Cnooc's H Shares Remain Undervalued — Market Talk

What happened

Morningstar analyst Chokwai Lee says Cnooc’s H shares remain undervalued and offer a 2026 dividend yield above 6%. He cites strong first-nine-month results, cost competitiveness and expected energy supply disruptions into 2027. Morningstar raised its H-share fair-value estimate to HK$33.00 from HK$32.00, while keeping its A-share estimate at 28.00 yuan.

Confirmed

Global impact / market context

The higher H-share estimate reflects Morningstar’s view that the Chinese yuan’s appreciation improves the shares’ assessed value. Strong production and cost control could help Cnooc sustain earnings, while disruptions supporting oil and gas prices may bolster revenue; weaker prices or rising costs would work in the opposite direction.

Analyst inference

The article frames Cnooc’s outlook around oil and gas prices, production and overseas expansion, rather than a change in company policy. Its shares closed at HK$24.52, below Morningstar’s HK$33.00 estimate, but that valuation gap is an analyst assessment, not a guaranteed return.

Analyst inference

What to watch

1. Check subsequent company results for whether production remains in line with expectations and costs stay competitive, since both affect how much revenue becomes profit. Analyst inference
2. Track whether supply disruptions continue into 2027 and keep oil and gas prices elevated; the article presents this as Lee’s expectation, not a certainty. Analyst inference
3. Watch for further changes in Morningstar’s H-share fair-value estimate, which the article says was raised to HK$33.00 from HK$32.00 after yuan appreciation. Confirmed

Evidence

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