ZPEC(603619) 国信证券·2024-11-04 13:44Investment Rating - The report maintains an "Outperform the Market" rating for Zhongman Petroleum (603619.SH) with a target price of 21.53 yuan [1][10][9]. Core Views - The company's crude oil production is steadily increasing, with a significant contribution expected from its projects in Iraq. The net profit attributable to shareholders for Q3 2024 increased by 41.62% year-on-year [1][4]. - For the first three quarters of 2024, the company achieved a revenue of 3.051 billion yuan, a year-on-year increase of 6.87%, and a net profit of 668 million yuan, up 12.65% year-on-year [1][4]. - The report highlights the stable growth in oil production from domestic fields and the rapid capacity increase in Kazakhstan, which is expected to drive profitability [1][7]. Financial Performance Summary - In Q3 2024, the company reported revenues of 1.133 billion yuan, a year-on-year increase of 13.23% and a quarter-on-quarter increase of 2.02%. The net profit for the same period was 241 million yuan, reflecting a year-on-year increase of 41.62% but a quarter-on-quarter decrease of 5.84% [1][4]. - The gross margin and net margin for the first three quarters of 2024 were 47.73% and 22.50%, respectively, with slight year-on-year changes [5][1]. - The company’s expenses increased by 1.58 percentage points to 15.78%, primarily due to rising financial and sales costs [5][1]. Production and Project Developments - The Wensu oilfield in China has shown stable production growth, with Q3 2024 production reaching 170,000 tons, a year-on-year increase of 9.18%. The Kazakhstan project saw a remarkable year-on-year production increase of 122.69% in Q3 2024 [7][1]. - The company signed a 20-year development contract for the EBN and MF blocks in Iraq, with estimated geological reserves of approximately 1.722 billion tons of oil and 136.2 billion cubic meters of gas [8][1]. Profit Forecasts - The report adjusts the profit forecasts downward, projecting revenues of 4.339 billion yuan for 2024, 5.258 billion yuan for 2025, and 6.321 billion yuan for 2026. The net profit forecasts are 955 million yuan for 2024, 1.172 billion yuan for 2025, and 1.531 billion yuan for 2026 [9][2]. - The earnings per share (EPS) are expected to be 2.07 yuan for 2024, 2.53 yuan for 2025, and 3.31 yuan for 2026, with corresponding price-to-earnings (PE) ratios of 10.4, 8.5, and 6.5 [9][2].