Summary of Jerry Corporation's Conference Call Company Overview - **Company**: Jerry Corporation - **Industry**: Oil and Gas Equipment Key Points Financial Performance - In the first half of 2025, Jerry Corporation achieved a revenue growth rate of **39%**, with a non-recurring net profit growth of **34%** [2][4] - Operating cash flow net amount increased nearly **200%** year-on-year to **3.1 billion** [2][4] - The company’s revenue from overseas business is projected to rise from **28%** in 2021 to **45%** in 2024 [2][4] Order Growth - New orders in 2024 increased by **30%** year-on-year, with overseas orders showing significant growth, now accounting for over half of total orders [2][4][5] - The overall order growth rate for Jerry Corporation is expected to maintain above **30%** in the first eight months of 2025 [4][5] Market Expansion - The Middle East is identified as the most significant market for Jerry Corporation, with over **30%** of overseas orders coming from this region [8][9] - The company has been expanding into North Africa, recently securing a **6 billion** RMB EPC project in Algeria [7][8] Product Structure Optimization - The optimization of product structure has led to nearly **50%** of revenue coming from natural gas-related businesses, reducing the impact of oil price fluctuations [2][6] - Natural gas-related orders have a compound annual growth rate exceeding **80%**, primarily driven by demand in the Middle East and Asia-Pacific [6][9] Competitive Position - Jerry Corporation is recognized as a leading player in the oil and gas equipment sector, with a strong presence in both domestic and international markets [3][13] - The company has established a fully localized production capability in North America, with significant growth expected in electric fracturing and gas turbine power generation businesses [10][13] Future Outlook - The company anticipates a performance growth rate of **15-20%** from 2025 to 2027, supported by a strong order delivery schedule [4][11] - The correlation between the company’s performance and oil prices is expected to decrease, enhancing its investment value [11][12] Strategic Advantages - Jerry Corporation has a competitive edge due to its resource integration, management capabilities, and shorter delivery cycles compared to competitors [9][13] - The company’s strong reputation and influence in the Middle East, particularly after successful project deliveries, position it well for future growth [9][10] Additional Insights - The company’s focus on EPC (Engineering, Procurement, and Construction) models has strengthened its performance stability and order growth capacity [3][4] - The ongoing global energy transition and geopolitical factors are expected to further boost demand for natural gas, benefiting Jerry Corporation [8][9]

Summary of Jerry Corporation Conference Call Company Overview - Jerry Corporation has shifted its growth focus towards natural gas operations, particularly in the Middle East and Central Asia, significantly increasing its overseas order proportion and reducing reliance on oil price fluctuations, transforming into a comprehensive energy platform company [2][3][4]. Key Industry Insights - The Middle East and Central Asia are identified as core regions for future order growth, with compound annual growth rates (CAGR) of over 80% and 50% respectively in recent years. By 2024, these regions are expected to account for 70% of total orders, primarily for natural gas compressors and EPC projects [2][4][5]. - North America represents about 10% of total orders, with limited impact from tariffs. The growth potential for electric fracturing equipment is lower than expected, while the generator business shows higher growth potential, projected to reach 10 billion yuan in the next 3-5 years [2][4][6]. Financial Performance - In the first half of 2025, revenue from EPC projects and natural gas compressors saw significant year-on-year growth of 100% and 90% respectively, indicating a stable revenue release [2][7]. - The company anticipates a 20% increase in overall profit for 2025, with a projected growth rate of 30% for 2026, suggesting a strong acceleration in performance release [4][12]. Market Dynamics - The demand for natural gas in the Middle East is rapidly increasing, driven by economic transformation, oil-to-electricity policies, and adjustments in Europe's energy structure. Jerry Corporation has substantial room for market share growth in this region, with market conditions expected to remain favorable until 2027-2028 [2][8]. - The company’s market share in the Middle East is currently below 5%, indicating significant growth potential despite the ongoing transition in energy sources [8]. Challenges and Solutions - Jerry Corporation faces challenges related to insufficient production capacity for natural gas compressors, leading to extended delivery cycles. To address this, the company is expanding its Yantai factory and constructing a new facility in the Middle East, aiming for full production capacity by 2025-2026 [4][11]. - The reliance on European suppliers for key components of natural gas compressors adds complexity to the expansion efforts, but the company is actively working to mitigate these issues [11]. Investment Outlook - The current market conditions and the company's strategic focus on natural gas present a favorable investment opportunity. With stable and growing orders, the company’s valuation is expected to rise, making it an opportune time to invest in Jerry Corporation stock [12][13].

