Cnooc Earnings Likely to Remain Resilient

Dow Jones08-27 15:36

0736 GMT - Cnooc's earnings are likely to remain resilient for now, DBS Group Research says in a note. Near-term earnings are likely to remain sensitive to oil-price normalization after exceptionally strong 1H results, while the rise in all-in costs could soften operating leverage, it says. However, Cnooc's cost base remains among the most competitive globally, which provides meaningful downside protection in scenarios of lower oil prices, as did its strong project pipeline, DBS says. Cash generation was another key positive, and its higher dividend translated to 6% to 7% yield, reinforcing Cnooc's appeal as a high-quality oil proxy with visible shareholder returns, it adds. DBS retains its buy rating on the stock with a target price of 30 Hong Kong dollars. Shares were 0.6% higher at HK$25.06.

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