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%. Morningstar raised its fair-value estimate for the H shares to HK$33.00 from HK$32.00, citing the yuan’s appreciation; the shares closed at HK$24.52.

Confirmed

Global impact / market context

A higher fair-value estimate suggests Morningstar sees more potential value in the H shares, while the cited dividend yield could add to investor returns. The assessment also ties Cnooc’s outlook to energy prices, since elevated oil and gas prices support its business revenue.

Analyst inference

Lee attributes Cnooc’s strong first nine-month results to high oil prices, while saying production met expectations and the company remains cost competitive. He expects energy supply disruptions to continue into 2027, which he says should support elevated prices in the near term.

Confirmed

What to watch

1. Whether energy supply disruptions continue into 2027, as Lee expects; a change could alter the oil and gas price support described for Cnooc. Analyst inference
2. Whether Cnooc maintains its disciplined overseas expansion and cost competitiveness, which may shape the costs and returns of its growth strategy. Analyst inference
3. Whether Morningstar changes its H-share fair-value estimate again, particularly if the yuan’s value or Cnooc’s operating results change. Analyst inference

Evidence

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