\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 968 Cnooc Energy Technology & Services Limited(600968) )
Event: on April 18, 2022, the company released the annual report of 2021. In 2021, the company achieved a revenue of 38.7 billion yuan, a year-on-year increase of + 17%; The net profit attributable to the parent company was 1.3 billion yuan, a year-on-year increase of – 16%. In Q4 single quarter of 2021, the company achieved a revenue of 13.2 billion yuan, a year-on-year increase of + 5% and a month on month increase of + 33%; The net profit attributable to the parent company is – 59 million yuan.
Comments:
The annual revenue increased steadily, and the impairment of assets dragged down the performance: in 2021, the international crude oil price showed a volatile upward trend as a whole, and the annual average price of oil distribution was $71 / barrel, a year-on-year increase of + 69%. The rise in oil prices promoted the recovery of the prosperity of the oil service industry, the company’s revenue increased steadily, and the gross profit margin increased slightly by 0.12pct to 13.2%. In 2021, the company accrued impairment of 750 million yuan, of which the impairment of fixed assets was 737 million yuan, which dragged down the company’s performance. If the impact of impairment of fixed assets is deducted, the net profit attributable to the parent company will reach 1.8 billion yuan in 2021.
Accelerate the green and low-carbon transformation, and the profits of low-carbon environmental protection and digital sectors have increased significantly: under the background of “carbon peaking and carbon neutralization”, the company actively practices the concept of green and low-carbon development, and its main business is adjusted to three business sectors: energy technology services, low-carbon environmental protection and digital industry, and energy logistics services. In 2021, the energy technology service business achieved an operating revenue of 13.7 billion yuan, a year-on-year increase of + 17%, and an operating profit of 800 million yuan, a year-on-year increase of – 16%; The low-carbon environmental protection and digitization sector achieved an operating revenue of 8.6 billion yuan, a year-on-year increase of + 13%, and an operating profit of 480 million yuan, a year-on-year increase of 50%, contributing to an obvious profit increment; The operating revenue of the energy logistics service sector was 18.4 billion yuan, a year-on-year increase of 18%, and the operating profit was 560 million yuan, a year-on-year increase of – 16%.
The tightening of crude oil supply and demand and the increase of upstream capital expenditure drive the prosperity of the oil service industry: the “seven-year action plan” of CNOOC to increase reserves and production continues to be promoted. The capital expenditure of CNOOC, the parent company of the company, in 2021 was 87.6 billion yuan, an increase of 13% over 77.4 billion yuan in 2020. According to CNOOC’s strategic outlook for 2022, the capital expenditure budget in 2022 was 90-100 billion yuan, a steady increase over 2021. In terms of oil price, OPEC on the supply side and shale oil in the United States increased slowly. IEA predicted that 1.5 million barrels per day of Russian crude oil would be withdrawn from the market in April; In the era of post epidemic on the demand side, the global crude oil demand recovers slowly. IEA predicts that the global crude oil demand will increase by 1.9 million barrels / day in 2022, and the oil price will remain high. Driven by high oil prices and increased upstream capital expenditure, China’s offshore oil service industry will remain prosperous and the company’s performance will continue to grow.
Profit forecast, valuation and rating: under the influence of asset impairment, the company’s performance in 2021 is lower than expected, and the Chinese market is affected by the epidemic, and the company’s project progress may be delayed. 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 18.84 (12%) / 20.66 (19%) / 2.294 billion yuan from 20222024, and the corresponding EPS will be 0.19/0.20/0.23 yuan respectively. Considering the increase of capital expenditure in China’s upstream, the “seven-year action plan” continues to advance. We are still optimistic about the prosperity recovery of the oil service industry and the future development prospects of the company, so we maintain the “buy” rating.
Risk tip: the international crude oil price fluctuates, and CNOOC’s capital expenditure is lower than expected; The progress of the project is less than expected.
