Investment Rating - The report maintains a "Buy" rating for the company with a target price of 20.46 CNY based on a 22x P/E ratio for 2026 [3][6]. Core Views - The drilling services sector has shown significant recovery, driven by high oil prices, which are expected to remain elevated due to geopolitical tensions affecting oil production and logistics [2][11]. - The company's earnings per share (EPS) forecasts for 2026, 2027, and 2028 have been adjusted to 0.93 CNY, 1.00 CNY, and 1.04 CNY respectively, reflecting a positive outlook for profitability [3][11]. - The report highlights a notable increase in the utilization rate of drilling platforms, which reached 91.0% in 2025, contributing to revenue growth in the drilling services segment [11]. Financial Performance Summary - Revenue projections for the company are as follows: - 2024: 48,302 million CNY - 2025: 50,282 million CNY (up 4.1% YoY) - 2026: 51,843 million CNY (up 3.1% YoY) - 2027: 53,951 million CNY (up 4.1% YoY) - 2028: 55,398 million CNY (up 2.7% YoY) [5][14] - Operating profit is expected to grow from 4,836 million CNY in 2024 to 6,776 million CNY in 2028, with a peak growth rate of 15.7% in 2026 [5][14]. - Net profit attributable to the parent company is projected to increase from 3,137 million CNY in 2024 to 4,978 million CNY in 2028, with a significant growth of 22.5% in 2025 [5][14]. - The company's gross margin is expected to improve from 15.7% in 2024 to 17.9% in 2028, indicating better cost management and operational efficiency [5][14].

Macro Overview - The overall GDP growth target for 2026 is set at 4.5%-5%, indicating a shift towards high-quality development rather than short-term growth[9] - Inflation targets are set at 2%, with a focus on supply-side reforms to address "strong supply, weak demand" issues[10] - The fiscal deficit is maintained at 4%, with local special bonds and long-term bonds allocated at CNY 4.5 trillion and CNY 1.3 trillion respectively[10] Market Performance - The market experienced a decline with a daily average trading volume of CNY 24,987 billion, down CNY 1,459 billion week-on-week[8] - The CPI and PPI for February exceeded expectations, with CPI showing a month-on-month increase and PPI recording positive growth for five consecutive months[8] - Exports in January-February increased by 21.8% year-on-year, significantly above expectations, supported by industrialization in southern countries[8] Fixed Income and Monetary Policy - The bond market showed a mixed performance with short-term rates declining due to liquidity easing, while long-term rates remained under pressure from inflation data[8] - The central bank implemented a net withdrawal of CNY 1,011 billion last week, with expectations of further easing in short-term liquidity[8] Geopolitical and Global Market Impact - The ongoing US-Iran conflict has led to a high oil price center, which is expected to remain elevated for an extended period[8] - The US stock market saw declines, with the Dow Jones down 1.99% and the S&P 500 down 1.6%[8] - The upcoming Federal Reserve meeting may increase market volatility due to potential adjustments in interest rate projections[8]