Category Archives: Cnooc

Cnooc (CEO) – Analysis 2015-09-26

Cnooc LTD (CEO) has been compounding its book at an unbelievable rate of 17,3% on average per year during the last 10 years. Include last years dividend and you get 24,54% as a total annual return.

What is the value of the business?

Asset value:
With an annual book value growth at 17%, an annual investor requirement at 10%, and a current price to tangible book at 0,79, the remaining upside is 211% motivating a share price of 316 USD/share.

Earnings power value:
5yEPV upside of 81%.
10yEPV upside of 53%.

Disclosure: The author had a long position when this post/analysis was written.

CEO-2015-09-26CEO 2015-09-26

Cnooc (CEO) – Analysis 2015-04-23

Cnooc LTD (CEO) has been compounding its book at an unbelievable rate of 20% on average per year during the last 10 years. Include last years dividend and you get 24,36% as a total annual return.

What is the value of the business?

Asset value:
With an annual book value growth at 20%, a 10% annual investor requirement, and a current price to tangible book at 1,29 the remaining upside is 89% motivating a share price of 319 USD/share.

Earnings power value:
5yEPV upside of 26%.
10y average EPV has a downside of 5%. Return on incremental equity last 10 years is at 10,54% explaining the increase of earnings over time thru good capital allocation.

Disclosure: The author had a long position when this post/analysis was written.

CEO-2015-04-23CEO 2015-04-23

Cnooc (CEO) – Analysis 2015-01-29

Cnooc LTD (CEO) has been compounding its wealth at an unbelievable rate of 19,56% per year the last 10 years. Including last years dividend it is 24,45% as a total yearly return.

What is such a business worth?
It depends on your required yearly return. I require 10% in my calculation.
With that in mind its value could easily double considering you currently can buy a piece of this business at a 5% premium compared to the actual tangible book value per share.

Why is the market not liking the business?
I would say it is mainly connected to the low oil price at the moment.
As far as I can see though the company keeps compounding its money at a decent rate.
Interim report 2014 showed a 7,28% increase of shareholders' equity compared to end of 2013.

Disclosure: The author had a long position when this post/analysis was written.

CEO-2015-01-29CEO 2015-01-29