Summary of Jerry Holdings Conference Call Company Overview - **Company**: Jerry Holdings - **Industry**: Oil and Gas Equipment and Engineering Key Points Project Acquisition - Jerry Holdings secured a natural gas booster EPC project in Algeria worth 6.1 billion RMB, expected to sign a formal contract in August 2025 with a 36-month execution period [2][3][4] - The project consists of 75% design and procurement and 25% construction, with over 70% of core equipment produced in-house [2][3] Financial Projections - Expected gross margin over 20% and net margin over 10% from the Algeria project, contributing over 6 billion RMB in revenue and several hundred million RMB in profit over the next three years [2][4] - Projected net profits for 2025, 2026, and 2027 are 3 billion, 3.4 billion, and 4 billion RMB respectively, with year-on-year growth rates of 15%, 13%, and 17% [3][6] International Business Growth - International revenue is projected to account for 45% of total revenue by 2024, with overseas orders growing at a compound annual growth rate (CAGR) of approximately 50% [2][5][9] - The company has established a strong presence in the Middle East, North America, Central Asia, and North Africa, with the fastest growth in the Middle East and Central Asia [2][5][9] Natural Gas Sector Expansion - Natural gas-related business is rapidly growing, expected to make up about 40% of overseas orders in 2024, with an average annual growth rate exceeding 80% in recent years [2][10] - The company has built a natural gas industrial park to triple production capacity, supporting future equipment production [5][10] Market Positioning - Jerry Holdings has a significant market share in specific products, such as completion equipment in Kuwait, where it reaches 60%-70% [2][11] - The company is strategically addressing tariff risks in North America through local production and capacity layout [3][12] Future Growth Potential - The company’s performance is expected to remain strong against a backdrop of high oil prices, with ongoing expansion in North Africa, the Middle East, and other regions [7][17] - The North American market, while currently only 10% of total revenue, is seen as strategically important, particularly for electric fracturing equipment [12][16] Competitive Advantages - Jerry Holdings' execution capabilities have been recognized through the Algeria project win, enhancing its position in the North African and Middle Eastern integrated oil and gas field development market [8][17] - The Dubai factory, set to be operational by the end of the year, will enhance global competitiveness and address potential tariff issues [13][17] Revenue Streams - The power generation business, while currently small, is expected to grow significantly, with projected revenues reaching 10 billion RMB in the next three to five years [15][16] - The aftermarket for fracturing equipment is anticipated to become a significant growth area starting in 2025 [15][16] Valuation and Investment Opportunity - The company is currently undervalued with a PE ratio of approximately 12-13 times, indicating strong investment potential given the expected growth rates [6][17][18]

Industry Overview - Recent surge in oil prices with Brent crude surpassing $70 for the first time in over two months [1] - Increased geopolitical tensions in the Middle East, particularly following the reduction of the U.S. diplomatic presence in Iraq [1] - China is projected to invest $168 billion in foreign energy projects from 2020 to 2024, with $50.28 billion allocated to six Middle Eastern countries [1] - Major oil and gas projects in these countries amount to $29.15 billion, showing a year-on-year growth trend [1] - The Middle East oil service market is valued at over $100 billion, with the oil service equipment market at least $10 billion [1] - Chinese oil service equipment companies are in the early stages of market penetration in the Middle East, indicating high growth potential with low market share [1] Company Insights - Jerry Holdings is recognized as a leading domestic private oil service equipment provider, excelling in completion equipment globally [2] - Potential Energy is identified as a leading third-party private oil and gas exploration and production company in China [2]