Hong Kong-listed Citic Resources surges as oil prices trade near record high

Hong Kong-listed Citic Resources Holdings Ltd., a unit of one of the mainland's top oil producers, surged in early trade Tuesday as oil prices traded near record highs.

Oil futures for June delivery traded close to $120 a barrel on Tuesday in Asia after reaching an intraday peak of $120.20 on Monday.

"Citic Resources has oilfields abroad and higher oil prices will help the company improve its earnings," said Castor Pang, a strategist at Sun Hung Kai Financial. "As long as oil prices are higher, oil stocks will continue to post gains."

Last year, Citic Resources agreed to buy a Kazakhstan oil field, replacing CNPC (Hong Kong) Ltd. as the fourth-largest listed Chinese oil producer in terms of output. The biggest producers are PetroChina Co., China Petroleum Corp. and CNOOC Ltd.

The company also owns an oilfield in Indonesia.

"We believe Citic Resources is a major beneficiary of rising oil prices given its exposure to upstream but not to the Chinese refining sector," Goldman Sachs wrote in a note to clients.

Goldman Sachs has a "buy" recommendation on Citic Resources and a target price of HK$5.25 over a 12-month period.

At 10.57 a.m. (0257 GMT), shares of Citic Resources were up 6.3 percent at HK$3.89. The stock rose as much as HK$3.92 earlier today.

Another oil producer, CNOOC Ltd., gained 2.96 percent to HK$13.90. (Thomson Financial)