2. April 24, 2012 Global Strat egy
offset the loss of Myanmar gas in April; it reportedly will seek additional fuel
oil and spot LNG cargoes to offset the loss from Bongkot. We expect some 2
pressure on PTT’s 1H12 costs as a result.
Preferred picks.
Prefe rred picks We continue to have an Overweight stance on the sector,
with all our China O&G stocks ranked at 4-STARS (Buy). We rank PTT PCL at
3-STARS (Hold), while PTTEP is ranked 2-STARS (Sell), on concerns of
potential equity raising, given its large capex program and leveraged
balance sheets.
Select Integrated Oil & Gas and E&P Performance and Key Capital IQ Consensus Ratios as at April 23, 2012
23,
Price Performance PER (x) PAT Growth
Trading Share Market Cap
Company Name CIQ Ticker Ccy Price (USD mln) 1 Mth 3 Mths 6 Mths FY2012 FY2013 FY2012 FY2013
(USD
Integrated O&G
Exxon Mobil Corporation NYSE:XOM USD 85.69 402,954 0.2% -2.0% 6.9% 10.2x 9.6x -5.5% 5.5%
PetroChina Co. Ltd. SEHK:857 HKD 11.20 283,149 1.4% -1.1% 19.1% 10.7x 10.0x 19.5% 4.2%
Royal Dutch Shell plc LSE:RDSA GBP 21.10 218,865 -5.0% -8.7% -6.2% 7.6x 7.1x -13.7% 7.0%
Chevron Corporation NYSE:CVX USD 102.44 202,081 -3.7% -4.3% -2.9% 7.7x 7.4x -1.1% 0.8%
BP plc LSE:BP. GBP 4.30 131,349 -10.0% -9.9% -2.2% 6.3x 5.9x -20.5% 5.0%
China Petroleum & Chemical Corp. SEHK:386 HKD 8.14 98,276 -5.8% -9.9% 14.0% 7.2x 6.7x 13.5% 5.5%
ConocoPhillips NYSE:COP USD 72.33 92,560 -5.5% 2.5% 0.7% 8.2x 7.9x -11.5% 4.1%
PTT Public Co. Ltd. SET:PTT THB 347.00 31,957 -0.6% 4.8% 22.2% 8.5x 7.5x 11.2% 14.0%
Average -3.61% -3.55% 6.45% 8.3x 7.8x -1.0% 5.8%
Exploration & Production (E&P)
CNOOC Ltd. SEHK:883 HKD 16.00 92,045 -2.3% 3.2% 24.6% 8.3x 8.3x 0.1% 0.4%
Statoil ASA OB:STL NOK 148.60 82,198 -6.1% 0.5% 5.2% 8.4x 7.9x -30.2% 4.6%
Suncor Energy Inc. TSX:SU CAD 31.02 48,703 -5.4% -9.4% 2.5% 9.2x 8.6x 20.6% 14.8%
Anadarko Petroleum Corporation NYSE:APC USD 71.00 35,897 -10.6% -10.7% -10.2% 17.5x 13.6x NM 33.0%
Apache Corp. NYSE:APA USD 90.96 34,970 -10.6% -7.5% -4.0% 7.2x 6.4x 11.5% 15.9%
Woodside Petroleum Ltd. ASX:WPL AUD 34.96 29,641 -1.2% 3.7% 4.7% 14.8x 12.8x 27.1% 20.5%
PTT E&P PCL SET:PTTEP THB 174.00 18,626 -0.6% -0.9% 13.7% 10.7x 8.8x 20.4% 21.3%
Hess Corporation NYSE:HES USD 54.12 18,267 -9.6% -12.2% -9.5% 8.0x 6.8x 36.5% 25.5%
Average -5.79% -4.14% 3.38% 9.5x 8.5x 12.3% 17.0%
EV/EBITDA PBV ROE Gross Margin Div Yield
Company Name FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 FY2012 FY2013
Integrated O&G
Exxon Mobil Corporation NYSE:XOM 4.6x 4.5x 2.4x 2.1x 22.8% 21.5% 42.70% 44.30% 2.32% 2.45%
PetroChina Co. Ltd. SEHK:857 5.7x 5.4x 1.5x 1.4x 14.6% 14.6% 37.40% 47.05% 4.24% 4.56%
Royal Dutch Shell plc LSE:RDSA 3.8x 3.7x 1.1x 1.0x 15.8% 15.2% 17.80% 18.40% 4.97% 5.16%
Chevron Corporation NYSE:CVX 3.2x 3.1x 1.5x 1.3x 20.4% 18.6% 44.30% 45.90% 3.23% 3.40%
BP plc LSE:BP. 3.5x 3.3x 1.1x 0.9x 17.8% 16.9% 18.80% 19.70% 4.67% 5.16%
China Petroleum & Chemical Corp. SEHK:386 4.6x 4.2x 1.1x 1.0x 16.1% 15.2% 16.89% 17.28% 4.13% 4.40%
