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CNOOC Limited (HKG:883): Immense Growth Potential?

In December 2017, CNOOC Limited (HKG:883) announced its latest earnings update, which signalled that the business gained from a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts predict CNOOC’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View out our latest analysis for CNOOC

Analysts’ outlook for this coming year seems positive, with earnings growth more than doubling. However, earnings seem to drop of in the following year arriving at HK$51.74b by 2021.

SEHK:883 Future Profit June 25th 18
SEHK:883 Future Profit June 25th 18

Although it’s informative knowing the growth each year relative to today’s value, it may be more beneficial determining the rate at which the earnings are rising or falling every year, on average. The pro of this method is that we can get a bigger picture of the direction of CNOOC’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 15.54%. This means, we can expect CNOOC will grow its earnings by 15.54% every year for the next few years.

Next Steps:

For CNOOC, there are three fundamental factors you should look at:

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  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  2. Valuation: What is 883 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 883 is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 883? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.