CNOOC completed

CNOOC closes a chapter on the Chinese privatization program with the completion of its $1.26 billion IPO.

Jackie Horne

February 22, 2001

Bookrunners Bank of China International, Credit Suisse First Boston and Merrill Lynch have been praised for successfully managing to walk a tightrope between an investment community scarred by the trading performance of recent jumbo Chinese offerings and a company, whose standalone credentials place it among the finest in its sector.

Analysts all agree that CNOOC's long-term fundamentals make its HK$6.01 ($0.77) IPO price a strong buy. On an EV/EBITDA basis, the main ratio used to determine fair value, the exploration and production company (E&P) is felt to have come at a much smaller premium than its supporters argue it deserves. Priced at 3.5 times 2001 earnings, national counterparts Petrochina and Sinopec are trading at respective levels of 3.1 and 3.2 times, according to figures supplied by the leads.

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