Summary of Jerry Corporation's Conference Call Company Overview - **Company**: Jerry Corporation - **Period**: First half of 2025 - **Revenue**: 6.894 billion CNY, up 37.72% YoY - **Net Profit**: 1.231 billion CNY, up 33.9% YoY - **Operating Cash Flow**: 3.144 billion CNY, up 196% YoY, a historical high - **Dividend Plan**: Increase in mid-term dividend to 1.5 CNY per share Key Financial Highlights - **New Orders**: 9.881 billion CNY, up 37.65% YoY, with domestic and international orders each accounting for half [2][6] - **Backlog**: 12.386 billion CNY, up 34.76% YoY, providing assurance for future performance [2][6] - **High-end Equipment Manufacturing Revenue**: 4.224 billion CNY, up 22.4%, with a gross margin of 38.28%, down 5.25% YoY [2][7] - **Oil and Gas Engineering Services Revenue**: 2 billion CNY, up 88%, with a gross margin of 23%, up 6% YoY [2][9] - **Natural Gas Business Revenue**: Nearly 2 billion CNY, up 112.69%, with a gross margin increase of 5.61% YoY [2][15] Business Segment Performance - **High-end Equipment Manufacturing**: Expected to maintain profit levels from the previous year despite delays in equipment delivery; new orders in North America anticipated to boost performance [8] - **Oil and Gas Engineering Services**: Significant growth driven by overseas markets; projects primarily funded through prepayments and progress payments, positively impacting financial health [9] - **Natural Gas Business**: Strong performance with significant revenue growth and new orders; expansion of production capacity in Dubai planned to double output [15][3] Research and Development - **R&D Investment**: 243 million CNY, up 20.01% YoY, focusing on digitalization, intelligence, and low-carbon technologies [4][13] - **New Technologies**: Development of advanced pump technology with zero loss over its lifecycle, enhancing market competitiveness [18] Market and Strategic Insights - **Overseas Market Performance**: Revenue of 3.295 billion CNY, up 38.38% YoY; strong order acquisition capabilities demonstrated [16] - **Middle East Market**: Identified as a strategic focus area with significant growth potential; ongoing projects expected to drive future revenue [23][24] - **Challenges**: High entry barriers in the Middle East market favor established players like Jerry, providing a competitive advantage [25] Future Outlook - **2026 Expectations**: Confidence in achieving profitability across business segments; ongoing management improvements expected to enhance financial performance [11] - **Natural Gas Business Strategy**: Continued focus on expanding capacity and market share, particularly in the Middle East and Central Asia [19][20] Additional Considerations - **Cost Management**: Sales and management expenses increased but at a lower rate than revenue growth, indicating effective cost control [12] - **Credit Management**: Improved receivables management led to a credit impairment gain of 101 million CNY [14] - **North American Market**: Positive outlook with significant order growth and stable profitability despite tariff challenges [34] This summary encapsulates the key points from Jerry Corporation's conference call, highlighting financial performance, business segment insights, strategic initiatives, and future outlook.

Group 1 - The core viewpoint is that China's foreign energy investment projects from 2020 to 2024 will reach $168 billion, with significant investments in the Middle East, particularly in Saudi Arabia, Iraq, UAE, Kuwait, Qatar, and Angola, totaling $50.28 billion, of which $29.15 billion is in oil and gas projects, showing a year-on-year increase [1] - The Middle East oil service market is estimated to be in the hundreds of billions, with the oil service equipment market at least in the tens of billions, indicating a high growth potential for Chinese oil service equipment companies, which currently have a low market share in the region [1] - The "Belt and Road" initiative is deepening cooperation, creating vast opportunities in the Middle East oil service market [1] Group 2 - Jerry's business model involves long project cycles with a focus on high-end equipment and non-standard customization, leading to an average delivery time of 1.5 years, while Neway's model is based on standardized products with shorter delivery times of 3-6 months [2] - Jerry's project-based approach results in longer customer validation periods but fosters strong customer relationships, while Neway benefits from scale effects and management efficiency [2] - Both companies are experiencing rapid order growth in the Middle East, with Jerry and Neway expanding their production capacities in the region to meet rising demand [3] Group 3 - Jerry has established a strong market presence in the Middle East, completing significant projects and gaining recognition, while Neway is increasing its order volume through certifications from major clients like Saudi Aramco and ADNOC [3] - The competitive landscape shows that domestic competitors lack the overseas competitiveness that Jerry and Neway possess, allowing them to leverage China's manufacturing advantages [3] - The management teams of both companies are driven by professional managers, enhancing corporate vitality and responsiveness [3] Group 4 - Recommended stocks include Jerry (002353.SZ) for its explosive order growth in the Middle East and Neway (603699.SH) for its strong visibility in demand and anticipated steady performance growth [4]

