The Zhitong Finance App learned that Jefferies released a research report stating that it covered CNOOC (02883) for the first time, giving it a “buy” rating, with a target price of HK$11.

The bank believes that the market underestimates the durability of the upward cycle of offshore oil and gas activity and continues to regard CNOOC Oil Services as a drilling company, but its profit structure and competitiveness dominated by oil well services are increasing.

The report mentioned that CNOOC's competitive position continues to increase, with industry-leading rig usage rates, demand to support fleet expansion during the “15th Five-Year Plan” period, and its own oil well service capabilities. In terms of international business, the company is expanding from cable logging and cementing to well completion services, improving profit quality and strengthening its position in the global supplier list.

On the Middle East side, the company's revenue from the Middle East accounts for less than 10%. All 5 offshore rigs in the region are operating normally, and the direct impact on profits is limited. Supported by long-term offshore contracts, the bank believes that CNOOC is resilient under both the escalation and easing of the situation in the Middle East.

The bank said that the company's valuation is still lower than that of other offshore drilling companies and the oil service industry, and believes that its enhanced service competitiveness and long-term profit visibility will drive the valuation to be re-valued.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.