报告名称：CNOOC Ltd(00883.HK)We need a bid on oil
报告类型：港股研究
报告日期：2015-08-19
研究机构：德意志银行
股票名称：中海油,中国海洋石油
股票代码：CEO,00883
页数：18
简介：Yang Hua is a big positive
We maintain Hold rating on CNOOC Ltd on the back of soft oil prices and a"lower for longer" mantra. We suspect estimates remain high 2016e. DB hasChina GDP slowing 2015-16e; China's oil demand should also slow. We like theappointment of Mr. YANG Hua as Chairman. Mr. Yang has been the principalarchitect of CNOOC's M&A build. With plenty of cash on-hand, CNOOC needssome cheap acquisitions to dilute some of the more recent missteps.
CNOOC Ltd: to report 1H15 earnings on 26-August
We expect CNOOC Ltd. to report 1H15 eps of Rmb 0.31/ share, on 20.9bn inEBIT and 80.3bn in O&G sales (Figure 1). Production guidance 2015/14 is +10-15%; we are at 12.5%. QHD 32-6 was scheduled on-line 2H14, but showed up1Q15 – an extra boost? We are interested in CNOOC’s 1H15 ASP - the Nexenimpact; production taxes – cut 2H14; exploration costs – halved 2H14 vs.estimates; DDA – managed down 1H14; and asset write offs to come –Nexen?. We suspect Yang Hua will preside over the results meeting: Will the6-10% CAGR production growth reappear? Will we hear about potential M&A?
Investment thesis – the pieces are starting to come together
We need a bid under the price of oil in order to get CNOOC Ltd. moving in theright direction. Enough talk about CNOOC “the exploration company” – Tullowis speculated to be on sale. Yang Hua recently talked to the press about 6-10%CAGR growth – can we make that a formal policy Mr. Yang? We remember theM&A home run – OML-130; and the grand slam – MEG. Nexen and PAE arewater under the bridge – double down. It is time to move things forwardagain.
Valuation and risks
We value CNOOC Ltd from a DCF model. Our WACC is 8.1% with a CoE of10.1% a China Rfr of 3.9% and an Erp of 5.6%. A DB Strategy Group sets ourChina Rfr and Erp. We use a 3% TG rate for CNOOC Ltd. to reflect thecompany’s LT sustainable BOE production growth rate. Risks include: 1) higher/ lower than anticipated oil prices; and 2) the injection of CNOOC Grouprefining, chemical and / or marketing assets into CNOOC Ltd – SOE reform.

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