Intrinsic value of CNOOC ADR - CEO

Previous Close

$158.27

  Intrinsic Value

$0.30

stock screener

  Rating & Target

str. sell

-100%

Previous close

$158.27

 
Intrinsic value

$0.30

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CEO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -14.55
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  21,193
  21,515
  22,010
  22,575
  23,210
  23,914
  24,686
  25,527
  26,437
  27,417
  28,470
  29,595
  30,796
  32,075
  33,434
  34,877
  36,405
  38,023
  39,734
  41,542
  43,450
  45,464
  47,588
  49,827
  52,186
  54,671
  57,286
  60,040
  62,937
  65,985
  69,191
Variable operating expenses, $m
 
  9,225
  9,432
  9,668
  9,933
  10,227
  10,550
  10,901
  11,281
  11,690
  12,130
  12,360
  12,862
  13,396
  13,963
  14,566
  15,204
  15,880
  16,594
  17,349
  18,146
  18,988
  19,875
  20,810
  21,795
  22,832
  23,925
  25,075
  26,285
  27,558
  28,897
Fixed operating expenses, $m
 
  12,943
  13,227
  13,518
  13,816
  14,120
  14,430
  14,748
  15,072
  15,404
  15,743
  16,089
  16,443
  16,805
  17,174
  17,552
  17,938
  18,333
  18,736
  19,149
  19,570
  20,000
  20,440
  20,890
  21,350
  21,819
  22,299
  22,790
  23,291
  23,804
  24,328
Total operating expenses, $m
  21,542
  22,168
  22,659
  23,186
  23,749
  24,347
  24,980
  25,649
  26,353
  27,094
  27,873
  28,449
  29,305
  30,201
  31,137
  32,118
  33,142
  34,213
  35,330
  36,498
  37,716
  38,988
  40,315
  41,700
  43,145
  44,651
  46,224
  47,865
  49,576
  51,362
  53,225
Operating income, $m
  -349
  -653
  -649
  -611
  -539
  -433
  -294
  -122
  84
  323
  597
  1,146
  1,492
  1,875
  2,297
  2,759
  3,263
  3,810
  4,403
  5,044
  5,734
  6,476
  7,273
  8,127
  9,042
  10,019
  11,062
  12,175
  13,361
  14,623
  15,967
EBITDA, $m
  9,620
  6,581
  6,746
  6,968
  7,247
  7,581
  7,971
  8,417
  8,918
  9,476
  10,092
  10,768
  11,504
  12,302
  13,166
  14,097
  15,098
  16,171
  17,321
  18,549
  19,860
  21,257
  22,744
  24,326
  26,007
  27,792
  29,686
  31,694
  33,822
  36,075
  38,461
Interest expense (income), $m
  738
  1,043
  1,080
  1,124
  1,174
  1,230
  1,292
  1,360
  1,434
  1,514
  1,600
  1,693
  1,792
  1,898
  2,010
  2,130
  2,257
  2,392
  2,534
  2,685
  2,844
  3,013
  3,190
  3,377
  3,574
  3,782
  4,001
  4,231
  4,474
  4,729
  4,998
Earnings before tax, $m
  -763
  -1,695
  -1,730
  -1,735
  -1,712
  -1,662
  -1,585
  -1,481
  -1,350
  -1,190
  -1,003
  -547
  -300
  -23
  286
  628
  1,005
  1,418
  1,869
  2,359
  2,890
  3,464
  4,083
  4,750
  5,467
  6,237
  7,061
  7,943
  8,887
  9,894
  10,969
Tax expense, $m
  -855
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  77
  170
  271
  383
  505
  637
  780
  935
  1,103
  1,283
  1,476
  1,684
  1,906
  2,145
  2,399
  2,671
  2,962
Net income, $m
  92
  -1,695
  -1,730
  -1,735
  -1,712
  -1,662
  -1,585
  -1,481
  -1,350
  -1,190
  -1,003
  -547
  -300
  -23
  209
  459
  734
  1,035
  1,364
  1,722
  2,109
  2,529
  2,981
  3,468
  3,991
  4,553
  5,155
  5,799
  6,487
  7,223
  8,007

