Intrinsic value of CNOOC ADR - CEO

Previous Close

$167.39

  Intrinsic Value

$30,250

stock screener

  Rating & Target

str. buy

+999%

Previous close

$167.39

 
Intrinsic value

$30,250

 
Up/down potential

+999%

 
Rating

str. buy

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

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  33.60
  30.74
  28.17
  25.85
  23.76
  21.89
  20.20
  18.68
  17.31
  16.08
  14.97
  13.97
  13.08
  12.27
  11.54
  10.89
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
Revenue, $m
  37,639
  49,209
  63,069
  79,372
  98,234
  119,736
  143,921
  170,805
  200,373
  232,594
  267,418
  304,790
  344,649
  386,936
  431,599
  478,594
  527,887
  579,460
  633,307
  689,440
  747,885
  808,683
  871,893
  937,589
  1,005,858
  1,076,803
  1,150,541
  1,227,202
  1,306,931
  1,389,883
Variable operating expenses, $m
  7,564
  9,819
  12,521
  15,699
  19,375
  23,566
  28,280
  33,520
  39,283
  45,564
  52,124
  59,408
  67,177
  75,420
  84,125
  93,285
  102,893
  112,945
  123,441
  134,382
  145,774
  157,624
  169,945
  182,750
  196,057
  209,885
  224,257
  239,200
  254,740
  270,909
Fixed operating expenses, $m
  17,915
  18,309
  18,712
  19,123
  19,544
  19,974
  20,413
  20,862
  21,321
  21,790
  22,270
  22,760
  23,260
  23,772
  24,295
  24,830
  25,376
  25,934
  26,505
  27,088
  27,684
  28,293
  28,915
  29,551
  30,202
  30,866
  31,545
  32,239
  32,948
  33,673
Total operating expenses, $m
  25,479
  28,128
  31,233
  34,822
  38,919
  43,540
  48,693
  54,382
  60,604
  67,354
  74,394
  82,168
  90,437
  99,192
  108,420
  118,115
  128,269
  138,879
  149,946
  161,470
  173,458
  185,917
  198,860
  212,301
  226,259
  240,751
  255,802
  271,439
  287,688
  304,582
Operating income, $m
  12,160
  21,081
  31,836
  44,550
  59,315
  76,196
  95,228
  116,422
  139,768
  165,239
  193,024
  222,622
  254,211
  287,744
  323,179
  360,479
  399,618
  440,580
  483,362
  527,970
  574,427
  622,766
  673,033
  725,287
  779,600
  836,052
  894,738
  955,763
  1,019,242
  1,085,301
EBITDA, $m
  29,016
  43,049
  59,928
  79,844
  102,943
  129,323
  159,040
  192,111
  228,521
  268,227
  311,170
  357,278
  406,477
  458,693
  513,859
  571,922
  632,839
  696,586
  763,157
  832,565
  904,843
  980,042
  1,058,236
  1,139,514
  1,223,988
  1,311,783
  1,403,047
  1,497,941
  1,596,644
  1,699,351
Interest expense (income), $m
  738
  1,079
  1,694
  2,444
  3,341
  4,397
  5,619
  7,011
  8,578
  10,319
  12,234
  14,321
  16,576
  18,997
  21,578
  24,317
  27,210
  30,254
  33,446
  36,787
  40,274
  43,910
  47,695
  51,633
  55,727
  59,982
  64,403
  68,998
  73,774
  78,739
  83,903
Earnings before tax, $m
  11,080
  19,386
  29,393
  41,209
  54,918
  70,577
  88,216
  107,844
  129,449
  153,005
  178,704
  206,046
  235,214
  266,166
  298,862
  333,269
  369,364
  407,134
  446,575
  487,696
  530,517
  575,071
  621,400
  669,561
  719,618
  771,649
  825,740
  881,989
  940,503
  1,001,398
Tax expense, $m
  2,992
  5,234
  7,936
  11,126
  14,828
  19,056
  23,818
  29,118
  34,951
  41,311
  48,250
  55,632
  63,508
  71,865
  80,693
  89,983
  99,728
  109,926
  120,575
  131,678
  143,240
  155,269
  167,778
  180,781
  194,297
  208,345
  222,950
  238,137
  253,936
  270,378
Net income, $m
  8,089
  14,152
  21,457
  30,082
  40,090
  51,521
  64,398
  78,726
  94,498
  111,694
  130,454
  150,413
  171,706
  194,301
  218,169
  243,286
  269,636
  297,208
  326,000
  356,018
  387,278
  419,802
  453,622
  488,779
  525,321
  563,304
  602,790
  643,852
  686,567
  731,021

