Jereh Shares 002353 Stock Investment Report
1. 002353 Introduction to Jerry Co., Ltd.
The headquarters of Yantai Jerry Group is located in the beautiful coastal city of Yantai. It is a rapidly emerging and highly competitive diversified private joint-stock enterprise in China's oil field and mining equipment fields. It consists of nine member companies and four Composed of overseas offices. The main business components include: R&D, production and sales of special oilfield equipment, oilfield cementing and fracturing and other special operation equipment, and natural gas compressor units; oilfield and mining equipment maintenance and transformation and accessories sales; offshore oilfield drilling and production platform engineering operation services; Sales and maintenance of engine power and transmission equipment; website operation and software development, etc.
2. Company investment highlights.
1. The company is a rapidly emerging oilfield special equipment manufacturer and oilfield service provider in China. Its business covers the research and development, production, sales, maintenance services, accessories sales and oilfield technical services of oilfield special equipment. At present, the company divides its main business into three major sectors: oilfield and mining equipment maintenance and transformation and accessories sales, oilfield special equipment manufacturing, and offshore oilfield drilling and production platform engineering operation services. The company's fracturing equipment is already at the first-class level in China, and together with the four machine plants under Sinopec Group, it occupies the vast majority of the domestic market share. The company's fracturing equipment has a market share of over 40%.
2. Cost advantage: The company is the Chinese service agent and distributor of 16 foreign manufacturers. It maintains regular procurement relationships with many foreign manufacturers. The company can purchase most of the outsourced products at relatively low prices. parts, reducing procurement and manufacturing costs; at the same time, the company has nearly 10 years of experience in equipment maintenance technology, has good and long-term cooperation with foreign special equipment manufacturers in the petroleum and mining industries, and can obtain support in R&D and services, which also reduces the cost accordingly. the cost of the company’s products and services. The company's product hardware configuration basically uses imported products, which meets the high reliability requirements of oil field equipment. Among them, the key component - the three-cylinder plunger pump. The company has signed a strategic cooperation agreement with the American OFM PUMP company to ensure that the company's products use The plunger pump has the best cost performance, making the performance and price of the whole machine highly competitive.
3. Technical advantages: At present, the company is a "Key High-tech Enterprise of the National Torch Plan" recognized by the Ministry of Science and Technology. It has a technology research and development team with high business quality and strong development capabilities. The company's technical personnel can quickly design and manufacture new products suitable for oilfield exploration and production conditions in accordance with customer requirements, thus providing strong technical support for the company's continued growth in business performance in the oilfield equipment market. Since the establishment of the company, 17 technologies have been awarded national utility model patents, 3 technologies have been awarded national design patents, and 5 patent applications have been accepted. The company has accumulated dozens of technological innovations and transformation process methods. These technological accumulations have It provides a strong guarantee for the rapid improvement of the company's business and the update and improvement of products and services.
4. Management advantages: The company abandons the traditional pyramid management model and conducts flat management around product projects. Participants in each project form a project team, and the project manager manages and controls the entire project process, including tracking drawing design, material supply, production process, process formulation, quality management, delivery, after-sales service and other links. Establish an effective collaboration and communication mechanism within the project team, and relevant information can be quickly communicated within the project team, improving work efficiency and ensuring product quality, thereby maximizing customer requirements for products and delivery times.
5. Wide coverage of fracturing equipment: The company's product power ranges from 2,000 horsepower to 2,800 horsepower and can be independently produced, suitable for the exploitation of coal bed methane, natural shale gas, and oil. The company is currently developing 3,000-horsepower equipment. With the continuous launch of the company's new products and the large-scale development of the domestic shale gas market and deep-sea oil and gas fields in the future, the company faces huge market opportunities.
6. It is possible that the company holds more than 5% of the equity of Petroqin Oilfield Services, and the investment transaction price is relatively cost-effective. The company has deep strength and stable operations, which will help bring premium income to the company in the future; in addition , this investment is conducive to strengthening the company's cooperation with well-known domestic oil services companies, further deepening the cooperation between the company and Petro-Qin Oil Services, and is in line with the company's development strategy.
3. Research report valuation forecast.
The oil service equipment market will still be sluggish in 2015-2016
We expect that global oil company capital expenditures may continue to decline in 2015-2016, and PetroChina will continue to maintain cost control and low Capital expenditure, therefore the oilfield services and petroleum equipment market may still be relatively sluggish in 2015 and 2016. Although domestic shale gas development is progressing smoothly, there is a lack of large-scale new discoveries and a relatively small amount of overall investment, which has a small impact on the market.
Intended to use innovation to strengthen competitiveness in the international market
In Jerry's traditional market, fracturing services have been significantly affected by the reduction in production-increasing projects and the decline in procurement. We expect the company to increase business expansion and overseas business in natural gas engineering. Overseas oilfield services projects can take advantage of (1) the preferential financing policies of the Belt and Road Initiative (2) domestic manufacturing cost advantages (3) the company recently launched Jereh GO, deploying O2O petroleum equipment, connecting domestic equipment manufacturing capabilities and overseas small and medium-sized customers ( Oil Company and Oil Services Company), drive the manufacturing quality of domestic manufacturing companies, provide customers with integrated services, expand Jerry's overseas customer base, and strengthen the brand image.
Lower profit forecast: Domestic traditional oilfield machinery and equipment are in the doldrums
We lower the company’s profit forecast for 2015/16/17 to 0.22/0.31/0.47 yuan/share (originally 2.18 /2.94/3.12 yuan/share), considering that the domestic oilfield services and fracturing and other service markets will still be sluggish in 2015-16, we lower the revenue forecast of equipment manufacturing in 2015-16 to 2047/2354 million yuan (the decrease is (61%/64%); however, we have increased the revenue forecast for the natural gas engineering segment and foreign oilfield services from 2016 to 2018, hoping to help the company survive the industry winter. We believe that the company's team execution capabilities, incentive system, and abundant cash are a good foundation for the company's transformation or mergers and acquisitions to become stronger.
Four. Operational plan.
Operation plan: Buy on dips between 25-27.5 yuan, short-term operation, target price around 29-32 yuan.