Bank of China International released a research report stating that it reaffirmed the “buy” rating of CNOOC (00883) and raised the target price from HK$19.95 to HK$21.84. Due to the recent surge in oil prices, CNOOC's profit in the second quarter is likely to be higher. If the typhoon does not have a significant impact, oil and gas production will exceed the upper limit of its target guidelines.
According to the report, CNOOC's net profit for the first quarter increased 24% year-on-year to 39.7 billion yuan, 9% higher than the bank's forecast. This difference is mainly due to lower costs than expected, realized oil prices, and higher production than expected. Since mid-March, Brent crude has stabilized above $85 per barrel, so the company's profit should increase in the second quarter. At the same time, it is believed that as long as Brent crude oil remains at an average level of 81 US dollars per barrel, the bank's profit forecast will have room to rise.