20141128-法国巴黎银行-CHINA_OIL_GAS_SERVICES_46页_1mb

报告摘要

Oil Price War and Sector Analysis Summary

Core Content

This report discusses the impact of OPEC's decision not to cut production, leading to a significant decline in oil prices, and evaluates the implications for Chinese oil and oil services companies. The analysis highlights the vulnerability of these companies to lower oil prices, as well as the challenges they face in terms of demand, competition, and valuation models.

Main Points

OPEC Production Decision: On 27 November 2014, OPEC decided not to cut production, rolling over the ceiling of 30mb/d. This decision was seen as a move to pressure high-cost non-OPEC producers, particularly in the US.
Oil Price Decline: Brent prices fell by USD5/b, bringing the total decline since mid-2014 to USD40/b, the most severe drop since the financial crisis.
Fiscal Impacts: At current oil prices, only UAE, Qatar, and Kuwait are expected to achieve fiscal breakeven, indicating severe fiscal pressure on other major oil producers.
Supply and Demand Outlook: IHS Cera estimates that the market will be oversupplied by 1.3mb/d in 2015, while the IEA suggests supply and demand will remain in balance, neither view offering much support for oil prices.
Brent Price Assumptions: The report lowers Brent price assumptions to USD80/b for 2015 and USD84/b for 2016, based on the forward curve.

Key Companies and Ratings

Company	BBG Code	Rating	Share Price (HKD)	Target Price (HKD)	Upside/Downside (%)
PetroChina	857 HK	HOLD	8.41	8.50	+1.1%
Sinopec	386 HK	HOLD	6.35	6.00	-6%
CNOOC Ltd	883 HK	REDUCE	11.34	8.50	-25%
COSL	2883 HK	HOLD	13.66	14.50	+6.1%
SPT	1251 HK	HOLD	2.00	2.00	0%
Anton	3337 HK	REDUCE	2.03	1.30	-36%
Petro-King	2178 HK	REDUCE	1.65	1.10	-33.3%
Hilong	1623 HK	HOLD	2.34	2.30	-1.7%
Honghua Group	196 HK	HOLD	1.23	1.30	+5.7%

Earnings Estimate Cuts

China Oil Companies: Earnings estimates for 2015 were cut by 26-37% due to lower oil price assumptions. If the 2015 Brent price is assumed at USD72/b, the cuts would be even more severe, reaching 26-59%.
Oil Services Companies: Earnings estimates for 2015 were cut by 9-64% due to weaker orders and lower margin projections.

Valuation Adjustments

Valuation Method: The report shifts from the previous EV/CE model to a P/B multiple method due to the depressed sector earnings.
New Target Prices:
- PetroChina: HKD8.50 (from HKD10.80), based on a lower DCF-based valuation of the E&P division.
- SPT: HKD2.00 (from HKD3.80), based on 1.2x 2015E P/B.
- COSL: HKD14.50 (from HKD17.50), based on 1.1x 2015E P/B.
- Hilong: HKD2.30 (from HKD3.90), based on 1.0x 2015E P/B.
- Anton: HKD1.30 (from HKD1.60), based on 1.0x 2015E P/B.
- Petro-King: HKD1.10 (from HKD1.30), based on 1.0x 2015E P/B.
- Honghua: HKD1.30 (from HKD1.60), based on 0.7x 2015E P/B.

Key Risks and Catalysts

Risks:
- PetroChina: Fluctuations in crude prices.
- Sinopec: Fluctuations in crude prices.
- CNOOC: Unexpected rebound in oil prices.
- COSL: Progress on contract renewals.
- SPT: Further weakened domestic orders.
- Anton: Better Iraq operations.
- Petro-King: Better Iraq/Venezuela operations.
- Hilong: Further margin squeeze.
- Honghua: Delay in delivery of semi-sub orders.
Catalysts: A quick rebound in oil prices could positively impact the market, while continued price weakness could lead to further declines.

Conclusion

The report concludes that the outlook for the oil sector has deteriorated significantly due to the prolonged period of low oil prices and the associated challenges for both oil and oil services companies. The ratings and target prices have been adjusted accordingly to reflect the new market conditions and valuation models.

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