Morgan Stanley: Lowers the target price for CHINA OILFIELD (02883) to HKD 8, rating "In line with the market."

Morgan Stanley released a research report stating that after CHINA OILFIELD (02883) announced its second-quarter results, the bank lowered its earnings forecast for the company due to the contracted drilling business performing better than expected, while the well services and offshore businesses performed below expectations. The target price has been adjusted from HKD 9.1 to HKD 8, maintaining a "Market Perform" rating. The report noted that China Oilfield Services performance in the first half of 2026 indicates that the operating environment for contracted drilling is modest under high oil price conditions. However, the performance of well services and offshore operations was below expectations, coupled with foreign exchange losses, leading the bank to reduce its 2026 earnings forecast by 5%. Morgan Stanley believes that oil prices may experience adjustments in 2027, which will put pressure on drilling day rates and operating days, resulting in a reduction of the earnings forecast for 2027 and 2028 by 8% and 5%, respectively.