\u3000\u3 China Vanke Co.Ltd(000002) 353 Yantai Jereh Oilfield Services Group Co.Ltd(002353) )
Performance review
The company realized an operating revenue of 1.825 billion yuan in 2022q1, with a year-on-year increase of 27.27%; The net profit attributable to the parent company decreased by 1.821 billion yuan year-on-year.
Business analysis
The profitability decreased in the first quarter, which is expected to be partly affected by the change of product structure: the company’s profit in 2022q1 decreased year-on-year, with a gross profit margin of 30.5% in 2022q1, a year-on-year decrease of 5.95pcts and a month on month decrease of 1.43pcts; The net interest rate was 11.97%, down 7.68 PCTs year-on-year and 1.94 PCTs month on month. We expect that it is partly affected by the change of product structure caused by the reduction of the proportion of drilling and completion equipment revenue with high gross profit margin.
In the first quarter, the financial expenses and asset impairment losses fluctuated greatly, and the follow-up is expected to improve: the financial expense rate of the company in 2022q1 was 2.89%, with a year-on-year increase of 4.01pcts and a month on month increase of 0.92pcts, mainly due to the depreciation of the US dollar and ruble and high exchange losses. Meanwhile, in 2022q1, the company’s asset impairment loss (including credit impairment loss) increased by 299.62% year-on-year, mainly due to the change in the distribution of long-term accounts receivable. We believe that the impact of the epidemic is expected to gradually improve with the easing of geopolitical conflicts and the weakening of the epidemic.
In 2021, the company’s newly signed orders / orders on hand reached a record high. 2022 is expected to be a big year for the capital expenditure of oil companies, and the company’s newly signed orders may rise further. With the recovery of the prosperity of the oil service industry, the company signed new orders of 14.794 billion yuan in 2021, a year-on-year increase of 51.73%, and the stock orders of 8.86 billion yuan (including tax) at the end of the year, a year-on-year increase of 91.2%. Ihsmarkit predicts that the total global upstream exploration and development capital expenditure will increase by 24% year-on-year in 2022. Sinopec’s capital expenditure plan predicts that the exploration and development capital expenditure will increase by about 20% year-on-year in 2022. The prosperity of the oil service industry is expected to continue to improve, and the company may sign new orders or further increase in 2022.
Profit forecast and investment suggestions
It is estimated that the company will realize the net profit attributable to the parent company of RMB 2.023/27.03/3.512 billion respectively from 2022 to 2024, corresponding to the current pe14x / 11x / 8x. Considering that 2022 is expected to be the year of capital expenditure of oil companies, the company, as the leader of oil service equipment, will fully benefit. With the large-scale development of shale oil and gas in China and the expansion of overseas markets, the performance is expected to achieve high growth and maintain the “buy” rating.
Risk tips
Oil prices fell sharply, the progress of unconventional oil and gas exploitation was lower than expected, the development of overseas markets was blocked, and the risk of exchange rate fluctuations.
