the market has overreacted to the less-than-impressive production guidance for FY13, which is based on organic growth only, and has forgotten about the accretive benefits of the Nexen acquisition, which is expected to be Valuation Company Report completed by March 31, 2013. We do not adjust our estimates as we believe the Nexen acquisition will increase CNOOC'

s overall oil and gas production during FY13. We maintain our target price of HK$18.30/share based FY13E earnings estimate of RMB1.55/share and continue to apply a mid-cycle earnings multiple of 9.5X forward earnings. Maintain '

Buy'

. Figure 3: CNOOC 12month P/E band Sources: CMS(HK) Company Report Figure 4: Peer Analysis Company Stock Code Share price (LC$) Market cap (HK$m) Operating margin (%) Net margin (%) ROAA (%) ROAE (%) Industry Peers CNOOC Ltd. 883.HK 16.00 714,341 36.7 29.2 16.2 23.7 PetroChina Co. Ltd. 857.HK 11.10 2,117,502 9.2 6.6 6.7 12.8 Sinopec 386.HK 9.37 771,411 4.3 3.0 5.0 12.1 Average 16.8 12.9 9.3 16.2 International Oil Majors ExxonMobil Co. XOM 89.97 3,183,854 12.5 10.0 13.5 27.5 BP PLC BP 44.52 1,108,638 9.2 6.8 6.0 15.6 Chevron Co. CVX 115.15 1,768,367 15.7 11.8 11.2 19.0 Royal Dutch Shell PLC RDSA.LN 2,250.00 145,256 8.0 5.7 7.5 14.9 ENI Spa ENI.IM 18.49 67,378 15.9 6.3 5.2 13.6 TOTAL SA FP.FP 40.16 95,299 14.6 7.4 6.4 15.4 Average 12.7 8.0 8.3 17.6 Company Free cash flow yield % Div.- payout ratio (%) Div. yield (%) P/B (X) FY1 P/E (X) FY2 P/E (X) 2-yr forward EPS CAGR (%) Chinese Oil Majors CNOOC Ltd. N/A 27.4 2.7 2.0 8.8 9.1 (3.6) PetroChina Co. Ltd. (5.3) 45.0 3.5 1.5 13.0 11.3 4.9 Sinopec (2.9) 35.5 3.9 1.4 10.9 8.8 1.9 Average (4.1) 36.0 3.4 1.6 10.9 9.7 1.0 International Oil Majors ExxonMobil Co. 4.9 22.5 2.4 2.5 11.4 10.8 (7.4) BP PLC N/A 16.9 4.4 N/A 8.3 8.3 N/A Chevron Co. 3.2 26.2 3.0 1.7 9.5 9.3 (3.1) Royal Dutch Shell PLC 5.6 40.8 4.8 1.2 8.3 8.1 1.1 ENI Spa 3.6 52.8 5.7 1.3 9.2 9.0 3.2 TOTAL SA (0.1) 43.9 5.7 1.2 7.4 7.6 (2.6) Average 3.5 33.8 4.3 1.6 9.0 8.8 (1.8) Source: CMS(HK) Please see important notice on the last page.