With the increase in seasonal exploration and production capital expenditures at the end of the year, the profit growth in the second half of the year can drive the revaluation of china oilfield services.
According to Zhitong Finance APP, Lyon released a research report stating that it has initiated coverage on China Oilfield Services (02883) with an initial "outperform the market" rating and a target price of 9 Hong Kong dollars for its H shares. The bank believes that China Oilfield Services currently has a P/B ratio of 0.7 times, valuing it reasonably. With the rise in seasonal exploration and production capital expenditures at the end of the year, the profit growth in the second half of the year can drive revaluation of the company's worth.
The report states that China Oilfield Services is a sister company of CNOOC (00883), providing offshore drilling and oilfield services. China Oilfield Services is moving towards its three-year production target by 2026, with a compound annual growth rate of 6% from this year to 2026. It is expected that China Oilfield Services' offshore business in China will continue to be strong, and its overseas business will benefit from the robust demand for deep-sea drilling, an area that is increasingly attracting attention from major oil companies worldwide.
