Core Viewpoint - The stock of China National Offshore Oil Corporation (CNOOC) has reached a new high, reflecting strong market performance and significant net buying activity through the Hong Kong Stock Connect [1] Group 1: Stock Performance - CNOOC's stock rose approximately 3%, reaching HKD 23.08, marking a new listing high, with a cumulative increase of over 16% in the month [1] - The total market capitalization of CNOOC has reached HKD 1.09 trillion [1] Group 2: Trading Activity - On the previous day, the trading volume through the Hong Kong Stock Connect for CNOOC was HKD 12.73 billion, with a net buying amount of HKD 3.33 billion [1] - CNOOC has seen net buying for three consecutive days, with a total net buying amount of HKD 24.10 billion [1] Group 3: Cost Competitiveness - According to Guojin Securities, CNOOC has significantly reduced its oil and gas production costs in recent years, achieving a competitive advantage [1] - The average production cost for CNOOC in 2024 is projected to be USD 29.56 per barrel, which is lower than China National Petroleum Corporation (CNPC) at USD 33.08 per barrel and Sinopec at USD 38.41 per barrel [1] - CNOOC's production costs are comparable to major U.S. shale oil companies, indicating strong international competitiveness [1]

Core Insights - The oil and gas sector is experiencing active performance, with significant stock price increases among key companies, indicating a positive market sentiment [1] - China's largest shale oil production base, Changqing Oilfield, has achieved a cumulative production of over 20 million tons, marking a major milestone in the country's shale revolution [1] - The current oil market faces an oversupply situation, but OPEC+'s decision to slow down production increases is expected to mitigate this risk [1] Industry Summary - As of November 12, 2025, the National Petroleum and Natural Gas Index (399439) rose by 0.31%, with notable increases in stocks such as Shengli Oilfield (10.10%) and PetroChina (6.38%) [1] - The International Energy Agency (IEA) projects a global oil demand increase of 700,000 barrels per day in 2026, while supply is expected to grow by 2.4 million barrels per day, with both OPEC+ and non-OPEC+ contributing equally [1] - The top ten weighted stocks in the National Petroleum and Natural Gas Index account for 65.09% of the index, highlighting the concentration of market influence among major players like China National Petroleum and Sinopec [2]

Core Viewpoint - On November 11, a total of 19 stocks received buy ratings from brokerages, with one stock announcing a target price, indicating a positive sentiment in the market [1] Group 1: Stock Ratings - Among the stocks with buy ratings, China National Offshore Oil Corporation (CNOOC) has the highest target price increase potential, estimated at 13.93% [1] - Out of the 19 stocks, 17 maintained their ratings, while 2 received ratings for the first time [1] Group 2: Industry Breakdown - The sectors with the highest number of stocks receiving buy ratings include Capital Goods (7 stocks), Technology Hardware and Equipment (4 stocks), and Food, Beverage, and Tobacco (2 stocks) [1]

Core Insights - Southbound funds have significantly increased their investment in Hong Kong stocks, with a cumulative net purchase amount exceeding 50 billion HKD since the launch of the Hong Kong Stock Connect program [1][2] Group 1: Investment Trends - As of November 11, southbound funds recorded a net inflow of 44.67 billion HKD, marking the 15th consecutive trading day of net buying [1] - Year-to-date, the net purchase amount by southbound funds has surpassed 1.3 trillion HKD, reaching 1,309.82 billion HKD, setting a new annual record since the program's inception in 2014 [1][2] Group 2: Market Performance - The strong performance of the Hong Kong stock market, with the Hang Seng Index and Hang Seng Tech Index both rising over 30% this year, has positively influenced the continuous net buying by southbound funds [2] - The IPO market in Hong Kong has attracted high-quality new listings, including secondary listings from U.S. and A-share companies, which have expanded the pool of attractive investment targets for southbound funds [2] Group 3: Stock Holdings - Major holdings by southbound funds include Tencent Holdings with a market value of 651.23 billion HKD, Alibaba-W at 344.21 billion HKD, and China Construction Bank at 273.32 billion HKD [2] - In the past month, the top ten net purchases by southbound funds included Xiaomi Group-W, China National Offshore Oil Corporation, and Meituan-W, with net purchase amounts ranging from 8.89 billion HKD to 1.68 billion HKD [3] Group 4: Valuation Insights - Industry experts believe that the current valuation levels of Hong Kong stocks remain attractive, suggesting that the trend of increased investment from southbound funds is likely to continue [4] - The market is seen as having many undervalued stocks with resilient earnings, indicating significant long-term investment value [4]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of 32.88 RMB based on a 12x valuation for 2025 [6]. Core Views - The company has a significant cost advantage in oil and gas production, leading to excellent profitability. The average production cost is projected to be 29.56 USD/barrel in 2024, lower than its peers [3]. - The company's capital expenditure (CAPEX) remains high, supporting stable growth in reserves and production. The CAPEX is expected to reach 18.08 billion USD in 2024, nearly double that of ConocoPhillips [4]. - The company has a valuation advantage compared to international oil and gas companies, with its PV-10 valuation significantly lower than most peers [5]. Summary by Sections 1. Cost Advantages in Oil Production - The company has demonstrated a notable reduction in production costs over recent years, with a projected average production cost of 29.56 USD/barrel in 2024, the lowest among China's "Big Three" oil companies [3][17]. - The primary source of cost advantage is operational costs, which have decreased from 10.44 USD/barrel in 2012 to 7.61 USD/barrel in 2024 [26]. 2. Production Structure and CAPEX - The company has shown rapid and stable growth in oil and gas production, with a projected increase from 889 thousand barrels/day in 2012 to 1930 thousand barrels/day in 2024 [36]. - The CAPEX level is industry-leading, with a projected 18.08 billion USD in 2024, significantly higher than its peers [4][61]. - High CAPEX levels contribute to resource reserves and lifespan advantages, supporting long-term production growth [63]. 3. Valuation Advantages - The report anticipates a continued oversupply in the international oil market, with Brent crude prices expected to fluctuate downwards [68]. - The company's valuation metrics, such as PE and EV/EBITDA, are approximately 20%-50% lower than major international oil companies, indicating a valuation advantage [5].

