SSC(SH:600871) EBSCN·2024-06-07 07:02Investment Rating - The report maintains an "Overweight" rating for both A-shares and H-shares of the company [2][3]. Core Views - The company has signed a significant contract worth approximately RMB 7.956 billion with Saudi Aramco, marking a major breakthrough in the Middle Eastern market [1][2]. - The contract represents about 9.95% of the company's expected revenue for 2023, indicating strong growth potential [2]. - The company has been actively expanding its international market presence, with overseas contracts totaling RMB 16.7 billion in 2023, a year-on-year increase of 7.1% [2]. - The oil service industry is experiencing a recovery, supported by high upstream capital expenditures from the parent company, Sinopec, which is expected to continue benefiting the company's domestic operations [2]. Financial Forecasts and Valuation - The company is projected to achieve net profits of RMB 848 million, RMB 1.106 billion, and RMB 1.32 billion for the years 2024 to 2026, respectively, with corresponding EPS of RMB 0.04, RMB 0.06, and RMB 0.07 per share [2][3]. - Revenue is expected to grow from RMB 79.981 billion in 2023 to RMB 99.331 billion by 2026, reflecting a compound annual growth rate (CAGR) of approximately 7.19% [3]. - The report highlights a steady increase in return on equity (ROE), projected to rise from 7.34% in 2023 to 11.68% by 2026 [3].