Jereh Group(SZ:002353)2024-09-05 04:41Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [2][4]. Core Insights - The company reported a significant improvement in cash flow and exceeded profit expectations for Q2 2024, with a net profit of 1.088 billion yuan, representing a year-over-year increase of 4.33% [1][2]. - Revenue for H1 2024 was 4.957 billion yuan, down 8.54% year-over-year, primarily due to the execution of large overseas EPC orders in 2023 and delays in shipping affecting revenue recognition [1][2]. - The company has a strong order backlog, with new orders amounting to 7.179 billion yuan in H1 2024, an increase of 18.92% year-over-year, and a total order value of 9.191 billion yuan, up 21.75% from the beginning of the year [2]. Revenue and Profitability - H1 2024 revenue breakdown shows that oilfield services and equipment accounted for 4.163 billion yuan, maintaining a stable contribution, while oilfield engineering and equipment revenue dropped significantly [1][2]. - The gross margin improved to 35.83% in H1 2024, up 0.15 percentage points year-over-year, contributing to the positive net profit growth despite a decrease in foreign exchange gains [2][4]. Shareholder Returns - The company is committed to shareholder returns, having repurchased 5.8736 million shares, representing 0.57% of total shares, and proposed a cash dividend of 1.2 yuan per 10 shares for the first time as a mid-year dividend [2][4]. Future Outlook - The company is expected to maintain strong profitability with projected net profits of 2.793 billion yuan, 3.263 billion yuan, and 3.827 billion yuan for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 11, 9, and 8, indicating a favorable valuation [2][4].