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12,076
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  92,255
  91,165
  93,261
  95,658
  98,349
  101,331
  104,602
  108,165
  112,021
  116,175
  120,634
  125,404
  130,493
  135,912
  141,671
  147,783
  154,259
  161,114
  168,364
  176,024
  184,112
  192,646
  201,646
  211,133
  221,128
  231,655
  242,739
  254,405
  266,682
  279,597
  293,182
Adjusted assets (=assets-cash), $m
  80,179
  91,165
  93,261
  95,658
  98,349
  101,331
  104,602
  108,165
  112,021
  116,175
  120,634
  125,404
  130,493
  135,912
  141,671
  147,783
  154,259
  161,114
  168,364
  176,024
  184,112
  192,646
  201,646
  211,133
  221,128
  231,655
  242,739
  254,405
  266,682
  279,597
  293,182
Revenue / Adjusted assets
  0.264
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
  0.236
Average production assets, $m
  64,461
  69,945
  71,554
  73,392
  75,457
  77,745
  80,255
  82,988
  85,946
  89,134
  92,555
  96,214
  100,119
  104,277
  108,695
  113,384
  118,353
  123,613
  129,175
  135,052
  141,257
  147,805
  154,710
  161,989
  169,657
  177,734
  186,238
  195,189
  204,608
  214,517
  224,940
Working capital, $m
  7,951
  -2,474
  -2,531
  -2,596
  -2,669
  -2,750
  -2,839
  -2,936
  -3,040
  -3,153
  -3,274
  -3,403
  -3,542
  -3,689
  -3,845
  -4,011
  -4,187
  -4,373
  -4,569
  -4,777
  -4,997
  -5,228
  -5,473
  -5,730
  -6,001
  -6,287
  -6,588
  -6,905
  -7,238
  -7,588
  -7,957
Total debt, $m
  21,770
  20,003
  20,811
  21,734
  22,770
  23,917
  25,177
  26,549
  28,033
  29,633
  31,349
  33,185
  35,145
  37,231
  39,449
  41,801
  44,295
  46,934
  49,725
  52,674
  55,788
  59,074
  62,539
  66,191
  70,039
  74,092
  78,360
  82,851
  87,578
  92,550
  97,780
Total liabilities, $m
  36,936
  35,098
  35,906
  36,828
  37,864
  39,012
  40,272
  41,643
  43,128
  44,727
  46,444
  48,280
  50,240
  52,326
  54,543
  56,896
  59,390
  62,029
  64,820
  67,769
  70,883
  74,169
  77,634
  81,286
  85,134
  89,187
  93,454
  97,946
  102,673
  107,645
  112,875
Total equity, $m
  55,318
  56,066
  57,356
  58,830
  60,485
  62,318
  64,330
  66,521
  68,893
  71,448
  74,190
  77,123
  80,253
  83,586
  87,128
  90,886
  94,869
  99,085
  103,544
  108,255
  113,229
  118,477
  124,012
  129,847
  135,994
  142,468
  149,284
  156,459
  164,009
  171,952
  180,307
Total liabilities and equity, $m
  92,254
  91,164
  93,262
  95,658
  98,349
  101,330
  104,602
  108,164
  112,021
  116,175
  120,634
  125,403
  130,493
  135,912
  141,671
  147,782
  154,259
  161,114
  168,364
  176,024
  184,112
  192,646
  201,646
  211,133
  221,128
  231,655
  242,738
  254,405
  266,682
  279,597
  293,182
Debt-to-equity ratio
  0.394
  0.360
  0.360
  0.370
  0.380
  0.380
  0.390
  0.400
  0.410
  0.410
  0.420
  0.430
  0.440
  0.450
  0.450
  0.460
  0.470
  0.470
  0.480
  0.490
  0.490
  0.500
  0.500
  0.510
  0.520
  0.520
  0.520
  0.530
  0.530
  0.540
  0.540
Adjusted equity ratio
  0.575
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615
  0.615

