Jereh Group(SZ:002353) Changjiang Securities·2024-10-29 02:36Investment Rating - The report maintains a "Buy" rating for the company [10]. Core Views - The company has shown improvement in profitability and is expected to reach a performance inflection point due to continuous breakthroughs in overseas markets [5][7]. - The company reported a revenue of 8.047 billion yuan for the first three quarters of 2024, a decrease of 8.1% year-on-year, while the net profit attributable to the parent company was 1.598 billion yuan, an increase of 2.2% year-on-year [5][6]. - The company has a sufficient backlog of orders, with a significant increase in contract liabilities, indicating positive support for future operating performance [7][8]. Summary by Sections Financial Performance - In Q3 2024, the company achieved a revenue of 3.09 billion yuan, a decrease of 7.38% year-on-year, and a net profit of 510 million yuan, a decrease of 2.04% year-on-year [5][6]. - The gross margin for the first three quarters of 2024 was 35.02%, an increase of 1.51 percentage points year-on-year, with Q3 gross margin at 33.71%, up 3.74 percentage points year-on-year [6]. - Operating cash flow significantly improved to 1.468 billion yuan from a negative 779 million yuan in the same period last year [6]. International Expansion - The company has made significant strides in international markets, including contracts for major projects in Iraq and Central Asia, and has successfully delivered equipment in North America [7]. - The company signed a total engineering contract for seven gas booster stations with Bahrain National Oil Company, amounting to approximately 3.16 billion USD (about 2.2 billion yuan) [7]. Market Outlook - The demand for unconventional oil and gas extraction in China is increasing, and the company, as a leading provider of fracturing equipment, is expected to benefit significantly from this trend [8]. - The projected earnings per share (EPS) for 2024-2026 are 2.65 yuan, 3.16 yuan, and 3.64 yuan, with corresponding price-to-earnings (PE) ratios of 12.7X, 10.7X, and 9.2X based on the closing price on October 25, 2024 [8].