Summary of Jerry Holdings Conference Call Company Overview - **Company**: Jerry Holdings - **Industry**: Oil and Gas Equipment and Engineering Key Points Project Acquisition - Jerry Holdings secured a natural gas booster EPC project in Algeria worth 6.1 billion RMB, expected to sign a formal contract in August 2025 with a 36-month execution period [2][3][4] - The project consists of 75% design and procurement and 25% construction, with over 70% of core equipment produced in-house [2][3] Financial Projections - Expected gross margin over 20% and net margin over 10% from the Algeria project, contributing over 6 billion RMB in revenue and several hundred million RMB in profit over the next three years [2][4] - Projected net profits for 2025, 2026, and 2027 are 3 billion, 3.4 billion, and 4 billion RMB respectively, with year-on-year growth rates of 15%, 13%, and 17% [3][6] International Business Growth - International revenue is projected to account for 45% of total revenue by 2024, with overseas orders growing at a compound annual growth rate (CAGR) of approximately 50% [2][5][9] - The company has established a strong presence in the Middle East, North America, Central Asia, and North Africa, with the fastest growth in the Middle East and Central Asia [2][5][9] Natural Gas Sector Expansion - Natural gas-related business is rapidly growing, expected to make up about 40% of overseas orders in 2024, with an average annual growth rate exceeding 80% in recent years [2][10] - The company has built a natural gas industrial park to triple production capacity, supporting future equipment production [5][10] Market Positioning - Jerry Holdings has a significant market share in specific products, such as completion equipment in Kuwait, where it reaches 60%-70% [2][11] - The company is strategically addressing tariff risks in North America through local production and capacity layout [3][12] Future Growth Potential - The company’s performance is expected to remain strong against a backdrop of high oil prices, with ongoing expansion in North Africa, the Middle East, and other regions [7][17] - The North American market, while currently only 10% of total revenue, is seen as strategically important, particularly for electric fracturing equipment [12][16] Competitive Advantages - Jerry Holdings' execution capabilities have been recognized through the Algeria project win, enhancing its position in the North African and Middle Eastern integrated oil and gas field development market [8][17] - The Dubai factory, set to be operational by the end of the year, will enhance global competitiveness and address potential tariff issues [13][17] Revenue Streams - The power generation business, while currently small, is expected to grow significantly, with projected revenues reaching 10 billion RMB in the next three to five years [15][16] - The aftermarket for fracturing equipment is anticipated to become a significant growth area starting in 2025 [15][16] Valuation and Investment Opportunity - The company is currently undervalued with a PE ratio of approximately 12-13 times, indicating strong investment potential given the expected growth rates [6][17][18]

Investment Rating - The report maintains an "Overweight" rating for the machinery industry, indicating a positive outlook compared to the overall market performance [4]. Core Insights - The machinery industry is expected to see a moderate recovery in demand in the second half of 2025, driven by equipment upgrades and technological empowerment [4]. - Key companies in the machinery sector are projected to experience varied growth rates in Q2 2025, with notable performances from companies like SANY Heavy Industry (25% growth) and PCB manufacturer Ding Tai Gao Ke (66% growth) [4][5]. - The report highlights three main trends in the robotics sector: the advancement of humanoid robots, the entry of global giants into the robotics field, and the practical application of various robot forms in specific scenarios [4]. - In the rail transit equipment sector, significant investment is expected to continue, with a projected fixed asset investment nearing 900 billion yuan for the year, supported by strong passenger demand [4]. - The engineering machinery sector is approaching a cyclical turning point, with signs of recovery in demand and a favorable environment for new machine sales [4]. - The laser segment is experiencing rapid growth, particularly in general laser applications, driven by technological advancements and increased overseas exports [4]. Summary by Sections Robotics and Components - The humanoid robot industry is progressing towards commercialization, with significant contributions expected from companies like Greentech Harmonic and Wolong Electric Drive [4]. Rail Transit Equipment - In the first half of 2025, China's railway fixed asset investment reached 355.9 billion yuan, a year-on-year increase of 5.5%, with expectations for continued high growth [4]. Engineering Machinery - The engineering machinery sector has seen improved profitability and is positioned for a new sales cycle as construction activity resumes [4]. Laser Technology - General laser demand is rapidly increasing due to high-power technology iterations and new applications in consumer electronics and photovoltaics [4].