Core Viewpoint - The company has achieved significant growth in revenue and net profit in the first half of 2025, indicating strong operational performance and market demand [4]. Group 1: Financial Performance - In H1 2025, the company reported revenue of 6.9 billion yuan, a year-on-year increase of 39.2%, and a net profit of 1.24 billion yuan, up 14.0% year-on-year [4]. - The company's gross margin was 32.2%, down 3.6 percentage points year-on-year, while the net margin was 18.4%, down 4.1 percentage points year-on-year [4]. - The company proposed an interim dividend of 0.15 yuan per share (before tax) [4]. Group 2: Business Segments - The high-end equipment manufacturing segment generated revenue of 4.22 billion yuan, a year-on-year increase of 22.4%, while the oil and gas engineering and technical services segment achieved revenue of 2.07 billion yuan, up 88.1% year-on-year [5]. - The natural gas-related business saw a revenue increase of 112.7% year-on-year, with new orders rising by 43.3% [5]. - The company signed a significant contract for the supply of centrifugal compressors for a large domestic gas storage facility, valued at approximately 500 million yuan, marking a major breakthrough in the gas storage sector [5]. Group 3: International Expansion - In H1 2025, the overseas market revenue reached 3.3 billion yuan, a year-on-year increase of 38.4%, with a gross margin of 37.8%, up 0.6 percentage points year-on-year [6]. - New orders from overseas markets grew by 24.2% year-on-year, reflecting the company's successful international strategy [6]. - The company is focusing on global strategic customers and expanding its market reach, resulting in a steady increase in market share [6]. Group 4: Order Backlog - The company secured new orders worth 9.88 billion yuan in H1 2025, a year-on-year increase of 37.7%, with a total backlog of 12.39 billion yuan as of June 30, 2025, up 34.8% year-on-year [7]. - The high-end equipment segment maintained its domestic leadership in electric fracturing equipment, while also achieving significant sales in overseas strategic markets [7]. - The oil and gas engineering and technical services segment successfully entered the North African oil service market and signed multiple contracts for LNG liquefaction plants [8].

Investment Rating - The report maintains a "Buy" rating for the company [5][6] Core Insights - The company achieved significant revenue and net profit growth in the first half of 2025, with revenue reaching 6.9 billion yuan, a year-on-year increase of 39.2%, and net profit of 1.24 billion yuan, up 14.0% year-on-year [1] - The high-end equipment manufacturing and oil and gas engineering segments both experienced substantial revenue increases, with the oil and gas engineering and technical services segment growing by 88.1% year-on-year [2] - The company successfully signed a major contract for the supply of centrifugal compressors for a large domestic gas storage facility, totaling approximately 500 million yuan, marking a significant breakthrough in the gas storage sector [2] - The international strategy is progressing steadily, with overseas revenue reaching 3.3 billion yuan, a 38.4% increase year-on-year, and a 24.2% growth in new overseas orders [3] - The company has a robust order backlog, with new orders totaling 9.88 billion yuan, a 37.7% increase year-on-year, supporting continued performance growth [4] Summary by Sections Revenue and Profitability - The company reported a revenue of 6.9 billion yuan in H1 2025, with a gross margin of 32.2%, down 3.6 percentage points year-on-year, and a net margin of 18.4%, down 4.1 percentage points year-on-year [1] Business Segments - High-end equipment manufacturing revenue was 4.22 billion yuan, up 22.4% year-on-year, while oil and gas engineering revenue was 2.07 billion yuan, up 88.1% year-on-year [2] - Natural gas-related business revenue saw a remarkable increase of 112.7% year-on-year, with new orders up 43.3% [2] International Expansion - The overseas market contributed 3.3 billion yuan in revenue, with a gross margin of 37.8%, an increase of 0.6 percentage points year-on-year [3] Order Backlog - The company had an order backlog of 12.39 billion yuan as of June 30, 2025, reflecting a 34.8% year-on-year increase [4]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - The company reported a significant increase in Q2 non-net profit, which grew by 37% year-on-year, indicating that the performance inflection point has been reached [2] - In the first half of 2025, the company achieved total revenue of 6.9 billion yuan, a year-on-year increase of 39%, and a net profit attributable to shareholders of 1.24 billion yuan, up 14% year-on-year [2] - The company’s revenue and profit in Q2 exceeded expectations, with total revenue reaching 4.21 billion yuan, a 49% increase year-on-year, and a net profit of 780 million yuan, a 9% increase year-on-year [2] Revenue and Profit Analysis - The revenue from high-end equipment manufacturing in H1 2025 was 4.22 billion yuan, up 22.4% year-on-year, primarily driven by natural gas compression equipment [2] - The oil and gas engineering and technical services segment saw revenue of 2.07 billion yuan in H1 2025, an impressive 88.1% increase year-on-year, mainly benefiting from EPC deliveries in the Middle East [2] Margin and Cash Flow Performance - The company's gross margin for H1 2025 was 32.2%, a decrease of 3.6 percentage points year-on-year, while the net profit margin was 18.4%, down 4.1 percentage points year-on-year [3] - The domestic gross margin was 27.1%, down 7.5 percentage points year-on-year, primarily due to the delivery schedule of drilling and completion products [3] - The operating cash flow for H1 2025 was 3.14 billion yuan, a substantial increase of 196% year-on-year, attributed to excellent collection quality from overseas clients [3] International Market Expansion - The company is entering a harvest phase in its overseas layout, with the Middle East and North America being key markets for growth [4] - The Middle East is experiencing urgent economic transformation needs, leading to increased natural gas extraction and expansion of the natural gas equipment and EPC market, where the company is gaining market share [4] - In North America, the company is well-positioned to tap into the large replacement market for fracturing equipment, supported by its performance advantages [4] Financial Forecasts - The report maintains profit forecasts for the company at 3.03 billion yuan for 2025, 3.49 billion yuan for 2026, and 3.99 billion yuan for 2027, with corresponding P/E ratios of 14, 12, and 10 times [4]