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  92
  -1,695
  -1,730
  -1,735
  -1,712
  -1,662
  -1,585
  -1,481
  -1,350
  -1,190
  -1,003
  -547
  -300
  -23
  209
  459
  734
  1,035
  1,364
  1,722
  2,109
  2,529
  2,981
  3,468
  3,991
  4,553
  5,155
  5,799
  6,487
  7,223
  8,007
Depreciation, amort., depletion, $m
  9,969
  7,234
  7,395
  7,579
  7,785
  8,014
  8,265
  8,538
  8,834
  9,153
  9,495
  9,621
  10,012
  10,428
  10,870
  11,338
  11,835
  12,361
  12,917
  13,505
  14,126
  14,781
  15,471
  16,199
  16,966
  17,773
  18,624
  19,519
  20,461
  21,452
  22,494
Funds from operations, $m
  9,285
  5,539
  5,665
  5,844
  6,073
  6,352
  6,680
  7,057
  7,485
  7,963
  8,492
  9,075
  9,712
  10,405
  11,078
  11,797
  12,569
  13,397
  14,282
  15,227
  16,235
  17,309
  18,452
  19,667
  20,957
  22,326
  23,778
  25,318
  26,948
  28,674
  30,501
Change in working capital, $m
  -1,256
  -49
  -57
  -65
  -73
  -81
  -89
  -97
  -105
  -113
  -121
  -129
  -138
  -147
  -156
  -166
  -176
  -186
  -197
  -208
  -220
  -232
  -244
  -257
  -271
  -286
  -301
  -317
  -333
  -351
  -369
Cash from operations, $m
  10,541
  5,587
  5,722
  5,909
  6,146
  6,433
  6,769
  7,154
  7,589
  8,075
  8,613
  9,204
  9,850
  10,552
  11,235
  11,963
  12,745
  13,583
  14,478
  15,435
  16,455
  17,541
  18,696
  19,924
  21,228
  22,612
  24,079
  25,634
  27,281
  29,025
  30,870
Maintenance CAPEX, $m
  0
  -6,858
  -6,994
  -7,155
  -7,339
  -7,546
  -7,774
  -8,025
  -8,299
  -8,595
  -8,913
  -9,255
  -9,621
  -10,012
  -10,428
  -10,870
  -11,338
  -11,835
  -12,361
  -12,917
  -13,505
  -14,126
  -14,781
  -15,471
  -16,199
  -16,966
  -17,773
  -18,624
  -19,519
  -20,461
  -21,452
New CAPEX, $m
  -7,428
  -1,364
  -1,609
  -1,839
  -2,065
  -2,288
  -2,510
  -2,733
  -2,959
  -3,187
  -3,421
  -3,660
  -3,905
  -4,158
  -4,419
  -4,689
  -4,969
  -5,260
  -5,562
  -5,877
  -6,205
  -6,548
  -6,905
  -7,278
  -7,669
  -8,077
  -8,504
  -8,951
  -9,419
  -9,909
  -10,423
Cash from investing activities, $m
  -4,044
  -8,222
  -8,603
  -8,994
  -9,404
  -9,834
  -10,284
  -10,758
  -11,258
  -11,782
  -12,334
  -12,915
  -13,526
  -14,170
  -14,847
  -15,559
  -16,307
  -17,095
  -17,923
  -18,794
  -19,710
  -20,674
  -21,686
  -22,749
  -23,868
  -25,043
  -26,277
  -27,575
  -28,938
  -30,370
  -31,875
Free cash flow, $m
  6,497
  -2,635
  -2,881
  -3,085
  -3,258
  -3,401
  -3,516
  -3,605
  -3,668
