CICC: Maintain a "Outperform" rating on CNOOC (00883) with a target price of 24 Hong Kong dollars.

Zhongjin released a research report stating that it maintains a target price of HK$24 for CNOOC (00883) H shares and a "outperform" rating. The H share price is trading in line with expected oil prices of only $60-65 per barrel, still providing a high safety margin. According to the company's strategic outlook, the dividend payout ratio for 2025-2027 is expected to be no less than 45%, a significant increase from the 43.8% payout ratio in 2023. Assuming crude oil prices remain above $50, the company maintaining a 45% dividend rate would result in a minimum dividend value exceeding HK$0.7 per share. Key points from Zhongjin include: Production outlook based on the company's 2025 strategic outlook: 1) Due to the sale of Gulf of Mexico oil and gas assets announced in December 2024, and based on a cautious approach to certain overseas projects, the company has lowered its production targets for 2025/2026 by 20/30 million barrels, with the 2025 target adjusted from 780-800 million barrels to 760-780 million barrels, and the 2026 target lowered from 810-830 million barrels to 780-800 million barrels. 2) Domestic production guidance remains unchanged. After the completion of the seven-year Increase Reserves-to-Produce Action Plan, production is expected to maintain moderate growth during the "15th Five-Year Plan" period, with a projected growth rate of 3-4% for domestic production from 2025-2027. 3) The Stabroek Block in Guyana is expected to have 8 development projects by 2030, with total production expected to increase to 1.3 million barrels per day and capacity approaching 1.7 million barrels per day. The company's capital expenditure remains steady, with a focus on stable oil growth and cost control giving the company stronger resilience to fluctuations. According to the company's strategic outlook, capital expenditure for 2025 will be maintained at RMB 125-135 billion, the same as 2024. The focus of future development will continue to shift towards natural gas, and through technical innovation, the Bohai Sea recovery rate will gradually increase from 35% to 45%.