Investment Rating - The report maintains a "Buy" rating for both A and H shares of China National Offshore Oil Corporation (CNOOC) [1] Core Views - CNOOC's oil and gas production is rapidly increasing, with significant cost reduction and efficiency improvement [1] - The company achieved a revenue of 207.6 billion yuan in H1 2025, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of 69.5 billion yuan, down 12.79% year-on-year [7] - The report highlights the successful launch of projects contributing to production growth, with actual oil and gas net production reaching 385 million barrels of oil equivalent in H1 2025, a 6% increase year-on-year [7] - CNOOC's capital expenditure decreased by 9% year-on-year to 57.6 billion yuan in H1 2025, with a projected budget of 125 to 135 billion yuan for the year [7] - The company has maintained excellent cost control, with a major oil cost of 26.94 USD per barrel in H1 2025, a decrease of 2.9% year-on-year [7] - CNOOC plans to distribute a dividend of 0.73 HKD per share, maintaining a payout ratio of 45.5% [7] - The report adjusts profit forecasts for 2025-2027, with net profits projected at 141.2 billion yuan, 144.7 billion yuan, and 149.7 billion yuan respectively [7] Financial Summary - For 2025, the total revenue is projected to be 409.9 billion yuan, with a year-on-year decrease of 2.53% [1] - The net profit attributable to shareholders is expected to be 141.2 billion yuan, reflecting a growth of 2.36% [1] - The earnings per share (EPS) is forecasted to be 2.97 yuan for 2025, with a price-to-earnings (P/E) ratio of 8.73 for A shares and 6.23 for H shares [1][7] - The company aims for oil and gas production targets of 760-780 million barrels of oil equivalent in 2025, increasing to 810-830 million barrels by 2027 [7]

Core Viewpoint - The company is the largest offshore oil and gas producer in China and one of the largest independent oil and gas exploration and production groups globally, focusing on exploration, development, production, and sales of crude oil and natural gas [9]. Financial Performance - The company's revenue and net profit growth rates have shown significant fluctuations over the years, with a revenue growth rate of 71.56% and a net profit growth rate of 58.4% in 2021 [12]. - In the first half of 2025, the company's revenue reached 2,500 million, with a notable increase in revenue from exploration and production activities [13][15]. - The average return on equity (ROE) for the first half of 2025 was 9.13%, a decrease of 2.34 percentage points compared to the same period last year [19]. Asset and Liability Changes - As of the first half of 2025, the company's cash and cash equivalents increased by 45.03%, while fixed assets rose by 2.73% [24]. - Other payables (including interest and dividends) surged by 265.72%, indicating a significant increase in liabilities [27]. - The company's current ratio was reported at 2.36, and the quick ratio was 2.32, reflecting a strong liquidity position [30]. Historical Trends - The company's net profit margin has varied over the years, with a notable comparison to the A-share industry average and median [18]. - The asset-liability ratio has shown a downward trend, with the latest figure reported at 29.05% for 2025 [29].

Core Viewpoint - The "Big Three" oil companies in China (PetroChina, Sinopec, and CNOOC) reported a decline in performance for the first half of 2025, primarily due to a decrease in international oil prices, yet they maintained high dividend payouts totaling over 82.5 billion yuan [1][2]. Financial Performance - The average price of Brent crude oil fell by 14.5% year-on-year to $71.87 per barrel, while West Texas Intermediate (WTI) dropped by 14.4% to $67.60 per barrel [2]. - For the first half of 2025, PetroChina, Sinopec, and CNOOC reported revenues of 1.45 trillion yuan, 1.41 trillion yuan, and 207.6 billion yuan, respectively, reflecting declines of 6.74%, 10.60%, and 8.45% year-on-year [2]. - The net profits attributable to shareholders for the same period were 83.99 billion yuan for PetroChina, 21.48 billion yuan for Sinopec, and 69.53 billion yuan for CNOOC, showing year-on-year decreases of 5.42%, 39.83%, and 12.79% respectively [2]. Market Dynamics - The decline in profits is attributed to falling international oil prices, decreased demand for gasoline and diesel, and low margins in the chemical market [2]. - The domestic refined oil prices followed the international trends, with the National Development and Reform Commission adjusting gasoline and diesel prices down by 330 yuan/ton and 315 yuan/ton respectively [3]. Strategic Responses - CNOOC emphasized its focus on increasing reserves and production, technological innovation, and green transformation to navigate market volatility [3]. - PetroChina highlighted its efforts in production management, quality improvement, and transitioning to new energy sources, reporting a 1.7 times increase in wind and solar power generation compared to the previous year [4]. Transition to New Energy - The "Big Three" are increasingly focusing on transitioning to new energy to counter the pressures from traditional oil and gas markets [4]. - Sinopec reported a 17% year-on-year increase in non-oil business profits, with significant growth in its charging service revenue [4]. Dividend Distribution - Despite the performance decline, all three companies announced substantial dividend payouts. PetroChina plans to distribute 40.27 billion yuan, with a payout ratio of 47.9% [5]. - Sinopec intends to distribute 10.67 billion yuan, while CNOOC plans to pay a dividend of 0.73 HKD per share [6].

