\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 583 Offshore Oil Engineering Co.Ltd(600583) )
Event: on March 21, 2022, the company released its 2021 annual report. In the whole year of 21 years, the company realized an operating revenue of 19.8 billion yuan, a year-on-year increase of + 10.8%, a net profit attributable to the parent company of 370 million yuan, a year-on-year increase of + 1.8%, and a net profit not attributable to the parent company of 7.08 million yuan, a year-on-year decrease of – 86.32%. Among them, the operating revenue in Q4 of 21 years was 7.85 billion yuan, with a year-on-year increase of + 30.9% and a month on month increase of + 75.3%, and the net profit attributable to the parent company was -179 million yuan.
The workload increased steadily, and the provision for asset impairment of the joint venture company dragged down the performance: the overall international crude oil price showed a volatile upward trend in 21 years. The annual average price of oil distribution was US $71 / barrel, a year-on-year increase of + 69%, and the highest exceeded US $86 / barrel. With the promotion of project construction outside China, the overall workload completed by the company has maintained growth, especially the offshore installation workload has increased rapidly, which has maintained the growth of the company’s operating revenue for 21 years. As CNOOC fluor Heavy Industry Co., Ltd., which holds 51% of the company’s shares, has accrued a fixed asset impairment of 306 million yuan during the reporting period, and the deferred income tax assets that can make up for losses are reversed by 254 million yuan, a total of 560 million yuan. The corresponding company’s income calculated through the investment income account is reduced by 286 million yuan, dragging down the company’s performance. If the impact of this factor is deducted, the company’s net profit will reach 658 million yuan, an increase of 81% year-on-year.
China’s oil service industry recovered, and the company’s orders in China increased steadily: in 2021, the company signed new market development contracts of 25.343 billion yuan, an increase of 15% compared with 22.009 billion yuan in 2020. The contract value of China is about 24.349 billion yuan. The main newly signed projects in China are Enping 15-1 oilfield group development project, Liuhua 11-1 / 4-1 secondary development project, Lufeng 12-3 oilfield development project, Zhuhai LNG expansion project phase II EPC project and Tangshan LNG project terminal phase II EPC project.
The overseas oil service market is depressed, and the improvement of China’s upstream capital expenditure supports the growth of performance: the global offshore oil and gas capital expenditure in 2021 was US $97 billion, an increase of only 8% over 2020, resulting in limited improvement in the oversupply of international oil and gas projects, and the market is still relatively depressed; China has benefited from the continuous and strong promotion of the “seven-year action plan” of CNOOC to increase reserves and production, and China’s offshore oil and gas engineering industry has maintained growth. According to the 2022 strategic outlook of CNOOC, the parent company of the company, CNOOC’s capital expenditure in 2021 is expected to be 90 billion yuan, an increase of 13% over 79.5 billion yuan in 2020. The capital expenditure budget in 2022 is 90-100 billion yuan, a steady increase over 90 billion yuan in 2021. In the future, in order to realize the “seven-year action plan” and achieve the target of increasing oil and gas production in 2025, China’s oil service industry will still maintain a high outlook, and the company’s performance is expected to continue to grow.
Profit forecast, valuation and rating: the provision for asset impairment of the joint venture company leads to low performance expectation in 21 years. The overseas oil service market is depressed, and the Chinese market is affected by the epidemic, and the growth rate of new orders signed by the company may decline. Therefore, we reduce the company’s profit forecast for 20222023 and add the profit forecast for 2024. It is expected that the company will realize the net profit attributable to the parent company of 8.14 (down 46%) / 9.88 (down 55%) / 1.190 billion yuan from 20222024, and the corresponding EPS is 0.18/0.22/0.27 yuan respectively. Considering the increase of capital expenditure in China’s upstream, the “seven-year action plan” continues to advance, and we are still optimistic about the company’s future development prospects, so we maintain the “overweight” rating.
Risk tip: the international oil price has fallen sharply, the capital expenditure is less than expected, and the epidemic has repeatedly led to risks in overseas markets.