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  113,712
  148,667
  190,540
  239,794
  296,780
  361,739
  434,807
  516,026
  605,357
  702,700
  807,910
  920,815
  1,041,234
  1,168,991
  1,303,925
  1,445,902
  1,594,825
  1,750,634
  1,913,316
  2,082,901
  2,259,471
  2,443,152
  2,634,119
  2,832,595
  3,038,845
  3,253,180
  3,475,954
  3,707,560
  3,948,432
  4,199,042
Adjusted assets (=assets-cash), $m
  113,712
  148,667
  190,540
  239,794
  296,780
  361,739
  434,807
  516,026
  605,357
  702,700
  807,910
  920,815
  1,041,234
  1,168,991
  1,303,925
  1,445,902
  1,594,825
  1,750,634
  1,913,316
  2,082,901
  2,259,471
  2,443,152
  2,634,119
  2,832,595
  3,038,845
  3,253,180
  3,475,954
  3,707,560
  3,948,432
  4,199,042
Revenue / Adjusted assets
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
Average production assets, $m
  83,144
  108,702
  139,319
  175,332
  216,999
  264,496
  317,922
  377,307
  442,624
  513,799
  590,726
  673,280
  761,329
  854,742
  953,402
  1,057,213
  1,166,103
  1,280,027
  1,398,976
  1,522,974
  1,652,077
  1,786,381
  1,926,013
  2,071,134
  2,221,940
  2,378,657
  2,541,545
  2,710,890
  2,887,010
  3,070,252
Working capital, $m
  -2,221
  -2,903
  -3,721
  -4,683
  -5,796
  -7,064
  -8,491
  -10,077
  -11,822
  -13,723
  -15,778
  -17,983
  -20,334
  -22,829
  -25,464
  -28,237
  -31,145
  -34,188
  -37,365
  -40,677
  -44,125
  -47,712
  -51,442
  -55,318
  -59,346
  -63,531
  -67,882
  -72,405
  -77,109
  -82,003
Total debt, $m
  31,374
  45,251
  61,875
  81,428
  104,052
  129,840
  158,848
  191,092
  226,557
  265,202
  306,970
  351,794
  399,600
  450,319
  503,888
  560,253
  619,376
  681,232
  745,816
  813,142
  883,240
  956,161
  1,031,975
  1,110,770
  1,192,652
  1,277,743
  1,366,184
  1,458,131
  1,553,757
  1,653,250
Total liabilities, $m
  45,144
  59,021
  75,645
  95,198
  117,821
  143,610
  172,618
  204,862
  240,327
  278,972
  320,740
  365,563
  413,370
  464,089
  517,658
  574,023
  633,146
  695,002
  759,586
  826,912
  897,010
  969,931
  1,045,745
  1,124,540
  1,206,421
  1,291,513
  1,379,954
  1,471,901
  1,567,527
  1,667,020
Total equity, $m
  68,568
  89,646
  114,896
  144,596
  178,958
  218,128
  262,189
  311,164
  365,030
  423,728
  487,169
  555,251
  627,864
  704,901
  786,267
  871,879
  961,680
  1,055,632
  1,153,729
  1,255,989
  1,362,461
  1,473,220
  1,588,374
  1,708,055
  1,832,424
  1,961,668
  2,096,000
  2,235,659
  2,380,904
  2,532,022
Total liabilities and equity, $m
  113,712
  148,667
  190,541
  239,794
  296,779
  361,738
  434,807
  516,026
  605,357
  702,700
  807,909
  920,814
  1,041,234
  1,168,990
  1,303,925
  1,445,902
  1,594,826
  1,750,634
  1,913,315
  2,082,901
  2,259,471
  2,443,151
  2,634,119
  2,832,595
  3,038,845
  3,253,181
  3,475,954
  3,707,560
  3,948,431
  4,199,042
Debt-to-equity ratio
  0.460
  0.500
  0.540
  0.560
  0.580
  0.600
  0.610
  0.610
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.640
  0.640
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
  0.650
Adjusted equity ratio
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603
  0.603

