Investment Rating - The report maintains an "Accumulate" rating for both A-shares and H-shares of the company, with current prices at 3.22 CNY and 1.04 HKD respectively [1]. Core Insights - The company has shown steady growth in net profit and gross margin over the past 25 years, with a record high in new contract amounts [7]. - In 2025, the company achieved total revenue of 80.7 billion CNY, a slight decrease of 0.5% year-on-year, while net profit attributable to shareholders was 660 million CNY, an increase of 4.3% year-on-year [5]. - The company plans to sign new contracts worth 92.5 billion CNY in 2026, reflecting a proactive approach in a volatile market environment [8]. - The company is focusing on technological innovation and has made significant advancements in core technologies, including the development of a proprietary scientific drilling system [8]. - The company is set to issue bonds up to 5 billion CNY to optimize financing channels, which is expected to enhance strategic collaboration with its parent company [9]. - The oil engineering industry is expected to maintain a favorable outlook due to ongoing capital expenditures from the parent company, Sinopec [10]. Financial Performance Summary - In 2025, the company reported a gross margin of 8.1%, an increase of 0.3 percentage points year-on-year, and operating cash flow of 6.65 billion CNY, a net inflow increase of 3.55 billion CNY [7]. - The company’s new contract amount reached 95.6 billion CNY in 2025, marking a 4.8% year-on-year increase, with significant contributions from both domestic and overseas markets [8]. - The financial forecasts for 2026 to 2028 predict net profits of 805 million CNY, 911 million CNY, and 1.014 billion CNY respectively, with corresponding EPS of 0.04, 0.05, and 0.05 CNY per share [11]. Industry Outlook - The oil engineering sector is expected to remain robust, supported by the parent company's high upstream capital expenditures and favorable policies aimed at increasing oil reserves and production [10]. - The geopolitical landscape in the Middle East poses challenges, but the importance of energy supply security in China is becoming increasingly evident [10].

Core Viewpoint - The company emphasizes the importance of safety production during the New Year holiday by implementing strict management and oversight measures to ensure stable drilling operations [1] Group 1: Safety Measures - The company organized a special safety production inspection before the holiday, focusing on risk control and hidden danger management to maintain safe drilling operations [1] - A pre-holiday safety production meeting was held to deploy safety work and conduct special inspections, with identified issues managed through a "closed-loop" system [1] - The company strictly enforced a duty system for leadership, with all members of the Xinjiang leadership team actively participating in on-site supervision and inspections [1] Group 2: Regulatory Mechanisms - The company implemented a "three-in-one" regulatory mechanism, utilizing safety and environmental inspections, video monitoring, and on-site HSE supervision to promptly halt violations [1] - Strict adherence to the "four musts and four vetoes" management requirements was enforced, along with a dual monitoring system of "on-site + video" to ensure high-risk operations are effectively controlled [1]

Core Insights - The article highlights the successful implementation of a self-developed "Drilling Platform Stability Calculation Intelligent System" by Shengli Oil Engineering Company, which allows for significant operational efficiency in drilling activities [1] Group 1: Technological Advancements - The new system enables the drilling platform to position itself at the well site five hours earlier than previously possible, achieving simultaneous operations of pulling piles, towing, positioning, and ballasting on the same day [1] - The system utilizes digital and intelligent methods, relying on DeepSeek artificial intelligence programming to create a visualized stability calculation model based on the platform's structural layout [1] Group 2: Safety and Efficiency - The intelligent system constructs a dynamic load distribution framework across the entire platform, categorizing multiple areas based on structural layout and establishing three input modules with 68 load input units to accurately cover load positions [1] - It features robust analytical capabilities that allow for comprehensive calculations of operational loads, providing clear visibility of stability parameters such as draft at the four corners and platform coordinates, thus enhancing the management of platform stability [1]

Core Insights - The company has achieved recognition for four wells as "quality wells" in November, bringing the total to 12 for the year [1] Group 1: Performance and Achievements - The Tarim branch of Shengli Petroleum Engineering Company has been actively engaged in a labor competition aimed at improving speed and quality, focusing on safety, technology, management, risk prevention, and benefit protection [1] - The company has established a three-tier responsibility system to enhance technical management and ensure quality in well construction [1] Group 2: Technical Innovations - In the construction of the YQ5-45DH well, the 70751 team optimized dual-branch horizontal well technology, achieving a drilling cycle that was 12.71 days ahead of the design, with a reduction rate of 20.17% [2] - For the side-drilling of the TH12343CH2 well, the 70588 team adjusted drilling fluid properties and reinforced blockage measures, resulting in a drilling cycle of 15.08 days, with a reduction rate of 11.3% [2] - The 70120 team utilized a "pre-bent tool combination + micro-expansion tool" in the TH122155H well, achieving a drilling cycle reduction rate of 8.03% [2] - The 70798 team implemented debris rock well technology in the S105-18X well, achieving a drilling cycle savings rate of 5.8% [2]