  -3,707
  -3,721
  -3,711
  -3,677
  -3,618
  -3,612
  -3,595
  -3,562
  -3,512
  -3,445
  -3,360
  -3,256
  -3,133
  -2,989
  -2,825
  -2,639
  -2,431
  -2,198
  -1,940
  -1,656
  -1,345
  -1,004
Issuance/(repayment) of debt, $m
  -3,470
  695
  807
  923
  1,036
  1,148
  1,260
  1,372
  1,485
  1,599
  1,717
  1,836
  1,959
  2,086
  2,217
  2,353
  2,493
  2,639
  2,791
  2,949
  3,114
  3,286
  3,465
  3,652
  3,848
  4,053
  4,267
  4,492
  4,726
  4,972
  5,230
Issuance/(repurchase) of shares, $m
  0
  2,705
  3,019
  3,209
  3,367
  3,496
  3,597
  3,672
  3,721
  3,745
  3,745
  3,480
  3,430
  3,356
  3,333
  3,300
  3,249
  3,181
  3,094
  2,989
  2,865
  2,720
  2,554
  2,366
  2,156
  1,922
  1,662
  1,376
  1,063
  720
  347
Cash from financing (excl. dividends), $m  
  -4,208
  3,400
  3,826
  4,132
  4,403
  4,644
  4,857
  5,044
  5,206
  5,344
  5,462
  5,316
  5,389
  5,442
  5,550
  5,653
  5,742
  5,820
  5,885
  5,938
  5,979
  6,006
  6,019
  6,018
  6,004
  5,975
  5,929
  5,868
  5,789
  5,692
  5,577
Total cash flow (excl. dividends), $m
  2,318
  765
  946
  1,047
  1,146
  1,243
  1,341
  1,439
  1,538
  1,638
  1,741
  1,606
  1,713
  1,824
  1,939
  2,057
  2,180
  2,308
  2,440
  2,579
  2,723
  2,873
  3,030
  3,193
  3,365
  3,544
  3,731
  3,927
  4,133
  4,348
  4,573
Retained Cash Flow (-), $m
  531
  -2,705
  -3,019
  -3,209
  -3,367
  -3,496
  -3,597
  -3,672
  -3,721
  -3,745
  -3,745
  -3,480
  -3,430
  -3,356
  -3,542
  -3,758
  -3,983
  -4,216
  -4,459
  -4,711
  -4,974
  -5,248
  -5,535
  -5,834
  -6,147
  -6,474
  -6,817
  -7,175
  -7,550
  -7,943
  -8,355
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,940
  -2,074
  -2,162
  -2,222
  -2,253
  -2,256
  -2,233
  -2,183
  -2,107
  -2,004
  -1,874
  -1,717
  -1,532
  -1,603
  -1,701
  -1,803
  -1,908
  -2,018
  -2,132
  -2,251
  -2,376
  -2,505
  -2,641
  -2,782
  -2,930
  -3,085
  -3,248
  -3,417
  -3,595
  -3,782
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -1,860
  -1,898
  -1,882
  -1,829
  -1,746
  -1,637
  -1,509
  -1,365
  -1,210
  -1,051
  -890
  -733
  -582
  -538
  -499
  -458
  -415
  -372
  -328
  -286
  -246
  -208
  -173
  -142
  -114
  -90
  -70
  -53
  -39
  -28
Current shareholders' claim on cash, %
  100
  99.5
  99.0
  98.4
  97.9
  97.3
  96.7
  96.2
  95.7
  95.1
  94.6
  94.2
  93.8
  93.4
  93.0
  92.7
  92.3
  92.0
  91.8
  91.5
  91.2
  91.0
  90.8
  90.7
  90.5
  90.4
  90.3
  90.2
  90.1
  90.1
  90.1