Group 1 - The stock price of China National Offshore Oil Corporation (CNOOC) increased by 2.00% on September 2, reaching 26.46 CNY per share, with a trading volume of 1.22 billion CNY and a market capitalization of 1,257.643 billion CNY [1] - Year-to-date, CNOOC's stock price has decreased by 8.46%, but it has seen a slight increase of 1.77% over the last five trading days, 1.65% over the last 20 days, and 2.22% over the last 60 days [2] - CNOOC's main business involves the exploration, production, and sales of crude oil and natural gas, with revenue composition being 84.57% from oil and gas sales, 13.11% from trading, and 2.32% from other businesses [2] Group 2 - As of June 30, CNOOC reported a total revenue of 207.608 billion CNY for the first half of 2025, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of 69.533 billion CNY, down 12.79% year-on-year [3] - CNOOC has distributed a total of 224.335 billion CNY in dividends since its A-share listing, with 176.364 billion CNY distributed over the past three years [4] - As of June 30, 2025, CNOOC had 232,800 shareholders, a decrease of 0.25% from the previous period, with an average of 12,936 circulating shares per shareholder, an increase of 5.50% [3]

Core Viewpoint - China National Offshore Oil Corporation (CNOOC) has shown a mixed performance in terms of financing activities and stock performance, with significant trading volumes and fluctuations in net buying and selling [1][2]. Financing Activities - On September 1, CNOOC had a financing buy-in amount of 95.35 million yuan, while the financing repayment was 125 million yuan, resulting in a net financing buy of -29.51 million yuan [1]. - The total financing and securities balance for CNOOC reached 1.829 billion yuan as of September 1, with the financing balance accounting for 2.34% of the circulating market value, indicating a high level compared to the past year [1]. - CNOOC's securities lending activities included a repayment of 5,000 shares and a sale of 39,400 shares, with a selling amount of 1.022 million yuan based on the closing price [1]. Company Overview - CNOOC, established on August 20, 1999, and listed on April 21, 2022, primarily engages in the exploration, production, and sales of crude oil and natural gas [2]. - The company operates in three segments: exploration and production, trading, and other business activities, with oil and gas sales contributing 84.57% to total revenue [2]. - As of June 30, CNOOC reported a revenue of 207.608 billion yuan for the first half of 2025, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of 69.533 billion yuan, down 12.79% year-on-year [2]. Dividend Distribution - Since its A-share listing, CNOOC has distributed a total of 224.335 billion yuan in dividends, with 176.364 billion yuan distributed over the past three years [3]. Shareholder Structure - As of June 30, 2025, CNOOC had 232,800 shareholders, a slight decrease of 0.25% from the previous period, with an average of 12,936 circulating shares per shareholder, an increase of 5.50% [2][3]. - The top ten circulating shareholders include Hong Kong Central Clearing Limited, which holds 5.94779 million shares as a new shareholder [3].

Core Insights - China's offshore heavy oil thermal recovery has surpassed 5 million tons since its exploration began in 2008, making it the first country to achieve large-scale offshore heavy oil thermal recovery development globally [1] - Heavy oil, characterized by high viscosity and density, poses significant extraction challenges, yet it constitutes approximately 70% of the world's remaining oil resources, making it a key focus for oil-producing countries [1] - China is one of the world's top four heavy oil producers, with proven reserves of high-viscosity heavy oil exceeding 600 million tons offshore, representing about 20% of the country's total proven heavy oil reserves, indicating substantial development potential [1] Industry Developments - The primary method for developing high-viscosity heavy oil is thermal recovery, which involves injecting high-temperature and high-pressure steam into the reservoir to reduce viscosity, making it easier to extract [1] - Offshore operations face challenges such as limited working space and high costs compared to onshore oil fields, complicating the large-scale development of heavy oil thermal recovery [1] - To efficiently utilize heavy oil reserves, China National Offshore Oil Corporation (CNOOC) has proposed the "fewer wells, higher production" thermal recovery development theory to address issues like low thermal recovery capacity and significant heat loss, thereby improving heavy oil recovery rates [1] - Current offshore heavy oil thermal recovery is primarily concentrated in the Bohai Sea, with several key thermal recovery oil fields established, including Nanpu 35-2, Luda 21-2, and Jinzhou 23-2, with production expected to reach 2 million tons this year [1]

