\u3000\u3 Shengda Resources Co.Ltd(000603) 619 Zhongman Petroleum And Natural Gas Group Corp.Ltd(603619) )
Event overview
On April 21, 2022, the company released its annual performance report for 2021, realizing an operating revenue of 1.754 billion yuan, a year-on-year increase of 10.67%; The net profit attributable to the shareholders of the listed company was 66.14 million yuan, with a loss of 486 million yuan in the same period last year; The net cash flow from operating activities was 515 million yuan, a year-on-year increase of 136.34%. In 2021, the company plans to distribute a cash dividend of RMB 1.00 (including tax) for every 10 shares to all shareholders, with a total dividend of RMB 40 million, accounting for 60.48% of the company’s net profit attributable to the owners of the parent company in 2021.
Analysis and judgment:
The company’s exploration and development business has become the main source of profits
In 2021, the company’s exploration and development business realized an operating revenue of 397 million yuan, a gross profit of 280 million yuan and a gross profit margin of 70.6%; Drilling engineering services achieved an operating revenue of 1.1 billion yuan, a gross profit of 228 million yuan and a gross profit margin of 20.8%; The sales and leasing of drilling rigs and accessories achieved an operating revenue of 250 million yuan and a gross profit of 57 million yuan.
The production capacity of Wensu oilfield is in the stage of rapid construction
On December 31, 2021, the daily output of crude oil of the company reached 893.7 tons / day, and the construction target of 300000 tons of production capacity was completed. The company expects that in 2022, it will actively complete the reporting and production replacement of new reserves in Hong11 block and hongqipo oilfield, complete 120 development wells in the whole year, plan to produce 385000 tons of oil in the whole year, and build a production scale with a daily oil production capacity of more than 1300 tons and an annual oil production of 450000 tons by the end of the year.
The gross profit margin of the company’s drilling business improved and the management expenses also decreased significantly
In 2021, the operating revenue of the company’s drilling engineering business in Iraq accounted for nearly 50% of the total revenue of drilling engineering. The gross profit margin of this business rebounded sharply last year and realized a gross profit of 127 million yuan; The gross profit margin of the company’s drilling engineering business in Pakistan was the highest, reaching 40.08%, with a year-on-year increase of nearly 4 percentage points. In 2021, the company’s management expense was 210 million yuan, which decreased by 49.66% year-on-year due to the year-on-year decrease in shutdown loss compared with 2020.
Investment advice
In 2021, the company’s profit will be greatly improved, the crude oil production is expected to continue to increase to 1300 tons / day, and the profitability of drilling engineering will also be significantly restored. Considering the reasons for the rise of international oil prices, we raised the forecast of the company’s operating revenue of RMB 3.022/33.75 / (unpredicted) billion from 2022 to 2024 to RMB 3.195/40.21/5.027 billion, and raised the eps1.2 from 2022 to 202451 / 1.72 / (unpredicted) yuan is predicted to 1.52/1.93/2.42 yuan, corresponding to the closing price of 14.54 yuan on April 25, 2022, and PE is 10 / 8 / 6 times respectively, maintaining the “overweight” rating of the company.
Risk tips
Macroeconomic risks, long-term low international oil prices, changes in overseas oil and gas policies and lagging project progress.