Investment Rating - The report assigns an "Outperform the Market" rating to the company [7]. Core Views - The company is a global leader in oil and gas field equipment manufacturing and oilfield services, with a revenue CAGR of approximately 20.83% from 2010 to 2024 [1]. - The company is benefiting from the growing demand for unconventional oil and gas, with expected continuous revenue and profit growth due to equipment/service expansion and technological innovations [4]. - The international strategy is progressing smoothly, with significant breakthroughs in the Middle East and North America markets [3]. Summary by Sections Business Overview - In 2024, the company achieved revenues of 133.55 billion yuan, with a slight decline of 4.01% year-on-year, while net profit increased by 7.03% to 26.27 billion yuan [1][25]. - The high-end equipment manufacturing segment accounted for 69% of total revenue in 2024, with a growth rate of 12.71% [14][51]. Financial Analysis - The company has maintained a strong profitability profile, with a gross margin of 33.70% and a net margin of 20.11% in 2024, reflecting improvements in operational efficiency [29][25]. - The company’s net profit is projected to grow to 30.15 billion yuan in 2025, with a corresponding PE ratio of 12 [4][55]. International Expansion - The company’s overseas revenue grew from 13.77 billion yuan in 2017 to 60.37 billion yuan in 2024, with a CAGR of approximately 23.51% [3][42]. - Key contracts signed in 2024 include a 22 billion yuan project with Bahrain National Oil Company and a 6 billion USD investment in Iraq [3]. Investment Recommendations - The report forecasts that the company will benefit from trends such as increased equipment self-research, expansion of service categories, and technological advancements in electric and turbine fracturing equipment [4][51]. - The estimated reasonable valuation range for the company is between 38.22 and 47.04 yuan per share [4].

Group 1: Company Insights - Dongfang Caifu's securities business market share continues to rise, benefiting from the capital market recovery in Q4 2024, with brokerage market share at 4.11% and margin financing market share at 3.16% [4][5] - In 2024, Dongfang Caifu achieved revenue of 11.604 billion yuan, a year-on-year increase of 4.72%, and net profit of 9.610 billion yuan, up 17.29% [3][4] - Ningbo Bank reported an 8.19% increase in revenue and a 6.23% increase in net profit for 2024, with total assets exceeding 3.1 trillion yuan [9][11] - Ningbo Bank's non-performing loan ratio remained stable, with a provision coverage ratio of 389.35% [10][11] - The company expects to maintain a high dividend payout ratio of 22.77% in 2024 [11] Group 2: Industry Trends - The aluminum industry is experiencing a reduction in tariff pressures, with domestic aluminum production capacity expected to rise to 43.92 million tons per year by the end of April 2025 [14][18] - Despite tariff impacts, demand for aluminum is showing slight growth, with inventory levels decreasing [15][18] - The coal market is stabilizing, with port inventories declining and prices holding steady due to supply constraints and steady demand from non-electric sectors [19][21] - The introduction of high-purity quartz as a new mineral resource in China is expected to support the semiconductor and photovoltaic industries, with significant breakthroughs in domestic production capabilities [24][25] - The chemical industry is anticipated to enter a replenishment cycle in 2025, driven by low inventory levels and improving profitability among leading companies [40][41]