Macro Strategy - The impact of real estate on China's economy has significantly weakened, with a projected GDP contribution from the real estate sector of approximately 13 trillion yuan in 2024, accounting for 9.6% of total GDP, down from 16.9% in 2016 [8][9] - Despite negative growth in real estate investment and sales, there is an expectation of stabilization in the market, driven by policies such as special bonds for purchasing existing properties [8][9] Fixed Income - The expected listing price range for the China General Nuclear Power Corporation's convertible bond is between 126.83 and 140.94 yuan, with a subscription rate of 0.0140% [10][11] - The bond has a total issuance scale of 4.9 billion yuan, with a credit rating of AAA and a yield to maturity of 1.66% [10][11] Industry Analysis Jerry Holdings - Jerry Holdings has secured a contract for a natural gas booster station project in Algeria worth approximately 8.5 billion USD, enhancing its presence in the North African oil and gas market [12][14] - The company maintains a profit forecast of 3.03 billion yuan for 2025, with a price-to-earnings ratio of 12, 10, and 9 for 2025-2027 [12][14] Ascentage Pharma - Ascentage Pharma's APG-2575 has received conditional approval in China, marking it as the first domestic Bcl-2 inhibitor, with revenue forecasts of 519 million, 3.215 billion, and 2.095 billion yuan for 2025-2027 [15][16] - The drug is expected to provide a new treatment option for patients with chronic lymphocytic leukemia/small lymphocytic lymphoma [15][16] Chongqing Department Store - The company reported a 9% year-on-year increase in net profit for H1 2025, despite a 10.45% decline in revenue, primarily due to a shift towards new energy vehicles [5][16] - The profit forecast for 2025-2027 is maintained at 1.41 billion, 1.50 billion, and 1.58 billion yuan, with a price-to-earnings ratio of 9, 8, and 8 [5][16] Huace Testing - Huace Testing anticipates a year-on-year net profit growth of 8% to 10% for Q2 2025, driven by traditional business innovations and expansion into new markets [17][18] - The profit forecast for 2025-2027 is set at 1.06 billion, 1.17 billion, and 1.31 billion yuan, with a price-to-earnings ratio of 20, 18, and 16 [17][18] Changjiang Power - The company aims to achieve a power generation target of 300 billion kilowatt-hours in 2025, with profit forecasts of 35.028 billion, 36.715 billion, and 37.087 billion yuan for 2025-2027 [19][20] - The current price-to-earnings ratio is 20.9, 19.9, and 19.7, with a projected dividend yield of 3.35% [19][20]

Group 1: Robotics Industry in Shandong - Shandong plans to exceed 50 billion yuan in robot manufacturing industry scale by 2027, aiming to cultivate over three leading enterprises with output exceeding 2 billion yuan each [2] - The "Action Plan" includes 18 measures covering technology innovation, industry cultivation, financial support, standard construction, talent support, and application promotion [2] - The plan aims to enhance technological innovation capabilities and development quality in the robotics sector, establishing Shandong as a national growth pole for robot R&D and manufacturing [2] Group 2: Low-altitude Economy in Shandong - Shandong ranks third in the nation with over 1,400 operational drone enterprises, showcasing a strong development momentum in the low-altitude economy [3] - The low-altitude industry in Shandong is characterized by integrated manufacturing and service development, with over 400 companies involved in the R&D and manufacturing of general aircraft and drones [3][4] - The province aims to strengthen the low-altitude industry's ecosystem by enhancing product innovation, deepening application promotion, and building a comprehensive industrial ecosystem [4] Group 3: Ecological Compensation in the Yellow River Basin - Shandong received 62.07 million yuan in ecological compensation from Henan for the Yellow River basin, contributing to the improvement of water quality in the region [5] - Since the establishment of the compensation mechanism in 2021, Shandong has received a total of 250 million yuan, promoting collaborative ecological protection efforts between the two provinces [5] Group 4: Employment Measures in Jinan - Jinan has introduced 20 specific measures to promote high-quality and sufficient employment, focusing on economic development, skill enhancement, and support for key groups [6] - The city has maintained an annual urban employment increase of over 170,000 in recent years, positioning itself as a significant employment hub [6] Group 5: Talent Development in Qingdao - Qingdao has implemented 20 measures to optimize the talent development ecosystem, focusing on identifying, supporting, and empowering talent [7] - The measures include financial support for young talents and specialized professionals, aiming to create a nurturing environment for talent growth [7] Group 6: Jerry's Gas Project in Algeria - Jerry Oilfield Services Group announced a project award worth approximately 6.126 billion yuan for the Rhourde Nouss gas boosting station in Algeria [8] - This project marks an expansion of Jerry's oil and gas engineering services in North Africa, aligning with the company's strategic focus on the Middle East and North Africa [8]