Investment Rating - The report maintains an "Outperform" rating for the oil and petrochemical industry [7] Core Viewpoints - OPEC+ has unexpectedly increased production, and the U.S. "reciprocal tariffs" are suppressing demand, leading to downward pressure on oil prices. However, the slowdown in U.S. oil and gas production growth may provide fundamental support. The report remains optimistic about leading oil and gas state-owned enterprises with high-quality upstream assets, high dividends, and low valuations. In the mid and downstream sectors, the current market investment strategy is diversified, with a focus on "anti-involution," domestic demand, and emerging industries [4][12] Summary by Sections 1. Oil Price Trends and Upstream Performance - In 2025, OPEC+ announced multiple production increases, which pressured oil prices. The average Brent and WTI oil prices in Q3 2025 were $68.17/barrel and $64.96/barrel, respectively, down 13.40% and 13.78% year-on-year. The leading domestic oil and gas state-owned enterprises have maintained stable performance through continuous reserve increases and cost reductions, which may help offset the pressure from oil prices [9][16] 2. Midstream Refining Sector - The midstream refining sector is under pressure from supply and demand but may benefit from "anti-involution" policies that could improve the supply-demand balance. In Q3 2025, the PX-crude oil price spread averaged 2540 RMB/ton, down 7.96% year-on-year. The profitability of refined oil products remains under pressure, but the "anti-involution" policy may accelerate the elimination of excess capacity, leading to a structural recovery in the midstream refining sector [10][12] 3. Downstream Basic Chemical Products - The basic chemical sector has seen a divergence in performance among sub-sectors, with 17 sub-sectors, including non-metallic materials, civil explosives, and agricultural chemicals, showing revenue and profit growth year-on-year. However, some sectors like soda ash and organic silicon have experienced significant declines. The report suggests that the chemical industry, which has been at a low point for four years, may enter a recovery cycle supported by liquidity easing and "anti-involution" policies [11][12] 4. Investment Recommendations - The report recommends focusing on leading oil and gas state-owned enterprises with high-quality upstream assets and high dividends. It also suggests paying attention to traditional cyclical chemical sectors that may see improvements due to "anti-involution" policies, as well as sectors supported by domestic demand and emerging industries with high growth potential [12]

Core Viewpoint - The oil and gas extraction sector experienced a decline of 0.44% on November 11, with Blue Flame Holdings leading the drop. The Shanghai Composite Index closed at 4002.76, down 0.39%, while the Shenzhen Component Index closed at 13289.0, down 1.03% [1]. Group 1: Market Performance - The oil and gas extraction sector's individual stock performance showed mixed results, with Intercontinental Oil and Gas closing at 2.72, up 0.74%, while Blue Flame Holdings closed at 7.64, down 0.78% [1]. - The sector saw a net outflow of 12.66 million yuan from main funds, while retail funds experienced a net outflow of 2.03 million yuan, and speculative funds had a net inflow of 14.69 million yuan [1]. Group 2: Fund Flow Analysis - China National Offshore Oil Corporation (CNOOC) had a main fund net inflow of 19.95 million yuan, while retail funds saw a net outflow of 42.38 million yuan [2]. - Blue Flame Holdings experienced a main fund net outflow of 7.68 million yuan, with retail funds showing a net inflow of 4.99 million yuan [2]. - Intercontinental Oil and Gas faced a significant main fund net outflow of 18.81 million yuan, while retail funds had a net inflow of 31.66 million yuan [2].

