The Event
　　According to its earnings alert, CNOOC Limited (883 HK/HK$9.66, BUY; 600938 CH/RMB16.29, NR) expects its net profit to surge 104%-108% YoY to RMB107.8bn- RMB109.8bn in 9M22 under CAS.
　　The key driver for the strong growth was the sharply higher oil price.
　　Our Take
　　For 3Q22 alone, the net profit should be RMB35.9bn-RMB37.9bn under CAS, down 4% to up 1% QoQ. We think this range of earnings change is better than expected as the average price of Brent dropped 12.5% QoQ to US$97.8/bbl in 3Q22. Even if we remove the impact of the 3.4% QoQ depreciation of the average exchange rate of RMB against USD in 3Q22, the estimated decline in earnings will be just 3% to 8% QoQ in 3Q22.
　　In 1H22, the company’s earnings were basically the same under IFRS and CAS.
　　Assuming its earnings under both standards to remain the same in 9M22, the company’s guided earnings for 9M22 reach 83.9%-85.5% of our full-year forecast.
　　Although our current full-year forecast for the average price of Brent implies a 5.6% QoQ fall in the average price of Brent to US$93.2/bbl in 4Q22, we see upside risk in our full-year earnings forecast assuming our oil price forecast is achieved.
　　At this stage, we reiterate our BUY call given the low valuation of the company’s Hong Kong shares (3.3x 2022E P/E and 12.1% 2022E dividend yield). Our target price is HK$13.78.