Jereh Group(SZ:002353) Soochow Securities·2024-04-26 14:30Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's Q1 2024 performance slightly exceeded market expectations, with a year-on-year revenue growth of 7% and a net profit increase of 6.84% [3] - The company is accelerating its overseas market expansion, particularly in North America, where there is significant demand for electric fracturing equipment [5] - A new employee stock ownership plan has been introduced, reflecting the company's confidence in its growth prospects [6] Financial Performance Summary - In Q1 2024, the company achieved total revenue of 2.131 billion yuan, a year-on-year decrease of 6.52%, primarily due to a one-time revenue recognition from a KOC oil and gas engineering project in 2023 [3] - The net profit attributable to shareholders was 375 million yuan, with a year-on-year growth of 6.84% [3] - The company's gross margin and net margin for Q1 2024 were 35.7% and 18.0%, respectively, indicating stable profitability [4] Market Expansion Summary - In 2023, approximately 36.8% of the company's new orders came from overseas markets, showing rapid growth [5] - The North American market presents a significant opportunity due to a ten-year replacement cycle for fracturing equipment, with the company having secured its first electric fracturing equipment order in North America [5] - The company has established long-term partnerships with major clients in the Middle East, contributing to positive performance trends [5] Profit Forecast and Valuation - The report forecasts the company's net profit attributable to shareholders for 2024-2026 to be 2.7 billion, 3.3 billion, and 3.7 billion yuan, respectively [6] - The current market valuation corresponds to P/E ratios of 12, 10, and 9 for the years 2024-2026 [6]