BIZCHINA / Center
Discoveries boost oil firm stocks
By Hui Ching-hoo (China Daily)
Updated: 2007-06-09 10:31
HONG KONG: Prices of the mainland's three Hong Kong listed oil-related
stocks - China National Offshore Oil Corporation (CNOOC), PetroChina and
Sinopec - surged significantly as a result of the newly discovered oil
fields and the soaring international oil price.
International securities houses and analysts believe the overall net
profit of the three oil giants could reach 240 billion yuan by the end of
the year.
Related readings:
Sinopec, CNOOC join forces to secure natural gas
CNOOC sets up financial panel
PetroChina output climbs
Sinopec prepares record bond issue for Puguang gasfield
CNOOC's share price went through the psychologically important barrier of
HK$8 on Tuesday and peaked at HK$8.4 the next day. The price of
PetroChina picked up from HK$9.95 to HK$10.62 between May 31 and June 6,
while Sinopec stock rose from HK$7 to HK$8 in May and is now getting
close to HK$9.
Ricky Tam, chairman of Hong Kong Institution of Investors, said he
expected CNOOC and PetroChina's prices to rise by a further 10 to 15
percent.
"The prices of the three oil-related stocks stayed pretty flat earlier
because the shares were overlooked by institutional investors. But their
prices have slid to an attractively low level as compared to their
projected earnings," said Tam.
CASH Asset Management Associate Director Patrick Yiu forecast that
PetroChina's share price would exceed HK$11, while Sinopec's would reach
HK$9.
"The international oil price is remaining at a high level, which will
help boost the price of PetroChina," said Yiu.
Securities house CLSA recently adjusted the target price of CNOOC from
HK$8 to HK$9, while the prices of PetroChina and Sinopec are expected to
grow to HK$13 and HK$10.8 respectively.
There had been a great deal of speculation that Sinopec would devote most
of its efforts to developing its natural gas business in Sichuan, at the
expense of its oil exploration business. But the discovery of a new
oilfield in Xinjiang is a positive sign that the company is able to
maintain its status as Asia's largest oil refiner.
An oil analyst from CLSA forecast that Sinopec's crude oil reserves would
increase by 50 percent next year, which would boost the value of the
firm's net assets by 5 percent.
"The production capacity of the new oil field is one of highest on the
mainland," said the analyst.
DBS Vickers analyst Law Wai-yip pointed out: "Oil stocks have long lagged
behind the Hang Seng Index and are set to attract investors."
(China Daily 06/09/2007 page10)
(For more biz stories, please visit Industry Updates)
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