CNOOC SHARES HIT 2-WEEK HIGH AFTER HK$56b DIVIDEND PAYOUT
Shareholders get surprise reward as higher oil prices power earnings of state-controlled energy firm
Shares in CNOOC jumped to a two-week high after China’s state-controlled offshore oil and gas explorer handed shareholders an almost HK$56 billion dividend windfall following bumper earnings, while JPMorgan and Credit Suisse raised their stock price targets.
The firm proposed to pay HK$1.18 per share in special dividends to holders of its local and yuan-denominated shares, according to an exchange filing on Thursday.
Earnings jumped by 132 per cent in the first quarter to 34.3 billion yuan (HK$40.7 billion) as crude oil prices surged, it said.
The stock advanced by 3.5 per cent to HK$11.22 yesterday, adding to a 40 per cent rally this year. It soared by 10 per cent to 17.01 yuan in Shanghai, a record high since its April 21 listing following a US$4.4 billion domestic stock offering.
“CNOOC’s dividend yield is now at a record high, which is also relatively higher than its domestic and foreign peers, highlighting the company’s investment value,” Chen Shuxian, an analyst at Cinda Securities, said in a report, which recommended a “buy” on the stock.
The company has 44.6 billion shares outstanding in Hong Kong. It sold 2.6 billion shares, amounting to about 5.5 per cent of its total yuan-denominated shares, to public investors in its Shanghai stock offering.
CNOOC said it achieved a 65 per cent gain in average oil prices last quarter from a year earlier, according to its report card.
The average realised gas price was US$8.35 per thousand cubic feet, representing an increase of 24 per cent in tight market conditions.
The windfall follows the firm’s decision in January to pay out at least 40 per cent of its annual profits from 2022 to 2024 as dividends, or at least 70 HK cents per share.
CNOOC also reiterated its decision to implement share buybacks this year.
Brokers including JPMorgan and Credit Suisse on Thursday raised their price targets for the firm’s Hong Kong-listed shares.
The 12-month target price for the stock now stands at HK$15.12 on average, signalling a 35 per cent upside from current levels, according to Bloomberg data.
Stronger energy prices have boosted earnings of mainland oil companies this quarter, due to supply disruptions caused by Russia’s invasion of Ukraine. Brent crude surged by 29 per cent this year, hitting a decade high in March of almost U$125 a barrel.
Sinopec’s net income jumped by 27 per cent in the first quarter, the mainland oil refiner and fuel producer said on Thursday. Its shares rose by 0.3 per cent to HK$3.89 yesterday. PetroChina, meanwhile, yesterday reported a 41 per cent gain in first-quarter net profit, with its stock adding 0.8 per cent to HK$3.80.
Separately, CNOOC on Thursday announced its chief executive, Xu Keqiang, would step down after three years at the helm. He will be replaced by Zhou Xinhuai, former chairman and general manager of subsidiary Hainan Energy.
The firm also said it had not taken specific actions towards Russian assets that Western energy groups were exiting.
Media reports emerged last week that energy giant Shell was in talks with Chinese oil companies to sell its stake in a major Russia gas project.
The firm said on Thursday it was monitoring the situation but had no plans yet, adding a Russian exit from major oil firms would require Moscow’s approval.
CNOOC’s dividend yield is now at a record high, highlighting the company’s value
CHEN SHUXIAN, ANALYST