With the continuous improvement of China's external dependence on energy resources, energy security has been highly valued by national leaders, and increasing the output of China's energy resources has become the primary task at present. Xinjiang is rich in natural resources, and the degree of development is relatively low in central and eastern China, which is very much in line with the current needs of our country to increase the output of oil and gas resources. Therefore, since 2014, the state has issued a series of related support policies in Xinjiang, such as "Revitalization of Xinjiang", "New Silk Road" and other policies have greatly promoted the development of oil and gas industry in Xinjiang. In addition, in the process of promoting the joint-stock reform, China Petroleum & Chemical and Petrochina selected Xinjiang as the pilot area of the reform, which also brought a large number of oil and gas field service business to Xinjiang. National support policies and large energy companies' strong investment in Xinjiang will promote the rapid development of oil and gas industry in Xinjiang.

As the leading oil and gas field service company in Xinjiang, quasi-oil shares have certain regional advantages in the region, and are expected to take advantage of the rapid development of the oil and gas industry in Xinjiang to achieve the rapid growth of the company. In addition, the company is expected to benefit from Petrochina's introduction of mixed ownership in upstream oil and gas resources exploration, enter the oil and gas exploration field, break the bottleneck of the company's oil service business development, and achieve long-term and stable development of the company. At the same time, the company also distributes the field of coalbed methane in advance, and at the stage when the country strongly advocates coalbed methane development, the company is expected to fully relate to the favorable factors brought about by national policies.

Profit forecast

To sum up, we predict that the EPS of the company from 2014 to 2016 will be 0.13,0.55 and 0.70 yuan respectively, corresponding to 91 times, 22 times and 17 times of PE respectively, giving the "overweight" rating for the first time.

Risk hint

Traditional business risk; risk of single market area and customer concentration; risk of technological innovation; risk of rising operating costs; security risk.