0632 GMT 11 March Dow Jones] STOCK CALL: Macquarie starts China Oilfield Services (2883.HK) at Underperform with a target price of HK$10.40; it believes COSL is set to deliver several years of near-zero earnings growth after a stellar FY05-10 EPS CAGR of 35%, as costs rise and margins fall. The house says that COSL’s core strengths of integrated shallow water China operations and its Cnooc (0883.HK) relationship do not give leverage to key global growth themes and “China deepwater is not the panacea many believe”, as COSL has only just started a multi-year learning period and does not even posses its own deepwater rig. COSL slides 2.8% to HK$12.62.
- Robert Li, Dow Jones & Company