Core Viewpoint - The oil industry is experiencing an unprecedented performance downturn in 2025, with major Chinese oil companies and international oil giants reporting significant declines in revenue and net profit, raising concerns about the potential peak of the oil era [1][3][23]. Group 1: Performance Decline of Chinese Oil Companies - China National Petroleum Corporation (CNPC) reported revenue of 1.45 trillion yuan, a year-on-year decrease of 6.68%, and net profit of 839.93 billion yuan, down 5.21%, marking the first dual decline since 2021 [1]. - China Petroleum & Chemical Corporation (Sinopec) achieved revenue of 1.41 trillion yuan, down 10.6%, and net profit of 214.83 billion yuan, a decline of 39.8%, the largest drop since 2021 [1]. - China National Offshore Oil Corporation (CNOOC) reported revenue of 207.61 billion yuan, down 8%, and net profit of 695.33 billion yuan, a decrease of 13%, the worst half-year report since 2021 [1]. Group 2: Performance Decline of International Oil Giants - Major international oil companies also faced significant profit declines: Saudi Aramco's net profit fell by 10%, ExxonMobil by 15%, TotalEnergies by 21%, Shell by 29.8%, and Chevron and BP by over 30% [1][2]. Group 3: Factors Contributing to Performance Decline - The primary reason for the performance decline is the downward trend in international crude oil prices, influenced by trade wars and OPEC+ production increases [4][7]. - In the first half of 2025, the average crude oil price for CNPC and CNOOC was $66.21 per barrel and $69.15 per barrel, respectively, down 14.5% and 13.9% year-on-year [7]. - The domestic refined oil market experienced ten price adjustments, resulting in a decrease of 330 yuan/ton for gasoline and 315 yuan/ton for diesel [6]. Group 4: Industry Transformation and Peak Oil Demand - The oil demand in China is showing signs of peaking earlier than expected, driven by the rapid adoption of electric vehicles, which accounted for 44.3% of total car sales in the first half of 2025 [12]. - Policies aimed at promoting green innovation in the refining industry are expected to accelerate the peak oil process, with a cap on crude oil processing capacity set at 1 billion tons by 2025 [15]. - The International Energy Agency (IEA) predicts that China's oil demand will peak in 2026 at approximately 16.5 million barrels per day, influenced by electrification and structural economic changes [21]. Group 5: Strategic Responses from Chinese Oil Companies - In response to the changing landscape, the three major Chinese oil companies are accelerating their transition to renewable energy, with CNPC planning to balance oil, gas, and renewable energy by 2035 [23]. - Sinopec aims for carbon neutrality around 2050 and is focusing on integrating hydrogen with oil and gas operations [23]. - CNOOC is developing offshore renewable energy technologies and aims to create a circular economy model in marine energy [23].

Core Viewpoint - The Hong Kong stock market is showing strength, particularly in cyclical sectors such as consumer discretionary, metals, pharmaceuticals, coal, and steel, with the launch of the Tianhong Central Enterprise Dividend ETF (159281) on September 2, 2023, which aims to track high dividend-yielding central enterprises [1] Group 1: ETF and Index Details - The Tianhong Central Enterprise Dividend ETF has an annual management fee of 0.5% and a custody fee of 0.1% [1] - The ETF closely tracks the Hong Kong Stock Connect Central Enterprise Dividend Index (931233), which selects stable dividend-paying companies controlled by central enterprises within the Stock Connect framework [1] - As of the end of Q2 2025, the index's sector distribution includes banking, transportation, non-bank financials, telecommunications, and oil and petrochemicals, with the top ten constituents accounting for 31% of the index [1] Group 2: Performance Metrics - The index has a dividend yield exceeding 7% as of the end of Q2 2025 [3] - Historical performance shows that the index achieved an annualized return of 14.27% over the past five years, with an annualized volatility of 22.02% as of July 9, 2025 [3] Group 3: Investment Outlook - The investment value of Hong Kong central enterprise dividends is expected to continue benefiting from inflows of southbound capital, structural market conditions, and a focus on investor returns through improved dividend policies [4] - The Hong Kong market is anticipated to rise further in the second half of the year, driven by three positive factors, including the AI cycle benefiting technology stocks and the low-interest-rate environment enhancing dividend attractiveness [4]

