Deutsche Bank first assessed the purchase of MI Energy (1555.HK), with a target price of HK$2.51.
According to the bank, MI Energy is the leading independent oil producer in mainland China. The bank said MI Energy is positioned as enhanced oil extraction from oil wells with low permeability.
The bank added that MI Energy operates 3 oil fields in China under three separate product sharing contracts signed with CNPC (0857.HK). Deutsche Bank expects MI Energy's production to grow at a compound annual rate of 16.4% in 2009-13. Coupled with the oil price of more than 90 US dollars per barrel, the cost being less than 8 US dollars per barrel, plus cash mergers and acquisitions, I believe the company's prospects are optimistic.
MI Energy rose 6.44% last Friday to close at HK$2.15.
