SSC(SH:600871) EBSCN·2024-04-02 16:00Investment Rating - The report maintains an "Overweight" rating for both A-shares and H-shares of the company [2][3]. Core Views - The company has won a total contract of RMB 3.378 billion for the construction of the Sichuan-East Gas Transmission Pipeline, which represents 4.22% of the company's revenue for 2023, marking a significant breakthrough in domestic market expansion [1]. - The company achieved a record new contract amount of RMB 82.4 billion in 2023, a year-on-year increase of 1.7%, indicating strong market development efforts [1]. - The upstream capital expenditure of the parent company, Sinopec, remains high, with expected expenditures of RMB 77.6 billion in 2024, which will support the company's domestic business growth [1]. Summary by Relevant Sections Financial Performance - The company's revenue is projected to grow from RMB 79.981 billion in 2023 to RMB 99.331 billion by 2026, with a compound annual growth rate (CAGR) of approximately 7.19% [3]. - Net profit is expected to increase from RMB 589 million in 2023 to RMB 1.32 billion by 2026, reflecting a significant growth trajectory [3]. - Earnings per share (EPS) are forecasted to rise from RMB 0.03 in 2023 to RMB 0.07 in 2026 [3]. Market Development - The company has signed contracts worth RMB 51.8 billion with the National Pipeline Network Group in 2023, which is crucial for its market expansion strategy [1]. - The domestic external market contracts amounted to RMB 15.7 billion in 2023, showing a year-on-year growth of 4.7% [1]. Industry Outlook - The oil service industry is experiencing a recovery, driven by increased capital expenditures in the upstream sector due to high oil prices, which is expected to benefit the company [1]. - Global upstream exploration and development capital expenditures are projected to reach approximately USD 607.9 billion in 2024, a year-on-year increase of 5.7% [1].