Group 1 - China National Offshore Oil Corporation (CNOOC) experienced a slight decline of 0.35% in stock price on August 29, with a trading volume of 2.228 billion yuan [1] - On the same day, CNOOC had a financing buy-in amount of 184 million yuan and a financing repayment of 144 million yuan, resulting in a net financing buy of approximately 39.65 million yuan [1] - As of August 29, the total financing and securities lending balance for CNOOC was 1.858 billion yuan, with the financing balance accounting for 2.40% of the circulating market value, indicating a high level compared to the past year [1] Group 2 - CNOOC, established on August 20, 1999, primarily engages in the exploration, production, and sales of crude oil and natural gas, with operations in various countries including China, Canada, the USA, the UK, Nigeria, and Brazil [2] - The company's revenue composition shows that oil and gas sales account for 84.57%, trade for 13.11%, and other businesses for 2.32% [2] - For the first half of 2025, CNOOC reported a revenue of 207.608 billion yuan, a year-on-year decrease of 8.45%, and a net profit attributable to shareholders of 69.533 billion yuan, down 12.79% year-on-year [2] Group 3 - Since its A-share listing, CNOOC has distributed a total of 224.335 billion yuan in dividends, with 176.364 billion yuan distributed over the past three years [3] - As of June 30, 2025, CNOOC had 232,800 shareholders, a decrease of 0.25% from the previous period, with an average of 12,936 circulating shares per shareholder, an increase of 5.50% [2][3] - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited is the newest shareholder, holding 5.94779 million shares [3]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but demonstrated resilience in profitability despite falling oil prices [1][2]. Financial Performance - In the first half of 2025, the company achieved operating revenue of 207.6 billion yuan, a year-on-year decrease of 8.45% - The net profit attributable to shareholders was 69.5 billion yuan, down 12.79% year-on-year - The net profit excluding non-recurring items was 69.4 billion yuan, a decrease of 12% year-on-year - In Q2 2025, operating revenue was 100.8 billion yuan, a decline of 12.62% year-on-year, with net profit of 33 billion yuan, down 17.6% year-on-year [1]. Production and Pricing - The company's net oil and gas production reached a historical high of 384.6 million barrels of oil equivalent in the first half of 2025, an increase of 6.1% year-on-year - Domestic production was 266.5 million barrels of oil equivalent, up 7.6% year-on-year, driven by projects like "Deep Sea No. 1" Phase II - International production was 118.1 million barrels of oil equivalent, a rise of 2.8% year-on-year, mainly from projects in Brazil and Guyana - The average Brent crude oil price was $70.81 per barrel, down 15.09% year-on-year, while the company's realized oil price was $69.15 per barrel, a decrease of 13.91% [2]. Cost Management - The company has implemented cost control throughout exploration, development, and production processes, establishing a competitive cost advantage in the industry - The main cost per barrel of oil was $26.94, a decrease of 2.92% year-on-year, with other taxes (excluding income tax) down 10.98% due to falling international oil prices [3]. Future Outlook - The company anticipates that oil prices will stabilize at a mid-to-high level, with production targets for net oil and gas output set at 760-780 million, 780-800 million, and 810-830 million barrels of oil equivalent for 2025-2027, respectively - Expected year-on-year growth rates for these targets are 5.9%, 2.6%, and 3.8% [3]. Shareholder Returns - The company emphasizes shareholder returns, maintaining a dividend payout twice a year, with a total dividend of 1.40 HKD per share in 2024, representing a payout ratio of approximately 44.7% - For the first half of 2025, an interim dividend of 0.73 HKD per share is proposed, with a payout ratio of 45.5% - The company plans to repurchase shares worth 2-4 billion RMB within the next 12 months and expects EPS of 2.83, 2.93, and 2.98 yuan for 2025-2027, corresponding to PE ratios of 9.09X, 8.75X, and 8.61X [4].