\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 871 Sinopec Oilfield Service Corporation(600871) )
Event: on March 29, 2022, the company released its annual report for 2021. In 2021, the company achieved a revenue of 69.5 billion yuan, a year-on-year increase of + 2.14%, a net profit attributable to the parent company of 180 million yuan, a year-on-year increase of + 127.65%, and a net loss not attributable to the parent company of 100 million yuan was deducted, which narrowed the year-on-year loss; Among them, Q4 achieved a revenue of 22.8 billion yuan in a single quarter, a year-on-year increase of + 5.42% and a month on month increase of + 50.7%, with a net loss attributable to the parent company of 141 million yuan.
Comments:
With the rise of oil price, China’s oil service industry has recovered and its performance has increased significantly in the past 21 years: in the past 21 years, the overall international crude oil price showed a volatile upward trend. The annual average price of oil distribution was US $71 / barrel, with a year-on-year increase of + 69%, and the highest exceeded US $86 / barrel, driving the continuous recovery of the oil service market and helping the recovery of the company’s performance in the past 21 years; However, the overall situation of the overseas market was sluggish, which led to the decline of the company’s Q4 performance. The annual international business revenue was 9.52 billion yuan, up – 16% year-on-year, accounting for 14% of the company’s total revenue. In the 21st year, the company achieved revenue of 4.66 billion yuan in geophysical services, a year-on-year increase of + 1.4%; The drilling service sector achieved a revenue of 33.08 billion yuan, a year-on-year increase of – 3.3%; The logging service sector achieved a revenue of 3.21 billion yuan, a year-on-year increase of + 17.5%; The underground special operation service sector achieved a revenue of 9.38 billion yuan, a year-on-year increase of + 9.2%; The engineering construction service sector achieved a revenue of 16.71 billion yuan, a year-on-year increase of + 6.6%. With the boom recovery of the crude oil industry chain, the boom of China’s oil service industry is expected to continue to recover.
Continue to explore and optimize the market, and the contract amount has increased steadily: in 2021, the newly signed contract amount of the company was 70.9 billion yuan, an increase of 1.1 billion yuan year-on-year. In the Chinese market, the company fully supports key projects such as oil and gas storage increase in Shunbei new zone, PetroChina Southwest shale gas project, CNOOC large storage tank project and national pipe network project; Actively overcome the impact of the epidemic in overseas markets, vigorously cultivate and develop high-quality large-scale markets, and maintain a good development trend in Saudi Arabia and Kuwait. The company expects the newly signed contract amount to be 72 billion yuan in 2022, an increase of 1.1 billion yuan year-on-year, including 45 billion yuan in Sinopec market, 13.3 billion yuan in China’s external market and 13.7 billion yuan in overseas market.
Under the guidance of the policy of “increasing reserves and production”, China’s upstream capital expenditure increased to support performance growth: in 2021, China’s oil service industry maintained growth thanks to the continuous and strong promotion of the “seven-year action plan” for increasing oil and gas reserves and production. In 2021, the parent company’s China Petroleum & Chemical Corporation(600028) annual capital expenditure was 167.9 billion yuan, a year-on-year increase of + 24%, and the upstream capital expenditure was 68.1 billion yuan, a year-on-year increase of + 21%; In 2022, the China Petroleum & Chemical Corporation(600028) planned capital expenditure was 19.8 billion yuan, a year-on-year increase of + 18%, and the upstream planned capital expenditure was 81.5 billion yuan, a year-on-year increase of + 20%. In the future, in order to realize the “seven-year action plan” and achieve the goal of increasing oil and gas reserves and 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 overseas oil service market is depressed, and the Chinese market is affected by the epidemic, and the growth rate of the company’s newly signed orders may decline. Therefore, we lowered the company’s profit forecast for 20222023 and added the profit forecast for 2024. It is expected that the company’s net profit attributable to the parent company will be 3.52 (down 69%) / 5.59 (down 60%) / 750 million yuan from 20222024, and the corresponding EPS will be 0.02/0.03/0.04 yuan respectively. Considering the increase of capital expenditure in upstream China and the continuous promotion of the “seven-year action plan”, we are still optimistic about the future development prospects of the company, so we maintain the “overweight” rating of a + H shares of the company.
Risk tips: market competition risk, overseas operation risk and exchange rate risk.
