Group 1 - The Hang Seng Index fell by 1.12% on September 4, closing at 25,058.51 points, with a net inflow of 706 million HKD through the southbound trading channel [1] - The total trading volume for the southbound trading on September 4 was 1,470.86 billion HKD, with a net buy of 706 million HKD [1] - In the Shanghai-Hong Kong Stock Connect, the trading volume was 901.45 billion HKD with a net buy of 1.386 billion HKD, while the Shenzhen-Hong Kong Stock Connect had a trading volume of 569.41 billion HKD with a net sell of 680 million HKD [1] Group 2 - In the top ten active stocks for the Shanghai-Hong Kong Stock Connect, Alibaba-W had the highest trading amount of 76.76 billion HKD, followed by SMIC and Tencent with trading amounts of 62.84 billion HKD and 23.72 billion HKD respectively [1] - For net buy and sell statistics, UBTECH had the highest net buy of 57.7 million HKD, while Hua Hong Semiconductor had the highest net sell of 376 million HKD [1] - In the Shenzhen-Hong Kong Stock Connect, Alibaba-W also led with a trading amount of 43.82 billion HKD, followed by SMIC and Tencent with 36.73 billion HKD and 26.07 billion HKD respectively [2] - Xiaomi Group-W recorded the highest net buy of 55.7 million HKD, while SMIC had the highest net sell of 1.279 billion HKD [2]

Market Overview - On September 4, the Hang Seng Index fell by 1.12%, with total southbound trading amounting to HKD 1,470.86 billion, including buy transactions of HKD 738.96 billion and sell transactions of HKD 731.90 billion, resulting in a net buying amount of HKD 7.06 billion [1] Southbound Trading Details - Southbound trading through the Stock Connect (Shenzhen) recorded a total trading amount of HKD 569.41 billion, with buy transactions of HKD 281.30 billion and sell transactions of HKD 288.11 billion, leading to a net selling amount of HKD 6.80 billion [1] - Southbound trading through the Stock Connect (Shanghai) had a total trading amount of HKD 901.45 billion, with buy transactions of HKD 457.66 billion and sell transactions of HKD 443.79 billion, resulting in a net buying amount of HKD 13.86 billion [1] Active Stocks - The most actively traded stock by southbound funds was Alibaba-W, with a total trading amount of HKD 120.58 billion, followed by SMIC and Tencent Holdings with trading amounts of HKD 99.57 billion and HKD 49.79 billion, respectively [1] - In terms of net buying, the top stocks included UBTECH with a net buying amount of HKD 8.28 billion, Xiaomi Group-W with HKD 7.03 billion, and Alibaba-W with HKD 5.50 billion [1] - The stock with the highest net selling was SMIC, with a net selling amount of HKD 11.58 billion, followed by Hua Hong Semiconductor and Kuaishou-W with net selling amounts of HKD 6.88 billion and HKD 5.41 billion, respectively [1] Continuous Net Buying and Selling - Two stocks, Alibaba-W and Yangtze Optical Fibre and Cable, experienced continuous net buying for more than three days, with Alibaba-W having a total net buying amount of HKD 173.78 billion over ten days [2] - The stocks with the highest continuous net selling were SMIC and Hua Hong Semiconductor, with total net selling amounts of HKD 23.06 billion and HKD 21.09 billion, respectively [2]

Group 1 - Significant net purchases were made in companies such as UBTECH Robotics (8.27 billion), Xiaomi Group (7.02 billion), Alibaba (5.5 billion), Meituan (5.26 billion), and China National Offshore Oil Corporation (5.12 billion) [1] - Continuous net buying of Alibaba by southbound funds for 10 consecutive days, totaling 173.7889 billion HKD, while there has been net selling of SMIC for 3 consecutive days, totaling 23.0585 billion HKD [1] Group 2 - UBTECH announced a procurement contract worth 250 million RMB for humanoid robot products and solutions, with delivery expected to start within the year [3] - Morgan Stanley increased its stake in Meituan from 5.98% to 6.61% as of August 29, with an average share price of 101.9697 HKD [3] Group 3 - Huatai Securities maintains its forecast for Brent crude oil prices at 68 USD per barrel and retains a "buy" rating for CNOOC [4] - SMIC plans to acquire the remaining equity of its subsidiary, SMIC North, through the issuance of A-shares to achieve full control [4]