Core Insights - The recent completion of the Amphion system drilling package equipment training platform by the technical team of Victory Oil Engineering Company fills a significant gap in specialized training hardware for the industry, providing strong support for technical learning and talent development related to the Amphion system [1][2] Group 1 - The Amphion system serves as the "brain" of NOV drilling package equipment, featuring a complex architecture that integrates networking, information technology, and automation functions, which presents challenges in mastering hardware and software principles and fault diagnosis [1] - The newly built training platform is equipped with a single board machine and Wago input/output peripheral devices that simulate actual equipment scenarios, effectively addressing practical learning challenges [2] - The platform allows operators to conduct simulated operations and process training, enhancing practical skills, while technical personnel can perform signal tracking, fault diagnosis, system maintenance, and functional testing to gain a deeper understanding of the system's underlying logic [2]

Core Viewpoint - The successful application of the bionic crawling resistance reduction tool in drilling operations marks a significant advancement in drilling technology for offshore oil extraction, enhancing efficiency and reducing costs [1] Group 1: Technology Development - The bionic crawling resistance reduction tool was developed as a key research project by Sinopec Petroleum Engineering Company [1] - The tool mimics the movement of segmented animals like earthworms to optimize friction reduction in narrow spaces, thereby improving load transfer efficiency during drilling [1] Group 2: Operational Success - The tool was successfully tested in the Chengbei 22H-19 well, achieving drilling from 2771 meters to 3189 meters [1] - The directional inclination rate improved by over 100% compared to the upper wellbore, validating the tool's effectiveness in reducing directional resistance [1] Group 3: Economic Impact - The application of this tool is expected to enhance mechanical drilling speed, shorten well construction periods, and reduce drilling costs significantly [1] - The field test data will provide scientific support for future technological advancements in drilling operations [1]

Core Viewpoint - The company has implemented targeted practical training and a systematic approach to enhance operational efficiency and safety within its teams, leading to significant improvements in performance and safety standards [1][2]. Group 1: Training and Development - The engineering team has adopted the principle of "supplementing what is lacking and practicing what is needed," utilizing pre-shift meetings and targeted training sessions to align skill development with job requirements [1]. - The team has achieved a transformation in the "three basics" construction from foundational work to efficiency enhancement, resulting in increased team vitality [1]. Group 2: Safety and Quality Control - A notable incident involved the identification of a major safety hazard by the deputy driller, leading to the creation of a comprehensive maintenance guide that serves as a training tool [1]. - Safety practices are ingrained in the team's culture, with detailed pre- and post-shift discussions on equipment and regular emergency drills reinforcing a robust safety framework [1]. Group 3: Performance Metrics - The engineering team has implemented a "production task assignment order" and established a "daily reflection and team summary" system, fostering healthy competition among four teams [2]. - The platform has achieved significant operational milestones, including four instances of daily drilling exceeding 1,000 meters and a 1.65% reduction in the average construction cycle for the Chengbei 22H well group, earning the company’s inaugural Victory Iron Army medal [2].

Core Viewpoint - The company has implemented comprehensive safety management measures across its offshore drilling platforms, focusing on risk reduction and enhancing operational safety through innovative technologies and systematic processes [1][2][4][5]. Group 1: Safety Management Enhancements - The company has installed a central anti-slip cone and long edge cone on the new Victory Five platform to eliminate the risk of slippage during well positioning [1] - A total of 142 safety hazards were identified and addressed through a checklist management system, ensuring a closed-loop management approach [1] - The company has conducted 96 safety activities onshore and 656 offshore to reinforce safety responsibilities [2] Group 2: Technological Innovations - The company has upgraded its offshore personnel dynamic management system, utilizing facial recognition and automatic card issuance for real-time personnel tracking [2] - Development of a digital stability calculation system for drilling platforms aims to automate and enhance safety during high-risk operations [4] - The introduction of a video monitoring system for generator rooms and real-time draft monitoring is part of the company's strategy to improve operational safety [4] Group 3: Risk Reduction Strategies - The company has established a three-tier inspection checklist for mobile platform operations to ensure quality and effectiveness in safety checks [4] - A focus on reducing high-risk operations has led to the implementation of measures that limit personnel on-site during critical tasks, achieving over 50% reduction in lifting operations [5][6] - The company has developed specialized tools and techniques to minimize risks associated with lifting operations, including the use of adjustable height vehicles and hydraulic cutting devices [6]

