Glonghui, April 26 | Goldman Sachs released a report saying that CNOOC's net profit for the first quarter increased by 24% year-on-year, while oil prices fell by about 0.5% year-on-year during the same period. It is believed that the positive performance was mainly due to production growth exceeding company guidelines during the period, higher oil sales prices than expected, and cost increases less than expected. The bank pointed out that CNOOC's free cash flow for the first quarter has reached 40% of the full-year forecast, while capital expenditure is 21% of the full-year guideline, which is at a high historical level. It is expected that production and capital expenditure guidelines will remain unchanged throughout the year. Although CNOOC's stock price has risen, Goldman Sachs pointed out that compared with its peers, its valuation level is still low. Currently, it predicts free cash flow returns of 9% and 13% for this year and next two years, and dividend returns of 7% each. Maintaining a “buy” rating, the target price is HK$22.