Investment Rating - The investment rating for China National Offshore Oil Corporation (CNOOC) is "Buy" (maintained) [6] Core Views - CNOOC reported a revenue of 207.61 billion yuan for H1 2025, a decrease of 8.4% year-on-year, and a net profit attributable to shareholders of 69.5 billion yuan, down 12.8% year-on-year [4][12] - Despite a decline in oil prices, the company's performance showed resilience, with a smaller drop in net profit compared to the decrease in oil prices [13] - The company has successfully increased production, with total oil and gas output reaching 196 million barrels of oil equivalent in Q2 2025, a year-on-year increase of 7.3% [14] - CNOOC continues to maintain a high dividend policy, proposing a cash dividend of 31.64 billion yuan for H1 2025, resulting in a dividend payout ratio of 45.5% [15] - The company is expected to achieve net profits of 132.3 billion yuan, 136 billion yuan, and 140.1 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 2.78 yuan, 2.86 yuan, and 2.95 yuan [16] Summary by Sections Financial Performance - In H1 2025, CNOOC's revenue was 207.61 billion yuan, down 8.4% year-on-year, while net profit was 69.5 billion yuan, down 12.8% year-on-year [4][12] - Q2 2025 revenue was 100.75 billion yuan, a decrease of 12.6% year-on-year and 5.7% quarter-on-quarter, with net profit at 32.97 billion yuan, down 17.6% year-on-year and 9.8% quarter-on-quarter [12] Production and Cost Management - CNOOC's total oil and gas production in Q2 2025 was 196 million barrels of oil equivalent, up 7.3% year-on-year, with crude oil production at 151 million barrels, up 5.5%, and natural gas production at 263.2 billion cubic feet, up 13.7% [14] - Capital expenditure in Q2 2025 was 29.89 billion yuan, down 12.4% year-on-year, but still at a high level to support business operations [14] Dividend Policy - The company proposed a cash dividend of 31.64 billion yuan for H1 2025, with a dynamic dividend yield of 4.89% for A shares and 6.97% for H shares [15] Earnings Forecast - CNOOC's projected net profits for 2025, 2026, and 2027 are 132.3 billion yuan, 136 billion yuan, and 140.1 billion yuan respectively, with corresponding EPS of 2.78 yuan, 2.86 yuan, and 2.95 yuan [16]

Investment Rating - The report maintains a "Strong Buy" rating for China National Offshore Oil Corporation (CNOOC) [4] Core Views - The report highlights that CNOOC has demonstrated resilience through increased reserves and production despite a significant drop in oil prices, with Brent crude averaging $70.94 per barrel, down 14.58% year-on-year [2][3] - CNOOC's oil production reached 296.1 million barrels, an increase of 4.48% year-on-year, while natural gas production rose by 11.97% to 516.2 million barrels [2] - The company has successfully managed costs, with the average cost per barrel of oil equivalent at $26.94, a decrease of 2.9% year-on-year [2] Financial Performance Summary - For the first half of 2025, CNOOC reported revenue of RMB 207.61 billion, a decline of 8% year-on-year, and a net profit of RMB 69.53 billion, down 12.8% [1] - Oil and gas sales revenue was approximately RMB 171.75 billion, reflecting a decrease of 7.2% year-on-year [2] - The company is projected to maintain stable net profit forecasts for 2025-2027, with estimates of RMB 1344.28 billion, RMB 1370.74 billion, and RMB 1407.40 billion respectively, corresponding to EPS of 2.83, 2.88, and 2.96 [9][10] Exploration and Development - CNOOC has intensified exploration efforts, achieving five new discoveries in Chinese waters and significant breakthroughs in metamorphic rock exploration in the South China Sea [3] - The company has signed oil contracts in Iraq and Kazakhstan, further solidifying its resource base for future development [9] Strategic Initiatives - CNOOC is focusing on green transformation initiatives, including offshore CCUS and gas recovery measures, alongside advancements in its offshore floating wind power projects [9]

Core Insights - The Hong Kong stock market saw a net inflow of 706 million HKD from Northbound trading on September 4, with a net buy of 1.386 billion HKD from the Shanghai Stock Connect and a net sell of 680 million HKD from the Shenzhen Stock Connect [1] Group 1: Stock Performance - The top net bought stocks included UBTECH (09880), Xiaomi Group-W (01810), and Alibaba-W (09988) [1] - The most sold stocks were SMIC (00981), Hua Hong Semiconductor (01347), and Tencent Holdings (00700) [1] Group 2: Detailed Stock Transactions - Alibaba-W had a net buy of 4.042 billion HKD and a sell of 3.633 billion HKD, resulting in a net inflow of 409 million HKD [2] - UBTECH received a net buy of 1.437 billion HKD and a sell of 860 million HKD, leading to a net inflow of 577 million HKD [2] - Xiaomi Group-W had a net buy of 1.057 billion HKD and a sell of 911 million HKD, resulting in a net inflow of 146 million HKD [2] Group 3: Company Announcements - UBTECH announced a procurement contract worth 250 million RMB for humanoid robots, expected to start delivery within the year [6] - Xiaomi reported over 30,000 vehicle deliveries in August and plans to open 32 new stores in September to meet demand [6] - Alibaba's cloud business revenue reached 33.398 billion RMB, with significant increases in capital expenditure and cloud revenue exceeding expectations [7] Group 4: Market Sentiment - SMIC and Hua Hong Semiconductor faced significant net sells of 11.58 billion HKD and 6.88 billion HKD, respectively, amid a positive outlook for the semiconductor industry driven by AI and domestic substitution [9] - Meituan-W and Changfei Optical Cable received net buys of 5.27 billion HKD and 1.06 billion HKD, while Tencent faced a net sell of 3.37 billion HKD [10]

