On April 21, China’s largest offshore crude oil and natural gas producer CNOOC jumped in Shanghai's trading debut and its share surged by a maximum of 44%.
The state-back company CNOOC (中国海洋石油集团有限公司)has a strong opening that led to an immediate shot up of 44% in CNOOC shares on the Shanghai Stock Exchange, hitting a price ceiling for the day. It subsequently triggered a 30-minute trading halt.
The company closed its shares at nearly 28% higher on Thursday, pricing at CNY 13.79 apiece. In the offering, this oil giant raised a total of CNY 28.1 billion as the world's third-largest equity capital market deal.
In 2021, CNOOC achieved a historical record of gaining revenue of CNY 222.1 billion in oil and gas sales, up 59.1% year-on-year, and a net profit of 70.3 billion yuan, up 181.7% year-on-year. The company's main business is concentrated upstream and its main source of revenue is oil and gas sales, which are subject to fluctuations in oil and gas prices.
Investors are chasing CNOOC as a shelter with relatively low valuation and high dividends in China's stock market while oil pricing is accelerating its inflation. Along with turbulent economic factors, such as COVID-19 flare-ups and the Russia-Ukraine war, the gas and oil industry has undergone unusual and glooming price fluctuations. Without a doubt, CNOOC's strong debut defies the weak market and reverses passive investor sentiment.
In this offering, nearly half was sold to 12 Chinese state-owned companies, such as China Life Insurance Co., China National Petroleum Corporation, and Sinopec Corporation. Disclosed by the company, this offering will be utilized to fund a variety of oil-field developments.