\u3000\u3 China Vanke Co.Ltd(000002) 353 Yantai Jereh Oilfield Services Group Co.Ltd(002353) )
Event overview: the company released the first quarterly report of 2022. In 2022q1, the company achieved a revenue of 1.825 billion yuan, a year-on-year increase of + 27.27%; The net profit attributable to the parent company was 218 million yuan, a year-on-year increase of – 21.84%; Deduct 186 million yuan of non parent net profit, a year-on-year increase of – 28.83%.
The recovery of the industry drives the acquisition of orders and ensures the stable growth of revenue. Benefiting from the rising volatility of international oil prices (Brent crude oil price has increased from US $77.18/barrel at the end of 2021 to US $107.91/barrel in Q1 of 2022), the situation of the oil and gas industry continues to improve and the prosperity shows an upward trend; At the same time, the “seven-year action plan” implemented by the three major oil companies to ensure national energy security will also continue to make efforts to develop unconventional oil and gas resources such as shale oil and gas and tight oil and gas, and the demand for oil and gas equipment in the Chinese market will continue to increase. The rising prosperity of the oil and gas industry outside China ensures the stable growth of the company’s revenue. According to the announcement, 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 8.86 billion yuan of stock orders at the end of the year.
Gross profit margin fell and profitability was slightly under pressure. The net profit attributable to the parent company in 2022q1 was 218 million yuan, a year-on-year increase of – 21.84%. The net interest rate of the company in 2022q1 was 11.97%, a year-on-year increase of -7.68pct, and the profitability was under pressure. In terms of gross profit margin, due to the rise in the prices of raw materials, bulk commodities and international shipping prices, the company’s gross profit margin fell. In 2022q1, the company’s gross profit margin was 30.50%, with a year-on-year increase of -5.95pct; In terms of period expense rate, the period expense rate of 2022q1 company was 15.60%, with a year-on-year increase of -1.89pct. Among them, the sales expense rate, management expense rate, financial expense rate and R & D expense rate were 5.21%, 7.50%, 2.89% and 2.86% respectively, with year-on-year changes of -0.57, -1.55, + 4.01 and -0.97pct respectively. The large change in financial expense rate was caused by the depreciation of US dollar and ruble and high exchange loss.
The recovery of the industry drives the increase of product demand, and the new energy business is expected to become the second growth curve. The increase of oil and gas exploration efforts of China’s three major oil companies and the recovery of overseas shale oil development will drive the demand for oil service equipment. At the same time, the rise of international oil prices will also drive the continuous increase of capital expenditure of oil companies. The oil and gas industry will continue to recover in foreign markets in China, and the company’s revenue is expected to continue to grow; While expanding and strengthening the field of oil and gas equipment, the company actively distributes new energy fields such as lithium battery cathode materials. According to the company’s announcement, the company has established a joint venture with Xiamen Jiasi Energy Technology Co., Ltd. and Zhao Jinbao team of Jiageng innovation laboratory to jointly promote the R & D, production and sales of new energy material products such as pure silicon carbon products, pure silicon oxide products and silicon-based composite negative electrode materials, and invested in the integration project of 100000 tons of lithium-ion battery negative electrode materials in Tianshui city. The company actively distributes the field of new energy, which is expected to become the second growth curve of the company and jointly drive the development of the company with the main business of oil service.
Investment suggestion: we expect the company to achieve revenue of RMB 10.835/12.917/15.402 billion from 2022 to 2024, and the net profit attributable to the parent company is RMB 2.133/26.20/3.139 billion respectively. The corresponding PE of the current stock price is 14 / 11 / 9 times respectively, maintaining the “recommended” rating.
Risk tip: the international oil price fluctuates greatly, the promotion of new business is less than expected, and the capital expenditure of oil companies is less than expected.
