Jerry Shares (002353): Interim Report Exceeds Expectation, Shale Gas Economic Benefit Improves
Event: The company recently announced the 2019 semi-annual performance forecast, and it is expected that H1 in 2019 will achieve net profit attributable to mothers4.
210,000 yuan, an increase of 150% -180% every year last year.
The high performance growth exceeded expectations, and strong downstream demand ensured that orders fell.
According to the company’s performance forecast, the company ‘s first-half performance exceeded expectations mainly based on the promotion of the national energy security strategy. It has been increasing investment in unconventional oil and gas resources, especially shale gas resources. Demand for oil and gas equipment and services has been strong.Orders for product lines such as well equipment, coal technology services, etc. continued to maintain rapid growth, and operating performance improved significantly.
According to the announcement information, the company signed new orders at the end of 2018, with orders in hand at 60.
2 billion, an increase of 43% and 66% each year.
With the increase in fracturing capacity, we expect the order delivery schedule to continue to be optimized to ensure stable growth in sustainable performance.
The economic development of shale gas is improving, and the market demand for equipment continues to grow.
The current shale gas reserves are huge.
According to EIA statistics, shale gas geological resources in developing countries amount to 134.
4 trillion cubic meters, the technically recoverable resources are 31.
6 trillion cubic meters, accounting for 17% of the world’s recoverable resources, behind the United States to become the world’s second largest shale gas resource country.
However, due to the fact that at least part of the shale gas was located in the Sichuan-Chongqing area in the early stage, the exploitation was defective, the cost was relatively high, and the profitability did not reach the commercial level.
With the continuous development of shale gas extraction scale and equipment technology, according to industry information network data, the economics of its shale gas extraction are continuously increasing. In 18 years, the cost of a single well has been reduced from 100 million pounds to 60 million to 80 million.When accounting to the unit cost, the depreciation of each gas is about 0.
1 yuan, the operating cost is 0.
5 yuan / square.
The company launched an electric drive fracturing complete set this year. One device can meet the large-displacement shale gas fracturing, which has significant economic advantages and is expected to fully benefit from the improvement of the shale gas boom in the downstream.
OPEC’s production restriction will be postponed in March next 合肥夜网 year, short-term or support oil prices.
OPEC + reached an agreement last year to reduce output by 1.2 million barrels per day per year. At OPEC Vienna this week, countries will continue to extend the production reduction agreement for 9 months to March 2020.
Through Iran and Venezuela, due to US sanctions and other temporary suspensions, OPEC’s production capacity is currently tight, and the rate of enforcement of production restrictions remains high, reaching 156% in six months.
The output of OPEC14 countries in June was 29.6 million barrels, a decrease of 170,000 barrels earlier in May, the lowest since 2014.
In addition, the geopolitical situation in Iran is tense, which may support oil prices in the short term, which is positive for the oil service sector.
Investment suggestion: The company’s net profit is expected to be 10 in 2018-2020.
4.5 billion, 14.
79 ppm and 19.
4.4 billion yuan, corresponding to EPS of 1.
09 yuan, 1.
54 yuan, 2.
Maintain Buy-A rating and 6-month target price of 32.
7 yuan, equivalent to 30 times dynamic price-earnings ratio in 2019.
Risk warning: market competition is intensifying, and the company’s drilling and completion equipment orders exceed expectations.