CNOOC announced its 2024 three-quarter report. In the first three quarters of this year, the company achieved operating income of 326.024 billion yuan, a year-on-year increase of 6.26%; net profit attributable to shareholders of the parent company was 116.659 billion yuan (equivalent to 2.45 yuan per share), an increase of 19.47% over the previous year.

Net profit to mother remained above 30 billion yuan in a single quarter. Since the first quarter of 2022, the company's net profit in a single quarter has basically remained above 30 billion yuan, thus driving the company's overall profit to remain high. Profit remained high in a single quarter. In addition to oil price factors, the increase in oil and gas production and the decline in production costs were also important reasons.

Overcome the adverse effects of falling oil prices and continue to achieve profit growth. In the third quarter of this year, the average price of Brent crude oil was 78.71 US dollars/barrel, down 8.40% year on year, putting some pressure on the profits of the oil and gas extraction business. However, by reducing costs and increasing production, the company continued to achieve a year-on-year increase in net profit.

Oil and gas production increased. In the third quarter, CNOOC achieved oil and gas equivalent production of 179.5 million barrels, an increase of 7.04% over the previous year. Among them, petroleum liquid production was 139.1 million barrels, up 7.58% year on year; natural gas production was 235.5 billion cubic feet, up 5.28% year on year.

Profit forecasting and investment ratings. We expect the company's EPS to be 2.97, 3.00, 3.08 HKD/3.27, 3.30, 3.39 in 2024-2026, and 15.68 HKD/17.25 for BPS in 2024. Referring to the valuation level of comparable companies, they were given 1.4 times PB in 2024, corresponding to a reasonable value of 21.95 yuan/HK$24.19 (corresponding to 7.4 times PE in 2024), and given an investment rating of “superior to the market”.

Risk warning: Large fluctuations in oil and gas prices have a great impact on the company's profits.