\u3000\u3 China Vanke Co.Ltd(000002) 353 Yantai Jereh Oilfield Services Group Co.Ltd(002353) )
Event: the company released its 2021 annual report, realizing an operating revenue of 8.776 billion yuan, a year-on-year increase of 5.80%, and a net profit attributable to the parent company of 1.586 billion yuan, a year-on-year decrease of 6.17%. Among them, Q4 achieved a revenue of 3.248 billion yuan, a year-on-year increase of 13.13%, and a net profit attributable to the parent company of 440 million yuan, a year-on-year decrease of 23.57%.
In 21 years, the company’s operating revenue and new orders reached a new high since listing. In terms of splitting business, the revenue from oil and gas equipment manufacturing and technical services, maintenance and transformation and trade accessories was 7.056 billion yuan and 1.227 billion yuan respectively, with a year-on-year increase of 6.47% and 2.75%. In terms of orders, in 2021, the company obtained a total of 14.791 billion yuan of orders, an increase of 51.73% over the same period of the previous year, and the stock orders at the end of the year were 8.86 billion yuan (including tax); In terms of oil and gas equipment orders, according to the announcement, the company continued to make efforts to reverse the decline of orders in the second half of the year, and the oil and gas equipment orders increased year-on-year in the whole year.
Global oil and gas upstream activities pick up. In the past 21 years, international oil and gas prices have rebounded significantly, and global oil and gas upstream activities are in a warming trend. According to the report of spears & Association, the global fracturing equipment market in 2021 was US $15.667 billion, an increase of 19.21% over 2020. According to China’s “three barrels of oil” annual report, the capital expenditure of Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) in the exploration and production sector in 2022 was 181.2 billion yuan and 81.5 billion yuan respectively, with a year-on-year increase of 1.6% and 19.7%; The total capital expenditure budget of CNOOC is 90-100 billion yuan, which is further higher than the expected 90 billion yuan in 21 years. “Three barrels of oil” will continue to promote the development and utilization of China’s conventional and unconventional oil and gas resources.
Technological innovation drives development and actively distributes the new energy industry. The company has continuously launched new products, including China’s first fracturing intelligent control system and China’s first 3.5-inch large diameter coiled tubing operation skid set equipment, and implemented digital transformation to help efficient operation. In 2022, the 35mW mobile gas turbine generator set independently developed by Q1 Jerry was successfully applied in the United States, the natural gas supply system independently designed and manufactured was officially put into operation in Pakistan, and China’s first derrick coiled tubing operation equipment independently developed and manufactured was applied in Algeria. On March 12 this year, Jerry new energy’s lithium battery cathode material project with an annual output of 100000 tons was officially started. It is expected to be completed in September and put into trial operation at the end of the year. The commencement of the project marks the company’s dual main business strategic layout in oil and gas industry and new energy.
The profitability decreased slightly, and the cost control ability continued to be excellent. The company’s comprehensive gross profit margin for 21 years was 34.86%, a year-on-year decrease of 3.04 percentage points, which was mainly affected by the rise in the prices of bulk commodities and raw materials and the high international shipping prices; The net interest rate of the company in 21 years was 18.36%, a year-on-year decrease of 2.40 percentage points. Meanwhile, the company’s expense rate during the period was 13%, a year-on-year decrease of 0.5 percentage points, and the sales expense rate / management expense rate / financial expense rate were 4.93% / 7.80% / 0.24% respectively, showing excellent expense control ability. The company’s 21-year inventory turnover days / accounts receivable turnover days were 283 / 154 days respectively, with a year-on-year decrease of 31 days and an increase of 19 days respectively. In addition, the cash inflow from operating activities increased by 5.81% over the same period last year.
Profitability forecast and valuation. We are optimistic about the future development of the company. It is estimated that the company’s revenue from 2022 to 2024 will be 109.22/129.80/15.225 billion yuan respectively, and the net profit attributable to the parent company will be 22.21/26.28/3.039 billion yuan respectively, corresponding to 17 / 14 / 12 times of PE.
Risk tip: the international oil price has fallen sharply; Actual oil and gas capital expenditure is lower than expected; The macro demand side is less than expected.