CNOOC Limited is a Hong Kong-based investment holding company principally engaged in the exploration, production and trading of oil and gas. Its businesses include conventional oil and gas businesses, shale oil and gas businesses, oil sands businesses and other unconventional oil and gas businesses. The Company mainly operates businesses through three segments. The Exploration and Production segment is engaged in the exploration, development and production of crude oil, natural gas and other petroleum products. The Trading segment is engaged in the trading of crude oil, natural gas and other petroleum products. The Corporate segment is engaged in corporate-related businesses. The Company mainly operates businesses in China, Canada, the United Kingdom, Nigeria, Indonesia and Brazil, among others.

FINANCIAL RATIOS  of  CNOOC ADR (CEO)

Valuation Ratios
P/E Ratio 76808.2
Price to Sales 333.4
Price to Book 127.7
Price to Tangible Book
Price to Cash Flow 670.4
Price to Free Cash Flow 2269.9
Growth Rates
Sales Growth Rate -14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.1%
Cap. Spend. - 3 Yr. Gr. Rate -10%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 34.2%
Total Debt to Equity 39.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital 0.1%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 0.2%
Return On Equity - 3 Yr. Avg. 7.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 71.2%
Gross Margin - 3 Yr. Avg. 69.1%
EBITDA Margin 46.9%
EBITDA Margin - 3 Yr. Avg. 51.9%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. 12.7%
Pre-Tax Margin -3.6%
Pre-Tax Margin - 3 Yr. Avg. 12.1%
Net Profit Margin 0.4%
Net Profit Margin - 3 Yr. Avg. 11.4%
Effective Tax Rate 112.1%
Eff/ Tax Rate - 3 Yr. Avg. 40.3%
Payout Ratio 2226.1%

CEO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CEO stock intrinsic value calculation we used $21093 million for the last fiscal year's total revenue generated by CNOOC ADR. The default revenue input number comes from 2016 income statement of CNOOC ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CEO stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CEO is calculated based on our internal credit rating of CNOOC ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CNOOC ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CEO stock the variable cost ratio is equal to 42.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $12664 million in the base year in the intrinsic value calculation for CEO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for CNOOC ADR.

Corporate tax rate of 27% is the nominal tax rate for CNOOC ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CEO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CEO are equal to 325.1%.

Life of production assets of 10 years is the average useful life of capital assets used in CNOOC ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CEO is equal to -11.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $55057 million for CNOOC ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 44647 million for CNOOC ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CNOOC ADR at the current share price and the inputted number of shares is $7,066.3 billion.

RELATED COMPANIES Price Int.Val. Rating
PTR PetroChina ADR 72.10 0.21  str.sell
BP BP ADR 44.54 52.68  buy
XOM Exxon Mobil 81.40 100.36  buy
PSX Phillips 66 110.36 258.77  str.buy

COMPANY NEWS

▶ CNOOC Signs a PSC with Roc Oil and Smart Oil   [Jul-03-18 05:10AM  PR Newswire]
▶ 4 Top-Ranked Oil Stocks to Deliver Strong Profits in 2H18   [Jul-02-18 10:53AM  InvestorPlace]
▶ ExxonMobil (XOM) Plans to Further Expand Singapore Facility   [Jun-27-18 04:20PM  InvestorPlace]
▶ CNOOC Limited (HKG:883): Immense Growth Potential?   [Jun-24-18 11:56PM  Simply Wall St.]
▶ 5 Value Stocks for Market-Beating Returns   [Jun-20-18 01:25PM  InvestorPlace]
▶ New Strong Buy Stocks for June 5th   [Jun-05-18 10:07AM  Zacks]
▶ TechnipFMC Secures Subsea Contract with CNOOC   [May-30-18 08:00PM  Rigzone.com]
▶ New Strong Buy Stocks for May 23rd   [May-23-18 11:02AM  Zacks]
▶ CNOOC Signs PSCs with Husky   [07:02AM  PR Newswire]
▶ CNOOC Limited Announces Changes in Directors   [Apr-27-18 05:51AM  PR Newswire]
▶ Earnings Season Peaks: Global Week Ahead   [Apr-23-18 10:54AM  Zacks]
▶ 3 Strong Oil Picks for a Volatile Stock Market   [Mar-23-18 01:24PM  Zacks]
▶ Which Integrated Energy Stocks Fell This Week?   [Jan-19-18 11:00AM  Market Realist]
▶ A.M. Best Affirms Credit Ratings of ICM Assurance Ltd   [Nov-21-17 02:57PM  Business Wire]
▶ CNOOC Meets 80-Plus Relative Strength Rating Benchmark   [Nov-07-17 03:00AM  Investor's Business Daily]
▶ ETFs with exposure to CNOOC Ltd. : November 6, 2017   [Nov-06-17 11:16AM  Capital Cube]
▶ ETFs with exposure to CNOOC Ltd. : October 16, 2017   [Oct-16-17 09:49AM  Capital Cube]
▶ Which Integrated Energy Stocks Are Rising This Week?   [Oct-12-17 12:06PM  Market Realist]
▶ These Integrated Energy Stocks Are Losing This Week   [Oct-05-17 01:07PM  Market Realist]
Financial statements of CEO
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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