18-10-2017

Oil stocks are the main beneficiaries of rising price of crude oil. Among different industry players, CNOOC Limited will benefit most as its profitability is most sensitive to changes in oil prices. The price of crude oil is increasing gradually, with the support of oil cut deal of OPEC, the slowdown in US crude oil production growth and the improvement in global economy. CNOOC per se has a better management capacity compared with other industry players in terms of cost control, which brought surprise to investors on its interim result. In addition, the market expects that oil sector has a greater opportunity to undergo Public-Private Ownership Reform, aiming to lower companies’ operation cost and improve operational efficiency, and eventually boosting corporate profits. It is expected that CNOOC will become the main beneficiaries. With intact fundamental as well as attractive valuation, which has a P/B of 0.9x and dividend yield of 4.5%, it is recommended for long-term investment.

General Disclosure and Disclaimer:
Frontier Capital Management Limited (“FCM”) is a subsidiary of Frontier Financial Group (“the Group”). It is regulated and licensed by Hong Kong Securities and Futures Commission, also is an Exchange Participant of The Stock Exchange of Hong Kong Limited, and a Direct Clearing Participant of Hong Kong Securities Clearing Company Limited.
The information contained in this website is for informational purposes, and does not intend to recommend, invite, offer, or confirm of any terms. Based on the sources that are believed to be reliable, FCM attempts to provide accurate, complete, and up-to-date information and analysis. However, FCM cannot represent or guarantee its accuracy, completeness, or timeliness of such source and information. Before making any decision on your investment, you should weigh the provided information carefully and bear any responsibility and risk incurred. And you should seek for advice of a professional financial advisor.
The Group, its subsidiaries and connected persons may have held some of the equity securities mentioned in this article, but the Group and FCM will place your financial interests ahead of their own.