Jereh Group(SZ:002353) Huaan Securities·2024-09-09 03:16Investment Rating - The investment rating for the company is "Buy" (首次) [1] Core Views - The company is positioned to benefit from the expansion of oil and gas capital expenditures, particularly in the fracturing equipment sector [1][3] - The global oil service market is projected to reach USD 328 billion in 2023, a year-on-year increase of 12.4%, driven by high demand in the oil and gas industry and unconventional oil and gas development [1][3] - The company has a strong competitive advantage in equipment and technical services, aiming to become a leading provider in the oil and gas equipment manufacturing and engineering services [1][3] Summary by Sections Company Overview - The company, established in 1999, is a diversified group focused on oil and gas equipment manufacturing and technical services, with a significant presence in environmental engineering and new energy sectors [1][12] - The company has achieved a revenue of CNY 139.12 billion in 2023, with oil and gas equipment manufacturing and technical services contributing CNY 117.56 billion, accounting for 84.5% of total revenue [1][28] Market Dynamics - The oil and gas industry is experiencing a capital expenditure expansion, with oil companies showing strong investment intentions due to high oil prices [39] - The domestic oil production has increased from 189 million tons in 2018 to 209 million tons in 2023, while natural gas production is expected to reach 246 billion cubic meters by 2024 [39][42] Financial Performance - The company forecasts revenue growth from CNY 153.55 billion in 2024 to CNY 191.51 billion in 2026, with net profits projected to rise from CNY 27.71 billion to CNY 38.29 billion during the same period [3][5] - The company has maintained a stable gross margin of around 35% and a net margin above 15% over the past five years, indicating strong profitability [28][32] Innovation and R&D - The company invested CNY 511.20 million in R&D in 2023, a year-on-year increase of 39.33%, and has received 372 new patents, enhancing its technological capabilities [17][20] - Key innovations include the world's first electric-driven fracturing equipment and high-capacity gas compression systems, which significantly improve operational efficiency [20][21] Order and Market Expansion - The company secured new orders worth CNY 139.56 billion in 2023, reflecting a year-on-year growth of 9.66%, with a strong focus on expanding its overseas market presence [36][39] - The overseas revenue accounted for 46.85% of total revenue in 2023, with a compound annual growth rate of 26.82% from 2018 to 2023 [28][36]