Analyst Note
| Chokwai Lee, CFA |Ongoing confusion over the status of Chinese ADRs following the flip-flop by the New York Stock Exchange to delist the three Chinese telcos is likely to weigh on the share price of CNOOC Ltd and its ADRs (CEO). To recap, CNOOC Ltd is the other notable company impacted by its parent being added to the banned list. Although PetroChina (PTR) and Sinopec (SNP) are not on the banned securities list, they may still be subject to weaker investor sentiment over perceived risks that President Trump could add more companies to the banned list before his term ends on Jan. 19. We keep our fair value estimates on CNOOC, PetroChina and Sinopec unchanged and we think their shares are undervalued (except PetroChina’s A-shares) at current share prices based on our expectation for oil prices to recover.