Jereh Group(SZ:002353) Southwest Securities·2024-04-28 08:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 2.13 billion yuan in Q1 2024, a year-on-year decrease of 6.5%, while the net profit attributable to shareholders was 380 million yuan, an increase of 6.8% year-on-year. The revenue decline was attributed to the delivery cycle of certain projects [2] - The company is successfully expanding its overseas market, with a strong order backlog supporting its annual growth. In the Middle East, it has established long-term stable partnerships with strategic clients such as Saudi Aramco and Abu Dhabi National Oil Company, leading to an increasing market share for high-end equipment [2] - The gross margin remained stable at 35.7%, with a year-on-year increase of 0.4 percentage points. The net profit margin was 18.0%, up 2.1 percentage points year-on-year, while the expense ratio decreased significantly to 13.5%, down 2.0 percentage points year-on-year [2] - The oil service industry is experiencing upward momentum, with a projected 5.7% year-on-year increase in global upstream exploration and development capital expenditure in 2024. The global oilfield service market is expected to reach 328 billion USD, a year-on-year increase of 7.1% [2] Summary by Relevant Sections Financial Performance - In Q1 2024, the company achieved a revenue of 2.13 billion yuan, a decrease of 6.5% year-on-year, and a net profit of 380 million yuan, an increase of 6.8% year-on-year [2] - The company signed new contracts worth 13.96 billion yuan in 2023, a year-on-year increase of 9.7%, with a backlog of 7.55 billion yuan at the end of 2023 [2] - The projected net profit for 2024-2026 is 3.03 billion, 3.75 billion, and 4.24 billion yuan, respectively, with corresponding EPS of 2.96, 3.66, and 4.14 yuan [3] Market Outlook - The company is focusing on key countries and regions for overseas market expansion, with successful deliveries of high-end products in North America [2] - The demand for unconventional oil and gas development highlights the advantages of electric-driven technology, which significantly reduces operational costs [2] Valuation Metrics - The projected PE ratios for 2024-2026 are 11, 9, and 8 times, respectively, indicating a compound annual growth rate of 20% for net profit over the next three years [3]