Investment Rating - The report maintains a "Buy" rating for the company [13]. Core Views - As a leading private oil service company in China, the company is expected to continue demonstrating its competitive advantages with the deepening of domestic exploration and development, as well as the upcoming replacement demand for equipment in North America. The company has established a comprehensive technology matrix covering all aspects of the natural gas industry, and with the rapid development of the natural gas industry chain in regions like the Middle East, it is anticipated that the company will open a second growth curve through international expansion. The projected EPS for 2025, 2026, and 2027 are 2.99 CNY, 3.52 CNY, and 4.09 CNY, respectively, corresponding to PE ratios of 13.48X, 11.42X, and 9.84X based on the closing price on August 5, 2025 [3][11]. Summary by Sections New Opportunities in Natural Gas - The Middle East is experiencing a strong supply and demand for natural gas, creating new opportunities for oil service companies to expand internationally. The region has significant potential for production increases, with a robust development trend in LNG projects driven by natural gas production policies. The energy investment in the Middle East is expected to continue rising, with a projected compound annual growth rate of 7.8% in the oil service market until 2029 [6][51][55]. Domestic Natural Gas Market Demand - Under the dual carbon goals and urbanization, domestic demand for natural gas is on the rise. The government is emphasizing the construction of gas storage facilities, which is accelerating. The company has successfully signed large orders for domestic natural gas compressors, deepening its application in the gas storage sector [7][59]. Full Industry Chain and Technological Advantages - The company has a comprehensive business support system that spans upstream, midstream, and downstream operations in the natural gas sector. It is the first oil service company in China to obtain API Spec Q2 certification, which enhances its ability to expand into the Middle East and other overseas markets. With the rapid development of the oil and gas market in the Middle East, the company is expected to achieve breakthroughs in multiple regions and full-cycle projects [8][11]. Domestic Industry Resilience - The increasing reliance on foreign oil and gas necessitates a comprehensive energy security guarantee system. Since 2017, major state-owned oil companies have significantly increased capital expenditures, particularly in exploration and development. The "increase reserves and production" policy is a top priority, ensuring robust domestic business growth for the company [9]. New Equipment and Market Opportunities in the U.S. - The U.S. market is facing a peak period for the replacement of existing fracturing equipment, with a significant portion currently being diesel-driven. The company has established a leading technological advantage in high-end fracturing equipment and is expected to gradually expand into the substantial replacement market in the U.S. through new products like electric-driven fracturing equipment [10][11].

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]

