Jerry shares (002353): oil clothing equipment leader: benefit China shale gas development
Investing in the leading oil oil clothing preparation leader, benefiting from China’s shale gas development, and the global oil service industry recovering.
The company’s main business is oil and gas equipment and oil and gas services, and it is a leader in domestic fracturing equipment.
During the ten years from 2008 to 2018, the company’s compound revenue growth rate was 26%, and its net profit was in line with the growth rate of 21%.
In 2018, revenue reached a record high of 4.6 billion, with a significant increase in performance of 808%; net interest rate rose to 14%; ROE was 7%.
The company’s orders increased rapidly, and overseas markets continued to expand.
The new orders in 2018 were 610,000 yuan, an annual increase of 43%.
Domestic and foreign revenue accounts for 60%: 40%; mainly exported to Russia and Central Asia, the Middle East, North America and other regions.
Order sources: (1) China’s shale gas 深圳桑拿网 development needs for fracturing equipment; (2) China’s “three barrels of oil” capital expenditure; (3) global oil and gas exploration and development capital expenditure.
We believe that China is initially similar to the US shale gas development base, and the demand for fracturing equipment has increased significantly.
Driven by the national energy security strategy, China’s shale gas development has increased.
At present, the cost of single well drilling in the southwestern region is about 50 million yuan. According to gas prices and supplements, we estimate that the cost of well drilling can be basically covered in about 2 years, which is already economical.
According to the National Energy Administration’s plan, the target for shale gas production in 2020 is 30 billion cubic meters, which is three times the output in 2018; the target is 80-100 billion cubic meters in 2030; promote “blowout” growth.
It is estimated that the total demand for fracturing equipment in China in 2020 will increase by 38-170% compared with 2019, and continue to grow at a high rate.
According to the “Fracturing Equipment-Shale Gas” demand forecasting model of Guojin Machinery, the total demand for fracturing equipment in China is estimated to be about 6 billion in 2019; according to neutral, the total optimistic demand in the optimistic scenario is $ 8.3-16.2 billion, up 38-170%, great elasticity; by 2030, the average annual total demand for fracturing equipment is about 15 billion.
It is expected that China’s “three barrels of oil” oil and gas exploration and development investment will increase by 15-20% in 2019-2021.
The growth of global oil and gas exploration and development capital expenditure from 2019 to 2021 will maintain a compound growth of 5-10%.
The “three barrels of oil” exploration and development capital expenditures increased by approximately 18% in 2018; plans to increase 19% -22% in 2019.
The global fracturing, drilling and completion related to Jerry shares, the growth rate of coiled tubing market continues to be higher than the industry growth rate.
It is expected that the oil service industry in the next year is expected to change from the “outstanding performance” of Jerry’s shares to “full bloom”.
Shale gas fracturing equipment is one of the best-demanded products in the oil service industry chain. In this market segment, the company and petrochemical machinery, gemstone machinery stand on top of each other.
The company has advanced technology and is expected to maintain a better city share.
Investment proposal is expected that the company’s revenue for 2019-2021 will be 65/91/117 million yuan, an increase of 42% / 39% / 29%; net profit is 10.
70,000 yuan, an increase of 73% / 48% / 38%; EPS is 1.
26 yuan; PE is 22/15/11 times.
In 2020, the oil service industry will have an average PE of 23 times.
Give the company 20 times PE in 2020, a reasonable market value of 31.4 billion, and a target price of 33 yuan in June-December.
First coverage, “Buy” rating.
Risk warnings: Expectations for shale gas development, supplementing the downgrade risks; the risk of a sharp drop in oil prices; risks for overseas operations.