Market Overview - The Hang Seng Index closed at 26,649, up 1.55% for the day and 32.85% year-to-date[3] - The S&P 500 index closed at 6,832, increasing by 1.54% daily and 16.17% year-to-date[3] - The Nasdaq Composite rose by 2.27% to 23,527, with a year-to-date increase of 21.83%[3] Economic Indicators - China's CPI rose by 0.2% month-on-month and turned positive year-on-year with a 0.2% increase, marking the first rise in six months[9] - Core CPI in China increased by 1.2% year-on-year, continuing a six-month upward trend[9] Sector Performance - Major tech stocks in Hong Kong saw gains, with Tencent, Kuaishou, and Alibaba rising over 2%[9] - New consumption stocks performed strongly, with China Duty Free up over 15%[9] - Gold stocks collectively surged, with companies like Chifeng Jilong Gold and China Silver Group rising over 6%[9] U.S. Government Developments - The U.S. government is expected to end its longest shutdown, with a compromise plan passing a key Senate vote[12] - This development has significantly boosted market risk appetite, leading to gains in major U.S. indices[12] Stock Movements - Nvidia surged by 5.8%, Palantir jumped 8.8%, and Tesla rose by 3.7% following positive market sentiment[12] - Chinese concept stocks also saw a rise, with the Nasdaq Golden Dragon China Index up 2.25%[12]

Core Insights - The 41st Abu Dhabi International Petroleum Exhibition recently concluded, focusing on energy transition, smart technology applications, and enhancing industry influence [1] - The event attracted over 2,250 companies and surpassed 200,000 attendees, establishing itself as a significant platform for global energy industry collaboration [1] - The UAE aims to explore a development path that harmonizes economic growth with environmental protection through continuous investment in advanced technology and clean energy [1] Group 1: AI and Technology in Energy - The deep application of artificial intelligence (AI) in the energy sector was a highlight, showcasing its role in optimizing energy systems and enhancing efficiency [1] - The CEO of Abu Dhabi National Oil Company reported that AI has improved production forecasting accuracy to 90%, aiming to become the most AI-integrated energy company globally [1] - A team from Mohammed bin Zayed University of Artificial Intelligence presented autonomous inspection robots and smart cooling systems, emphasizing AI's transition from a tool to a new infrastructure for industry advancement [2] Group 2: Global Participation and Innovations - Chinese companies showcased their innovations, with China National Petroleum demonstrating the Kunlun model, the largest AI system in the energy sector, achieving full-chain intelligent upgrades [2] - China National Offshore Oil Corporation displayed its advanced exploration equipment and intelligent oil fields, highlighting China's leadership in deep-water development and digital transformation [2] - The International Energy Agency noted that the integration of AI with the energy industry is an irreversible trend, enhancing energy allocation and reducing emissions costs [3]

Group 1 - China National Offshore Oil Corporation (CNOOC) experienced a stock price increase of 2.07% on November 10, with a trading volume of 1.44 billion yuan [1] - On the same day, CNOOC had a financing buy-in amount of 111 million yuan and a financing repayment of 108 million yuan, resulting in a net financing buy of 3.16 million yuan [1] - As of November 10, the total margin balance for CNOOC was 1.402 billion yuan, with a financing balance of 1.395 billion yuan, accounting for 1.61% of the circulating market value, which is below the 10% percentile level over 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 China, Canada, the USA, the UK, Nigeria, and Brazil [2] - The company's revenue composition includes 82.73% from oil and gas sales, 14.96% from trading, and 2.31% from other sources [2] - For the period from January to September 2025, CNOOC reported a revenue of 312.5 billion yuan, a year-on-year decrease of 4.15%, and a net profit attributable to shareholders of 101.97 billion yuan, down 12.59% year-on-year [2] Group 3 - CNOOC has distributed a total of 255.995 billion yuan in dividends since its A-share listing, with 179.051 billion yuan distributed over the past three years [3] - As of September 30, 2025, the number of CNOOC shareholders was 216,500, a decrease of 7.02% from the previous period [3] - The top ten circulating shareholders of CNOOC saw a change, with Hong Kong Central Clearing Limited exiting the list [3]