Summary of Jerry Corporation Conference Call Company Overview - **Company**: Jerry Corporation - **Industry**: Oil and Gas Equipment and Services Key Points and Arguments 1. **Rapid Growth of Overseas Orders**: Jerry Corporation's overseas orders are expected to grow at a compound annual growth rate (CAGR) of approximately 50% from 2021 to 2024, with 80% of these orders coming from regions along the "Belt and Road" initiative. The Middle East and Central Asia are the fastest-growing areas [2][4][6]. 2. **Shift in Order Structure**: The company is experiencing a significant transformation in its order structure, with natural gas-related business increasing its share. From 2022 to 2024, the average annual growth rate of overseas natural gas-related orders is projected to exceed 80%, with natural gas compression equipment growing at 150% [2][5]. 3. **Domestic Orders**: Domestic orders account for about 50% of total orders, closely tied to the capital expenditures of the "Big Three" oil companies. These orders are less affected by oil price fluctuations [2][5]. 4. **Competitive Advantages in the Middle East**: Jerry Corporation has advantages in the Middle East oil and gas service market, including shorter project delivery cycles, strong customization capabilities, and cost advantages, allowing it to stand out against Western competitors [2][10]. 5. **Response to North American Tariff Issues**: To mitigate tariff risks in the North American market, the company has implemented measures such as early shipments, expanding local production capacity, and utilizing its Dubai factory for transshipment [2][11]. 6. **Revenue Projections**: The company anticipates revenues of 30 to 50 billion RMB over the next 3-5 years, with the power generation business expected to account for about 25% of total revenue [2][14]. 7. **Delivery Cycle Challenges**: The delivery cycle has been extended due to capacity constraints in natural gas compressors and EPC business, with expected growth rates of 15%-20% in 2025 and 30% in 2026 [3][15][20]. 8. **Order Growth in Middle East and Central Asia**: The sustainability of order growth in these regions is influenced by OPEC's production cut policies, which have been less effective than intended, allowing for continued investment in oil and gas extraction [6][7][8]. 9. **Natural Gas Investment Drivers**: The growth in natural gas investments in the Middle East is driven by resource endowment, economic advantages of gas over oil, and geopolitical factors, particularly following the Russia-Ukraine conflict [9]. 10. **Future Capacity Expansion**: Jerry Corporation's natural gas capacity is currently 4 billion RMB, with plans to triple this capacity and add a new factory in the Middle East, increasing total capacity to 6 billion RMB [18]. 11. **Impact of Capacity Constraints**: Current capacity limitations have extended delivery times from one year to up to 15-24 months [19]. 12. **Market Valuation Expectations**: Based on a profit forecast of 4 billion RMB in 2026, the company’s conservative market valuation could reach 40 billion RMB, with potential increases in valuation multiples due to improved growth recognition [21][22]. Other Important Insights - **Dividend Policy**: The company has been increasing its dividend payout ratio, which is expected to enhance its valuation floor over the coming years [22][23]. - **North American Market Challenges**: The expansion of electric fracturing equipment in North America has faced challenges due to market demand being primarily for equipment replacement and sensitivity to oil prices [12][13].

Core Viewpoint - The company reported strong performance in Q1 2025, with significant revenue and profit growth, while also advancing its global expansion strategy and enhancing its market presence in various regions [1][2][3][4] Financial Performance - In Q1 2025, the company achieved revenue of 2.687 billion yuan, a year-on-year increase of 26.07% - The net profit attributable to shareholders was 466 million yuan, up 24.04% year-on-year, while the net profit excluding non-recurring items was 462 million yuan, reflecting a 28.37% increase year-on-year - The gross profit margin was 31.43%, down 4.29 percentage points year-on-year, and the net profit margin was 17.79%, down 0.2 percentage points year-on-year - Operating cash flow improved significantly, reaching 1.067 billion yuan, an increase of 855.8 million yuan year-on-year, attributed to cost control and collection of large project payments [1] Global Expansion Strategy - The company is actively promoting its global development strategy, focusing on collaboration across business segments to enhance market reach and customer base - In 2024, the overseas market sales product structure improved, with a gross margin increase of 6.78% year-on-year, and new orders grew by 65.37% year-on-year - A capital increase of 120 million USD was approved for the Middle East subsidiary to establish a high-end oil and gas equipment manufacturing base in Dubai, which will enhance the company's influence in the global oil and gas market [2][3] Order Acquisition and Market Presence - The company secured significant contracts across various regions, including a major gas project order in Central Asia and multiple projects in the Middle East - Notable contracts include a total contract value of 316 million USD (approximately 2.2 billion yuan) with Bahrain National Oil Company for gas booster station projects, showcasing the company's successful international strategy [3] Stock Buyback and Confidence in Growth - The company's chairman proposed a stock buyback to support employee stock ownership plans, reflecting confidence in the company's growth and value - Major shareholders plan to increase their holdings by 50 to 70 million yuan within six months starting from April 9, 2025 [3] Profit Forecast - The company maintains a positive outlook on its global development and core competitive advantages, adjusting profit forecasts for 2025 to 2027 to 2.94 billion, 3.43 billion, and 4.07 billion yuan respectively, with corresponding P/E ratios of 10.4, 9.0, and 7.5 [4]