ConocoPhillips NYSE:COP 3.7x 3.7x 1.4x 1.2x 16.8% 16.1% 27.30% 28.60% 3.78% 4.04%
PTT Public Co. Ltd. SET:PTT 5.8x 5.2x 1.6x 1.4x 19.7% 19.6% 9.42% 10.28% 4.03% 4.48%
Average 4.4x 4.1x 1.4x 1.3x 18.0% 17.2% 26.83% 28.94%
28.94% 3.92% 4.21%
Exploration & Production (E&P)
CNOOC Ltd. SEHK:883 4.1x 4.1x 1.9x 1.6x 24.6% 21.1% 62.67% 61.45% 3.80% 3.93%
Statoil ASA OB:STL 2.1x 2.0x 1.5x 1.3x 18.7% 18.0% 47.28% 45.87% 4.56% 4.80%
Suncor Energy Inc. TSX:SU 4.7x 4.2x 1.1x 1.0x 13.5% 12.7% 60.80% 62.60% 1.47% 1.55%
Anadarko Petroleum Corporation NYSE:APC 5.5x 4.8x 1.7x 1.6x 10.3% 12.3% 71.30% N/A 0.51% 0.51%
Apache Corp. NYSE:APA 3.1x 2.9x 1.1x 0.9x 15.7% 15.3% 79.30% N/A 0.72% 0.72%
Woodside Petroleum Ltd. ASX:WPL 8.8x 7.2x 2.1x 1.9x 14.9% 16.6% 68.90% 68.90% 3.48% 3.85%
PTT E&P PCL SET:PTTEP 4.8x 4.0x 2.4x 2.0x 23.8% 24.6% 50.37% 51.43% 3.59% 4.42%
Hess Corporation NYSE:HES 3.1x 2.8x 0.9x 0.8x 11.5% 11.3% 36.30% 37.60% 0.77% 0.77%
Average 4.5x 4.0x 1.6x 1.4x 16.6% 16.5% 59.61% 54.64%
54.64 % 2.36% 2.57%
Source: S&P Capital IQ
Standard & P oor’s Equity Research
3. April 24 , 2012 Global Strat egy
S&P Capital IQ Equity Research – S&P Capital IQ Equity Research U.S. includes
Glossary Standard & Poor’s Investment Advisory Services LLC; Standard & Poor’s Equity
Research Services Europe includes Standard & Poor’s LLC- London; Standard &
3
Poor’s Equity Research Services Asia includes McGraw-Hill Financial Singapore Pte.
S&P STARS - Since January 1, 1987, S&P Capital IQ Equity Research has ranked a Limited’s offices in Singapore, Standard & Poor’s Investment Advisory Services
universe of U.S. common stocks, ADRs (American Depositary Receipts), and ADSs (HK) Limited in Hong Kong, Standard & Poor’s Malaysia Sdn Bhd, and Standard &
(American Depositary Shares) based on a given equity’s potential for future Poor’s Information Services (Australia) Pty Ltd.
performance. Similarly, S&P Capital IQ Equity Research has used STARS®
Abbreviations Used in S&P Capital IQ Equity Research Reports
methodology to rank Asian and European equities since June 30, 2002. Under
CAGR- Compound Annual Growth Rate
proprietary STARS (STock Appreciation Ranking System), S&P equity analysts rank
CAPEX- Capital Expenditures
equities according to their individual forecast of an equity’s future total return
CY- Calendar Year
potential versus the expected total return of a relevant benchmark (e.g., a regional
DCF- Discounted Cash Flow
index (S&P Asia 50 Index, S&P Europe 350® Index or S&P 500® Index)), based on a
EBIT- Earnings Before Interest and Taxes
12-month time horizon. STARS was designed to meet the needs of investors looking
EBITDA- Earnings Before Interest, Taxes, Depreciation and Amortization
to put their investment decisions in perspective. Data used to assist in determining
EPS- Earnings Per Share
the STARS ranking may be the result of the analyst’s own models as well as internal
EV- Enterprise Value
proprietary models resulting from dynamic data inputs.
