Citi raised the target price of COSL to 11.6 yuan with a rating of "Buy"

Citi published a research report stating that the management of CHINA OILFIELD SERVICES (02883.HK) indicated there are 3 JU units in Saudi Arabia and 2 JU units in Kuwait, clarifying that these five units are currently not causing any operational impact. Due to ongoing geopolitical conflicts, 3 out of 23 drilling equipment units in Iraq have ceased operations. The management also stated that despite the short-term fluctuations caused by geopolitical events, its long-term strategy towards internationalization remains unchanged.

The firm indicated that regarding oil well services, the management expressed confidence that through leveraging its integrated operational advantages and securing more overseas contracts, CHINA OILFIELD SERVICES can enhance the revenue, order volume, and profitability of this business segment. Although CHINA OILFIELD SERVICES continues to face cost pressures, the firm expects that the efforts made by CHINA OILFIELD SERVICES to diversify its customer base and market revenue structure, especially in the oil well services sector, will gradually alleviate this pressure, thereby improving profit margins.

The firm raised its earnings forecasts for the company by 5% and 2% for this year and next year, respectively, and adjusted its target price from HKD 9.5 to HKD 11.6, based on a forecasted price-to-book ratio of 1 times, which is 1 standard deviation above the historical average, with a rating of "Buy."