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,089
  14,152
  21,457
  30,082
  40,090
  51,521
  64,398
  78,726
  94,498
  111,694
  130,454
  150,413
  171,706
  194,301
  218,169
  243,286
  269,636
  297,208
  326,000
  356,018
  387,278
  419,802
  453,622
  488,779
  525,321
  563,304
  602,790
  643,852
  686,567
  731,021
Depreciation, amort., depletion, $m
  16,857
  21,968
  28,092
  35,294
  43,628
  53,127
  63,812
  75,689
  88,753
  102,988
  118,145
  134,656
  152,266
  170,948
  190,680
  211,443
  233,221
  256,005
  279,795
  304,595
  330,415
  357,276
  385,203
  414,227
  444,388
  475,731
  508,309
  542,178
  577,402
  614,050
Funds from operations, $m
  24,945
  36,120
  49,548
  65,377
  83,718
  104,648
  128,210
  154,416
  183,251
  214,682
  248,599
  285,069
  323,972
  365,249
  408,849
  454,729
  502,857
  553,213
  605,795
  660,613
  717,693
  777,078
  838,825
  903,006
  969,709
  1,039,035
  1,111,099
  1,186,030
  1,263,969
  1,345,071
Change in working capital, $m
  -558
  -683
  -818
  -962
  -1,113
  -1,269
  -1,427
  -1,586
  -1,745
  -1,901
  -2,055
  -2,205
  -2,352
  -2,495
  -2,635
  -2,773
  -2,908
  -3,043
  -3,177
  -3,312
  -3,448
  -3,587
  -3,729
  -3,876
  -4,028
  -4,186
  -4,351
  -4,523
  -4,704
  -4,894
Cash from operations, $m
  25,504
  36,803
  50,366
  66,339
  84,831
  105,917
  129,637
  156,002
  184,995
  216,583
  250,654
  287,274
  326,324
  367,744
  411,485
  457,502
  505,765
  556,256
  608,972
  663,925
  721,141
  780,665
  842,554
  906,882
  973,737
  1,043,221
  1,115,450
  1,190,553
  1,268,673
  1,349,965
Maintenance CAPEX, $m
  -12,444
  -16,629
  -21,740
  -27,864
  -35,066
  -43,400
  -52,899
  -63,584
  -75,461
  -88,525
  -102,760
  -118,145
  -134,656
  -152,266
  -170,948
  -190,680
  -211,443
  -233,221
  -256,005
  -279,795
  -304,595
  -330,415
  -357,276
  -385,203
  -414,227
  -444,388
  -475,731
  -508,309
  -542,178
  -577,402
New CAPEX, $m
  -20,923
  -25,558
  -30,617
  -36,013
  -41,667
  -47,497
  -53,426
  -59,386
  -65,317
  -71,175
  -76,927
  -82,554
  -88,048
  -93,413
  -98,661
  -103,811
  -108,889
  -113,924
  -118,949
  -123,997
  -129,104
  -134,304
  -139,631
  -145,121
  -150,806
  -156,718
  -162,887
  -169,345
  -176,120
  -183,241
Cash from investing activities, $m
  -33,367
  -42,187
  -52,357
  -63,877
  -76,733
  -90,897
  -106,325
  -122,970
  -140,778
  -159,700
  -179,687
  -200,699
  -222,704
  -245,679
  -269,609
  -294,491
  -320,332
  -347,145
  -374,954
  -403,792
  -433,699
  -464,719
  -496,907
  -530,324
  -565,033
  -601,106
  -638,618
  -677,654
  -718,298
  -760,643
Free cash flow, $m
  -7,863
  -5,384
  -1,991
  2,462
  8,097
  15,020
  23,312
  33,032
  44,217
  56,883
  70,967
  86,575
  103,619
  122,066
  141,875
  163,010
  185,433
  209,111
  234,018
  260,132
  287,443
  315,946
  345,647
  376,558
  408,704
  442,115
  476,831
  512,899
  550,375
  589,322
Issuance/(repayment) of debt, $m
  11,384
  13,877
  16,624
  19,554
  22,623
  25,789
  29,008
  32,244
  35,464
  38,645
  41,768
  44,823
  47,807
  50,719
  53,569
  56,365
  59,122
  61,856
  64,584
  67,325
  70,098
  72,921
  75,814
  78,795
  81,881
  85,091
  88,441
  91,947
  95,626
  99,492
Issuance/(repurchase) of shares, $m
  9,228
  6,926
  3,793
  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 from financing (excl. dividends), $m  
  20,612
  20,803
  20,417
  19,554
  22,623
  25,789
  29,008
  32,244
  35,464
  38,645
  41,768
  44,823
  47,807
  50,719
  53,569
  56,365
  59,122
  61,856
  64,584
  67,325
  70,098
  72,921
  75,814
  78,795
  81,881
  85,091
  88,441
  91,947
  95,626
  99,492
Total cash flow (excl. dividends), $m
  12,749
  15,419
  18,425
  22,015
  30,721
  40,809
  52,320
  65,276
  79,681
  95,528
  112,735
  131,398
  151,426
  172,785
  195,444
  219,375
  244,555
  270,967
  298,602
  327,458
  357,541
  388,867
  421,461
  455,353
  490,586
  527,206
  565,272
  604,847
  646,001
  688,814
Retained Cash Flow (-), $m
  -17,317
  -21,078
  -25,250
  -29,700
  -34,362
  -39,170
  -44,060
  -48,975
  -53,867
  -58,698
  -63,441
  -68,082
  -72,613
  -77,037
  -81,365
  -85,613
  -89,800
  -93,953
  -98,097
  -102,260
  -106,471
  -110,760
  -115,153
  -119,681
  -124,369
  -129,244
  -134,332
  -139,658
  -145,246
  -151,118
Prev. year cash balance distribution, $m
  6,182
  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
  1,614
  -5,659
  -6,824
  -7,685
  -3,642
  1,638
  8,260
  16,301
  25,815
  36,830
  49,293
  63,317
  78,813
  95,748
  114,079
  133,763
  154,755
  177,014
  200,505
  225,198
  251,070
  278,108
  306,307
  335,672
  366,217
  397,962
  430,940
  465,188
  500,755
  537,696
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
  1,548
  -5,181
  -5,939
  -6,328
  -2,823
  1,189
  5,580
  10,188
  14,829
  19,309
  23,409
  27,019
  29,966
  32,144
  33,492
  33,992
  33,672
  32,599
  30,872
  28,616
  25,969
  23,076
  20,076
  17,096
  14,246
  11,611
  9,249
  7,197
  5,466
  4,049
Current shareholders' claim on cash, %
  79.5
  69.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5
  65.5