Core Viewpoint - The Victory Oil Engineering Company's Tool Technology Service Center has made significant advancements in drilling efficiency and safety through technological upgrades, innovative management models, and collaborative mechanisms. Group 1: Technological Advancements - The center has promoted the application of large-diameter, high-torsion-resistant drill tools, optimizing drill rod structures and breaking traditional design limitations, which significantly enhances the mechanical performance of connections [1] - Optimizations in the internal flow structure of drill rods have reduced drilling fluid flow resistance, leading to a decrease in circulation pressure loss, with improvements noted in 84 wells, increasing flow rates by 2 to 4 liters per second and reducing pump pressure by 0.8 to 1.2 MPa per kilometer [1] Group 2: Cost Reduction and Efficiency - The center is focusing on the re-utilization of old drill rods, employing cubic boron nitride tools for efficient removal of wear-resistant bands, which lays the groundwork for subsequent welding processes [2] - Innovations in welding joint materials have allowed for the repair of old drill rods to meet the technical requirements of new heavy drill rods, facilitating a more economical and flexible solution for drill supply [2] Group 3: Digital Transformation - A comprehensive lifecycle management system for drill tools has been developed, utilizing high-performance chips and passive RFID technology for identity tracking, creating a unified database for drill management [2] - This system enhances the precision and efficiency of quality tracking, safety risk warnings, service life monitoring, and remaining life analysis, thereby supporting drilling efficiency through improved data management [2] Group 4: Collaborative Mechanisms - The center has established a close collaborative mechanism with drilling companies, focusing on information sharing and joint problem-solving to ensure timely identification and resolution of issues during drill usage [3] - Joint field verification and optimization efforts are conducted to enhance the precision management, preventive maintenance capabilities, and performance stability of drill tools throughout their service life [3] Group 5: Future Directions - The center aims to continue exploring new paths for efficiency and innovation in drill technology and management, contributing to the company's high-quality development [3]

Group 1 - The core viewpoint emphasizes the importance of chemical agents in ensuring efficient, safe, and environmentally friendly operations in oil and gas exploration and development, highlighting the direct relationship between the stability of the supply chain and the production efficiency and safety of oil engineering companies [1] Group 2 - The company has established a dynamic pricing mechanism to address the challenges posed by frequent price fluctuations and regional differences in oilfield chemical agents, transitioning from a static pricing model to a dynamic response and process control approach [2] - A specialized task force was formed to focus on product pricing logic, cost composition, and market monitoring, leading to the development of a scientific pricing formula that incorporates various cost factors [2] - The new pricing mechanism has significantly improved the precision and timeliness of price control, effectively mitigating cost risks associated with market volatility [2] Group 3 - The company has implemented a centralized storage and distribution model for key fracturing agents, transitioning from a decentralized management approach to a unified regional control and delivery system [3] - A standardized management system covering the entire process from storage to delivery has been established to ensure quality and efficiency [3] - The company is conducting research on an inventory optimization data model to balance sufficient inventory with cost efficiency, with results expected to be applied by 2026 [3] Group 4 - To address potential capacity bottlenecks for key materials, the company has proactively established a backup warehouse in Weifang, Shandong, to enhance emergency stock and rapid response capabilities, expected to be fully operational by 2026 [4] Group 5 - The company is focusing on promoting its internal advantageous products to enhance its self-controllable capabilities and overall competitiveness, with significant efforts made to support the "Victory Tiangong" brand of oilfield chemical agents [6] - Successful collaboration with Sinopec has led to the inclusion of several "Victory Tiangong" products in Sinopec's internal advantageous product catalog, facilitating market access [6] - The company has established long-term supply agreements with internal units, creating a robust internal collaboration framework for research, trial, and sales [6] Group 6 - The optimization of internal supply chain processes has significantly improved the response speed and service assurance levels for "Victory Tiangong" products, enhancing market competitiveness [7] - The company has achieved breakthroughs in key nodes of the oilfield chemical agent supply chain management through a combination of pricing mechanism innovation, inventory model optimization, and strengthened industrial collaboration [7] - The company aims to continue enhancing supply chain lean management and collaborative efficiency to address challenges in service assurance, ultimately striving to become a technology-driven comprehensive service provider in reservoir management [7]