Group 1 - Jerry Holdings' wholly-owned subsidiary won an $850 million gas booster station project in Algeria, reflecting the strong competitiveness of Chinese energy companies in the North African market [1][5] - The project, located in the Illizi province, aims to enhance gas production efficiency and processing capacity, and is part of Algeria's 2024 oil and gas block bidding [4][6] - The successful bid led to a significant increase in Jerry Holdings' stock price, with a closing rise of approximately 8%, pushing its market capitalization above 30 billion RMB [1][7] Group 2 - Algeria, as Africa's largest natural gas producer, is actively promoting oil and gas resource development to strengthen its position in the European and global energy markets [5][6] - Sonatrach, Algeria's national oil company, has signed several cooperation agreements with international companies, indicating a strategic direction of open collaboration [5][6] - Jerry Holdings has extensive operational experience in Algeria, and this project aligns with its strategic focus on the Middle East and North Africa, enhancing its brand influence and market position [7][8] Group 3 - The project is expected to provide stable long-term revenue for Jerry Holdings and strengthen its competitiveness in the global energy engineering services market [7][8] - The increasing participation of Chinese energy companies in the global oil and gas market, particularly in Africa and the Middle East, is attributed to their cost advantages and technical capabilities [7][8] - The global demand for natural gas is growing, presenting significant opportunities for Chinese enterprises in resource-rich countries like Algeria [7][8]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has secured an EPC order for a natural gas booster station project in Algeria, valued at approximately 8.5 billion USD, which is expected to enhance production efficiency and gas processing capacity in the region [2][3] - The project marks a significant expansion of the company's oil and gas engineering services in North Africa, strengthening its market position in the integrated development of oil and gas fields [3] - The company's influence in the Middle East and Africa is anticipated to grow, leveraging its manufacturing advantages in natural gas compression equipment and gas turbine generator sets [3] - The company is entering a harvest period in the Middle East market, with several large EPC contracts signed, indicating strong trust from international oil companies in its capabilities [4] Financial Summary - The company's total revenue is projected to grow from 13,912 million RMB in 2023 to 20,195 million RMB by 2027, with a compound annual growth rate (CAGR) of approximately 12.75% [1] - Net profit attributable to shareholders is expected to increase from 2,454 million RMB in 2023 to 3,990 million RMB in 2027, reflecting a CAGR of about 14.25% [1] - The earnings per share (EPS) is forecasted to rise from 2.40 RMB in 2023 to 3.90 RMB in 2027, indicating a strong growth trajectory [1] - The current price-to-earnings (P/E) ratio is projected to decrease from 14.70 in 2023 to 9.04 by 2027, suggesting an attractive valuation over time [1]

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 43.59 CNY [6][12]. Core Insights - The company has won a 6.126 billion CNY natural gas booster station project from Algeria's national oil company, which is expected to enhance its operational performance and accelerate overseas expansion in key regions such as the Middle East and Africa [2][12]. - The project signifies a strategic expansion in North Africa, reinforcing the company's brand influence in the integrated development and construction services market for onshore oil and gas fields [12]. - The report anticipates a shift in the company's core business drivers from oil capital expenditure to gas capital expenditure, with significant contributions expected from important markets in the Middle East and Africa [12]. Financial Summary - Total revenue is projected to grow from 13,912 million CNY in 2023 to 22,149 million CNY by 2027, reflecting a compound annual growth rate (CAGR) of approximately 17.2% [4][13]. - Net profit attributable to the parent company is expected to increase from 2,454 million CNY in 2023 to 4,290 million CNY in 2027, with a CAGR of about 19.3% [4][13]. - Earnings per share (EPS) is forecasted to rise from 2.40 CNY in 2023 to 4.19 CNY in 2027 [4][12]. Market Data - The company's market capitalization is approximately 35,927 million CNY, with a current share price of 35.09 CNY [7]. - The stock has traded within a range of 25.50 CNY to 41.65 CNY over the past 52 weeks [7]. - The price-to-earnings (P/E) ratio is projected to decrease from 14.64 in 2023 to 8.38 by 2027, indicating potential undervaluation [4][12].