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 81234.1
Price to Sales 352.6
Price to Book 135.1
Price to Tangible Book
Price to Cash Flow 709
Price to Free Cash Flow 2400.8
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 $28172.6118501 million for the last fiscal year's total revenue generated by CNOOC ADR. The default revenue input number comes from 0001 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 33.6% 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 20.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17529 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 220.9%.

Life of production assets of 0 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 -5.9%. 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 - $57432.738815 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 10.509 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 $1.8 billion.

RELATED COMPANIES Price Int.Val. Rating
PTR PetroChina ADR 73.06 5,058.73  str.buy
BP BP ADR 41.16 630.14  str.buy
XOM Exxon Mobil 78.19 139.68  str.buy
PSX Phillips 66 96.23 241.16  str.buy

COMPANY NEWS

▶ A.M. Best Affirms Credit Ratings of ICM Assurance Ltd   [Nov-16-18 03:18PM  Business Wire]
▶ Is CNOOC (CEO) a Great Value Stock Right Now?   [Oct-31-18 09:10AM  Zacks]
▶ Why CNOOC Limited (HKG:883) Could Be Your Next Investment   [Aug-28-18 09:57PM  Simply Wall St.]
▶ New Strong Sell Stocks for August 22nd   [Aug-22-18 06:58AM  Zacks]
▶ How Cheniere and Tellurian Are Losing the Trade War   [Aug-06-18 01:16PM  TheStreet.com]
▶ China Strikes Back, Delineating the 'New Silk Road'   [Aug-03-18 01:02PM  TheStreet.com]
▶ 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]

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