\u3000\u3 China Vanke Co.Ltd(000002) 353 Yantai Jereh Oilfield Services Group Co.Ltd(002353) )
The company achieved a revenue of 8.776 billion yuan in 2021, with a year-on-year increase of 5.80%. In 2021, the company’s operating costs increased due to the rise of raw materials, bulk commodities and international shipping prices. The annual revenue and net profit attributable to the parent company were 8.776 billion yuan and 1.586 billion yuan respectively, with an increase of 5.80% and – 6.17%, and the gross and net profit margins were 34.86% and 18.36% respectively, down 3.04 and 2.40 percentage points year-on-year. Q4 achieved revenue and net profit attributable to parent company of 3.248 billion yuan and 440 million yuan in a single quarter, an increase of 13.13% and – 23.57% respectively.
With the rise of international oil prices and the strengthening of China’s development, the situation of the oil and gas industry continued to improve. Since January of 20 years, affected by covid-19 epidemic, the global demand for crude oil and natural gas has decreased significantly, and the international oil and natural gas prices have fallen sharply in the short term. However, with the improvement of the local situation of the epidemic and the intensification of geopolitical risks such as the conflict between Russia and Ukraine, the international oil price fluctuated and rose in 2021. The average price of WTI crude oil futures was US $68.01/barrel, with an annual increase of more than 55%, the largest annual increase in 12 years; The average price of Brent crude oil futures was US $70.94/barrel, with an annual increase of more than 53.6%, the largest annual increase in five years, and the situation of the oil and gas industry continued to improve. According to the report of spears & Association, the global oilfield equipment and service market expenditure in 2021 was US $201675 billion, an increase of 3.46%, and the fracturing equipment market scale was US $15.667 billion, an increase of 19.21%. In addition, 2021 is the first year of China’s 14th five year plan. Petrochina Company Limited(601857) enterprises continue to strengthen exploration and development, including 199 million tons of crude oil, an increase of 2.1%, and 205.26 billion cubic meters of natural gas, an increase of about 8.2%. The rapid development of unconventional oil and gas resources has brought new opportunities for the company’s equipment manufacturing and technical services.
Break through key global markets and have full orders on hand. In 2021, the company made great progress in the American market, including signing orders for two sets of turbine fracturing equipment and the first 30MW generator set supporting electric drive fracturing and other equipment. In addition, the company also obtained an order of about 2.7 billion yuan for phase 5 project of northern Jurassic production facility in Kuwait. In 2021, the company obtained a total of 14.791 billion yuan of tax orders, an increase of 51.73% at the same time, a record high, and the stock orders at the end of the year were 8.86 billion yuan. With the gradual delivery of orders, the performance level of the company is expected to rise significantly this year.
Actively arrange lithium battery cathode material projects and form a dual main business strategy of “oil and gas + new energy”. In response to the national dual carbon policy plan, the company has implemented the diversification strategy, that is, actively layout the new energy field on the basis of promoting the original main oil and gas industry. At present, the company has implemented the graphite negative electrode material integration project of 100000 tons of lithium-ion batteries in Tianshui, Gansu Province, and cooperated with Jiageng innovation laboratory to implement the silicon based composite negative electrode material project of 18000 tons of lithium-ion batteries. In the future, the company will rely on its R & D and manufacturing experience in high-end industrial products to grasp the broad market opportunity of lithium battery cathode materials, so as to promote the rapid development of the company.
Profit forecast and valuation. The company is the global leader in fracturing equipment. Considering the recovery of global demand for fracturing equipment and the company’s orders in hand, it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 2.203, 2.606 and 3.149 billion yuan, and the current price corresponding to PE will be 16.5, 13.9 and 11.5 times, maintaining the “overweight” rating of the company.
Risk warning: international oil price fluctuation risk; exchange-rate risks; The expansion of new products was less than expected.