Core Viewpoint - Jerry Holdings has won a significant project in Algeria worth approximately 6.126 billion yuan, marking an expansion of its oil and gas engineering services in North Africa, aligning with its strategic focus on the Middle East and North Africa [1][2][4]. Group 1: Project Details - The project awarded to Jerry Holdings involves the EPC realization of the Rhourde Nouss Boosting Project, located in the Illizi province of Algeria, with a total value of about 8.50 billion USD [2]. - The project aims to enhance the production efficiency and gas processing capacity of the Rhourde Nouss gas field by constructing a gas booster station and upgrading the gas collection pipeline network [2][3]. Group 2: Previous Contracts - Earlier in February, Jerry Holdings signed a contract with ADNOC Onshore for an estimated total amount of approximately 9.2 billion USD (about 65.55 billion yuan) for digital transformation projects in the Bab, Bu Hasa, and South East blocks [4][6]. - The ADNOC Onshore operates in a significant oil field area and has a strong financial standing, indicating a robust partnership for Jerry Holdings [6]. Group 3: Financial Performance - Jerry Holdings reported a substantial increase in revenue and net profit for Q1 2025, with revenues of 2.687 billion yuan and a net profit of 466 million yuan, reflecting year-on-year growth of 26.07% and 24.04% respectively [10]. - The company’s overseas business has shown significant results, with 45.20% of its revenue coming from international markets in 2024 [8]. Group 4: Strategic Expansion - To further its business in the Middle East and North Africa, Jerry Holdings has made preparations, including a recent decision to invest 12 million USD in its Middle Eastern subsidiary to establish a high-end oil and gas equipment manufacturing base in Dubai [7]. - The Middle East is identified as a key strategic market for Jerry Holdings, with a comprehensive business layout and significant revenue generation potential [7].

Core Viewpoint - Jereh Corporation has secured a significant overseas project order worth approximately $850 million, marking a strategic expansion in the North African oil and gas engineering services market [2][3][4]. Group 1: Project Details - The order was awarded to Jereh Oil & Gas Engineering Corporation, a wholly-owned subsidiary, by Sonatrach SPA for the EPC Realization of The Rhourde Nouss Boosting Project [3]. - The total contract value includes $629.1 million and 29.358 billion Algerian Dinars, equating to about $850 million or 6.126 billion RMB [3]. Group 2: Financial Performance - Jereh Corporation's net profit attributable to shareholders has shown steady growth, with a year-on-year increase of 24.04% in Q1 2025 [2][4]. - In 2024, the company achieved a total revenue of 13.35 billion RMB, maintaining over 10 billion RMB in revenue for three consecutive years [8]. - The net profit for 2024 reached a historical high of 2.627 billion RMB, continuing a three-year growth trend [8]. Group 3: Global Strategy and Market Position - The project win aligns with Jereh's strategic focus on expanding its presence in the Middle East and North Africa [4]. - The company operates in over 70 countries, with the Middle East being its largest overseas market [5]. - In 2024, nearly half of the new orders were from overseas, reflecting a 65.37% year-on-year growth [5]. Group 4: Research and Development - Jereh's R&D expenses exceeded 500 million RMB in both 2023 and 2024, with a 28.79% increase in Q1 2025 [6]. - The company holds a total of 1,914 effective patents, including 503 invention patents [5][6]. Group 5: Financial Health and Stock Buyback - As of March 2025, Jereh's debt-to-asset ratio stood at 39.48%, with cash reserves of 6.817 billion RMB [9]. - The company announced a stock buyback plan of up to 250 million RMB, with 953,800 shares repurchased by June 30, 2025 [9].

Summary of Key Points Core Viewpoint - The company intends to use self-raised funds to pay for investment project expenses and subsequently replace these with raised funds, ensuring efficient use of capital and smooth project implementation [1][7][8]. Group 1: Fundraising and Allocation - The company successfully raised a total of RMB 2,499,999,974.82 through a non-public issuance of 69,098,949 shares at RMB 36.18 per share, with a net amount of RMB 2,487,483,821.84 after deducting issuance costs [1]. - As of November 30, 2023, the remaining balance for the original investment project was RMB 758.205 million, which will be redirected to a new oil and gas technology service project [2]. Group 2: Project Management and Adjustments - The company held a temporary shareholders' meeting on January 18, 2024, to approve the change of use for the remaining funds from the original project to the new project [2]. - The company has extended the deadline for the digital transformation phase one project and the oil and gas technology service project to December 31, 2027, without changing the investment amounts [3]. Group 3: Use of Self-raised Funds - The company plans to use self-raised funds for initial payments on investment projects, which will later be replaced by raised funds to enhance efficiency [4][5]. - The rationale for using self-raised funds includes compliance with banking regulations, operational efficiency, and cost reduction in procurement [4][5]. Group 4: Operational Procedures - A detailed operational process has been established for using self-raised funds, including contract signing, payment applications, and monthly reporting to the sponsor institution [6]. - The financial department will maintain a special ledger to track the replacement of self-raised funds with raised funds, ensuring transparency and accountability [6]. Group 5: Approval and Oversight - The board of directors and the supervisory board have approved the use of self-raised funds, confirming that the process adheres to legal and regulatory requirements [7]. - The sponsor institution has conducted a review and found no issues with the company's plan to use self-raised funds, ensuring that shareholder interests are protected [7][8].