FCF- Free Cash Flow
S&P Quality Rankings (also known as S&P Earnings & Dividend Rankings
Rankings)- FFO- Funds From Operations
Growth and stability of earnings and dividends are deemed key elements in FY- Fiscal Year
establishing S&P’s earnings and dividend rankings for common stocks, which are P/E- Price/Earnings
designed to capsulize the nature of this record in a single symbol. It should be noted, PEG Ratio- P/E-to-Growth Ratio
however, that the process also takes into consideration certain adjustments and PV- Present Value
modifications deemed desirable in establishing such rankings. The final score for R&D- Research & Development
each stock is measured against a scoring matrix determined by analysis of the scores ROE- Return on Equity
of a large and representative sample of stocks. The range of scores in the array of ROI- Return on Investment
this sample has been aligned with the following ladder of rankings: ROIC- Return on Invested Capital
ROA- Return on Assets
A+ Highest B+ Average C Lowest SG&A- Selling, General & Administrative Expenses
A High B Below Average D In Reorganization WACC- Weighted Average Cost of Capital
A- Above Average B- Lower NR Not Ranked
Dividends on American Depository Receipts (ADRs) and American Depository
S&P Issuer Credit Rating - A Standard & Poor’s Issuer Credit Rating is a current
Shares (ADSs) are net of taxes (paid in the country of origin).
opinion of an obligor’s overall financial capacity (its creditworthiness) to pay its
financial obligations. This opinion focuses on the obligor’s capacity and willingness
to meet its financial commitments as they come due. It does not apply to any specific
financial obligation, as it does not take into account the nature of and provisions of Disclosures/Disclaimers
the obligation, its standing in bankruptcy or liquidation, statutory preferences, or the
legality and enforceability of the obligation. In addition, it does not take into account
the creditworthiness of the guarantors, insurers, or other forms of credit
enhancement on the obligation.
Required Disclosures
In contrast to the qualitative STARS recommendations covered in this report, which
S&P Capital IQ EPS Estimates – S&P Capital IQ earnings per share (EPS) estimates are determined and assigned by S&P Capital IQ equity analysts, S&P’s quantitative
reflect analyst projections of future EPS from continuing operations, and generally evaluations are derived from S&P’s proprietary Fair Value quantitative model. In
exclude various items that are viewed as special, non-recurring, or extraordinary. particular, the Fair Value Ranking methodology is a relative ranking methodology,
Also, S&P Capital IQ EPS estimates reflect either forecasts of S&P Capital IQ equity whereas the STARS methodology is not. Because the Fair Value model and the
analysts; or, the consensus (average) EPS estimate, which are independently STARS methodology reflect different criteria, assumptions and analytical methods,
compiled by Capital IQ, a data provider to S&P Capital IQ Equity Research. Among quantitative evaluations may at times differ from (or even contradict) an equity
the items typically excluded from EPS estimates are asset sale gains; impairment, analyst’s STARS recommendations. As a quantitative model, Fair Value relies on
restructuring or merger-related charges; legal and insurance settlements; in process history and consensus estimates and does not introduce an element of subjectivity
research and development expenses; gains or losses on the extinguishment of debt; as can be the case with equity analysts in assigning STARS recommendations.
the cumulative effect of accounting changes; and earnings related to operations that
have been classified by the company as discontinued. The inclusion of some items,
such as stock option expense and recurring types of other charges, may vary, and
S&P Global STARS Distribution
depend on such factors as industry practice, analyst judgment, and the extent to In North America
which some types of data is disclosed by companies. As of March 31, 2012, research analysts at S&P Capital IQ Equity Research North
America recommended 34.5% of issuers with buy recommendations, 57.9% with
S&P Core Earnings – S&P Capital IQ Core Earnings is a uniform methodology for
hold recommendations and 7.6% with sell recommendations.
adjusting operating earnings by focusing on a company's after-tax earnings
generated from its principal businesses. Included in the S&P Capital IQ definition are
In Europe
employee stock option grant expenses, pension costs, restructuring charges from
As of March 31, 2012, research analysts at S&P Capital IQ Equity Research Europe
ongoing operations, write-downs of depreciable or amortizable operating assets,
recommended 30.1% of issuers with buy recommendations, 49.4% with hold
purchased research and development, M&A related expenses and unrealized
recommendations and 20.5% with sell recommendations.
gains/losses from hedging activities. Excluded from the definition are pension gains,
impairment of goodwill charges, gains or losses from asset sales, reversal of prior-
In Asia
year charges and provision from litigation or insurance settlements.
As of March 31, 2012, research analysts at S&P Capital IQ Equity Research Asia
S&P 12 Month Target Price – The S&P S&P Capital IQ equity analyst’s projection of recommended 35.9% of issuers with buy recommendations, 54.3% with hold
the market price a given security will command 12 months hence, based on a recommendations and 9.8% with sell recommendations.
combination of intrinsic, relative, and private market valuation metrics, including S&P
Fair Value.
Standard & Poor’s Equity Research
4. April 24 , 2012 Global Strat egy
Globally Parties shall have no liability for any errors, omissions, or interruptions therein,
As of March 31, 2012, research analysts at S&P Capital IQ Equity Research globally regardless of the cause, or for the results obtained from the use of the information 4
recommended 34.0% of issuers with buy recommendations, 56.3% with hold provided by the S&P Parties. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR
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Standard & Poor’s Equity Research
5. April 24 , 2012 Global Strat egy
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Standard & Poor’s Equity Research
6. April 24 , 2012 Global S trat egy
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Standa rd & Poor’s Equity Research
