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<Research>CCBI Lifts TPs of CNOOC and PETROCHINA, Downgrades SINOPEC to Neutral
Recommend 50 Positive 73 Negative 49 |
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CCBI wrote in a report that oil prices have been adjusting recently, but oil stocks have performed well, with the share prices of large Hong Kong-listed oil stocks rising by 6% on average in April. SINOPEC CORP (00386.HK) was the biggest gainer with an 8% rise, while CNOOC (00883.HK) and PETROCHINA (00857.HK) elevated 6% and 3% respectively. The report noted that the outlook for crude oil prices is optimistic, and CCBI remained bullish on a recovery in global demand and expected supply risks to persist. The broker forecasted Brent crude oil prices to rise 7%, 2% and 2% to US$88, US$90 and US$92 per barrel respectively in 2024/25/26. The forecasts are 6%, 13% and 15% higher than the consensus predictions. Compared with its forecast in October last year, the broker lowered its Brent oil price estimates for 2024 and 2025 by 6% and 8% respectively, mainly in view of the US Fed's delay in raising interest rates and the slow recovery of mainland demand in 1Q24. According to CCBI, SINOPEC is likely to continue to be dragged down by its downstream business, in contrast to CNOOC and PETROCHINA which are benefiting from oil and gas production growth and effective cost control measures. Therefore, the broker stayed bullish on CNOOC and expected its earnings growth to outperform its competitors in the coming years on the back of strong oil and gas production. CCBI maintained an Outperform rating on CNOOC and added its target price from HK$21.3 to HK$22, as well as elevating its earnings forecast. CCBI also raised its net profit forecasts for PETROCHINA by 18% and 25% for FY24 and FY25 respectively, reflecting the earnings beat in 1Q24. The broker hiked its target price from HK$6.4 to HK$8.3 and reiterated its Outperform rating. Meanwhile, given SINOPEC's lower-than-expected 1Q results, conservative guidance on oil and gas production for FY24, and concerns over margin squeeze in downstream oil products and chemicals, the broker lowered its FY24 and FY25 net profit forecasts by 12% and 10% respectively. CCBI downgraded its rating from Outperform to Neutral, as well as cutting its target price to HK$5 from HK$5.5. AAStocks Financial News |
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