Group 1 - Southbound funds net bought Hong Kong stocks worth 706 million HKD today [1] - Notable net purchases include: UBTECH Robotics at 827 million HKD, Xiaomi Group-W at 702 million HKD, Alibaba-W at 550 million HKD, Meituan-W at 526 million HKD, CNOOC at 512 million HKD, Horizon Robotics-W at 401 million HKD, and Yangtze Optical Fibre and Cable at 105 million HKD [1] - Significant net sales include: SMIC at 1.158 billion HKD, Hua Hong Semiconductor at 688 million HKD, Kuaishou-W at 541 million HKD, and Tencent Holdings at 336 million HKD [1] Group 2 - Southbound funds have net bought Alibaba for 10 consecutive days, totaling 17.37889 billion HKD [1] - Southbound funds have net sold SMIC for 3 consecutive days, totaling 2.30585 billion HKD [1] - Southbound funds have net sold Hua Hong Semiconductor for 3 consecutive days, totaling 2.1089 billion HKD [1]

Investment Rating - The investment rating for China National Offshore Oil Corporation (CNOOC) is "Buy" (maintained) [1] Core Views - The company's performance in H1 2025 met expectations, with production growth offsetting the impact of oil price fluctuations [1] - CNOOC reported a revenue of RMB 207.61 billion in H1 2025, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of RMB 69.53 billion, down 12.79% year-on-year [5] - The company achieved a net production of 384.6 million barrels of oil equivalent in H1 2025, an increase of 6.1% year-on-year, with domestic production rising by 7.6% [5][6] - Brent crude oil futures averaged USD 66.71 per barrel in Q2 2025, a decrease of 21.55% year-on-year, while the company's average realized oil price was USD 69.15 per barrel, down 13.9% year-on-year [6] - CNOOC's cost control measures have strengthened its competitive advantage, with operating costs per barrel decreasing to USD 6.76, down 0.7% year-on-year [6] Financial Performance - CNOOC's revenue for H1 2025 was RMB 207.61 billion, with a net profit of RMB 69.53 billion [5] - The company expects net profits for 2025-2027 to be RMB 140.37 billion, RMB 146.32 billion, and RMB 154.52 billion, respectively, with corresponding P/E ratios of 8.88, 8.52, and 8.07 [9] - Key financial indicators for 2025E include revenue of RMB 420.60 billion, net profit of RMB 140.37 billion, and a gross margin of 54.2% [11] Production and Exploration - CNOOC's net production of oil and gas has steadily increased, with significant contributions from projects like "Deep Sea No. 1" Phase II [5][7] - The company made five new discoveries in the South China Sea and successfully evaluated 18 oil and gas structures in H1 2025 [7][8] - CNOOC's capital expenditure for H1 2025 was approximately RMB 57.6 billion, a decrease of 8.8% year-on-year [8]

Core Viewpoint - Morgan Stanley has raised the target price for CNOOC (00883) to HKD 23 and RMB 30 for A-shares, citing improved medium to long-term earnings per share and free cash flow outlook [1] Group 1: Target Price and Ratings - The H-share rating for CNOOC has been upgraded from "Underweight" to "Overweight," while the A-share rating remains "Overweight" [1] - The upgrade reflects an anticipated increase in oil prices by USD 5 per barrel and recent progress in optimizing natural gas sales by CNOOC [1] Group 2: Performance Comparison - CNOOC's A/H shares have underperformed compared to China Petroleum & Chemical Corporation (00857) A/H shares by 13-22% year-to-date [1] - The report suggests that OPEC's production increase signals demand recovery and healthy global inventory levels rather than chaos or price wars within OPEC [1] Group 3: Dividend Strategy - CNOOC's unexpected willingness to align its dividend yield with that of China Petroleum, which has successfully decoupled from oil prices, may help limit the downside risk for its stock price [1] - Even with potential oil price declines to USD 55 per barrel by Q1 2026, this strategy could provide some support for CNOOC's stock [1]

Core Viewpoint - Morgan Stanley has raised the target price for CNOOC (00883) to HKD 23 and RMB 30 for A-shares, primarily due to improved medium to long-term earnings per share and free cash flow outlook [1] Group 1: Target Price and Ratings - The H-share rating for CNOOC has been upgraded from "Underweight" to "Overweight," while the A-share rating remains "Overweight," reflecting a projected increase in oil prices by USD 5 per barrel [1] - CNOOC's A/H shares have underperformed compared to China Petroleum (00857) A/H shares by 13-22% year-to-date [1] Group 2: Market Signals and Dividend Strategy - The increase in OPEC production is viewed as a signal of demand recovery and healthy global inventory levels, rather than a sign of OPEC disarray or a price war [1] - CNOOC's unexpected willingness to align its dividend yield with that of China Petroleum, which has successfully decoupled from oil prices, may help limit its stock price downside, even if oil prices could drop to USD 55 per barrel by Q1 2026 [1]