Deep-sea oil and gas become an important increment, high-barrier core components suppliers welcome growth opportunities according to OPEC related research, the future important increment of oil and gas will come from the deep-sea region of Latin America, driving the demand for deep-sea oil and gas equipment. Deep-sea oil and gas equipment has high requirements for production process and strict customer certification. Dewey, as an important supplier of many global oil service companies, is expected to benefit from the economic opportunities of deep-sea structures. We estimate that the company's net profit for 22-24 will be RMB 1.43 million, RMB 2.67 million, and RMB 1.94 for EPS, respectively, an increase of 342.94%, 87.04% and 41.35% over the same period last year, and the PE for 22-24 will be times higher than that of 59-31-22. The average PE of comparable companies over the past 23 years is 27 times, taking into account the high barriers of the company's products and its own high growth, enjoy a certain valuation premium. Give the company 40 times PE for 23 years, corresponding to the target price of 54.80 yuan, cover for the first time, and give a "buy" rating.
Reserves / cost catalysis deep-sea structure high boom, deep-sea production tree orders continue to increase deep-water, ultra-deep water resources are rich, and the discovery rate is low, so it is easier to find large oil and gas reservoirs. According to IHS statistics, 74% of the new oil and gas discoveries in the world in the past 10 years are distributed in the sea area. The break-even point for deep-sea crude oil in 2021 is 43 US dollars per barrel (below the break-even point of 44 US dollars per barrel for North American shale gas). According to GlobalData, a total of US $1.251 trillion was spent on offshore oil and gas projects in new oil and gas development in the world from 2018 to 2025, accounting for 73.4 per cent of the total expenditure. According to Westwood,1-November cumulative orders for deep-sea production trees have increased by 30 per cent year-on-year.
Well-known deep-sea oil and gas equipment manufacturers, high-quality customer resources, product orders repeatedly break through Deweil is a world-famous professional research and development, production and sales of deep-sea, fracturing and other oil and gas drilling and production equipment pressure parts of high-tech enterprises. Global deep-sea oil and gas underwater production equipment or system technology is mainly monopolized by TechnipFMC, Aker Solutions, Schlumberger and Baker Hughes, and the market share of the four companies reached 81 per cent in 2018. It is difficult to manufacture special parts for deep-sea oil and gas equipment, so any category and grade of products need to be strictly reviewed by customers. With years of R & D investment and performance such as low-temperature impact toughness exceeding industry standards and the uniformity of large-wall thick products, Dewey has become the most important supplier for the above four companies in the Asia-Pacific region. 22H1 has accepted a total of 175 orders for special parts for deep-sea oil and gas projects, compared with only 15 orders in the same period last year.
Industrial chain extension, surfacing welding to enhance competitiveness, multi-direction die forging upgrading process continues to extend the business chain, the company from forging plants, investment in heat treatment, extension of finishing, surfacing, assembly and other business links, to undertake customer manufacturing transfer, to meet the increasing supply demand, enhance the core manufacturing capacity. The surfacing welding process invested in research and development improves the erosion and corrosion resistance of deep-sea equipment; the world's largest 350MN multi-directional double-action compound extrusion hydraulic press reordered from Taiyuan adopts multi-directional die forging technology, which can be used for the forming and manufacture of key parts of equipment such as deep sea and fracturing under special working conditions, and is the core technology reserve. Compared with the free forging process of traditional forgings, the material is saved and the product performance is improved.
Risk tips: upstream oil and gas enterprises' capital expenditure has declined; the competition pattern of deep-sea equipment has deteriorated; and raw material costs have risen higher than expected.
