In February, we conducted a field survey of the company.
The prospect of oil drilling and production equipment is promising, and the market for large oil drilling and production equipment for natural gas and coalbed methane in the future includes: the market demand generated by the development of new oil and gas fields; the market demand generated to stabilize the production capacity of mature oilfields; the market demand generated by equipment renewal; the market demand generated by the development of pure natural gas fields and coalbed gas fields. Oil production is expected to grow at an annual rate of 1.25% by 2025, and it is conservatively estimated that the annual growth rate of oil casing demand needs to be maintained at no less than 8% by 2015 to meet the needs of oil production growth. The demand for special equipment for oil drilling and production in the domestic market will maintain a rapid growth trend, which is faster than that in foreign markets. China's oil drilling and production equipment has a good performance-to-price ratio, and the export growth rate far exceeds the average development level of the global industry. China's excellent manufacturers of special equipment for oil drilling and production have entered a stage of benign and rapid development, and their market share is constantly expanding.
The industry concentration is getting higher and higher, and the company has a complete industrial chain and leading technological advantages.
The company is one of the main domestic manufacturers of special equipment for oil drilling and production, and its products include oil casing, sucker rod, oil pump, pumping unit and other major oil drilling and production equipment. It has the advantage of a complete industrial chain and is the manufacturer with the most complete range of products in China. The company has a good market position, and its leading products have covered the most important oil-producing countries in the world. with the increasing concentration of the industry, it has become one of the few companies that are suppliers of the three largest domestic oil companies at the same time; in Petrochina Company Limited, the winning bid for procurement bidding in 2009 reached 11.50%, and tubing sales ranked second.
The fund-raising project will effectively solve the capacity bottleneck and optimize the product structure.
The funds raised by the company are mainly invested in the renovation project of 180mm special oil pipe, which is expected to be put into production in October 2010. The project adopts more advanced technology and equipment, and after it is put into production, all kinds of high-grade special oil pipes will be added by 300000 tons per year, which can enhance the production capacity of high-grade API standard and non-API standard products; it is estimated that the production capacity will reach 530000 tons, 600000 tons and 650000 tons in the next three years.
The company will benefit from the industry recovery
Recently, the international oil price has broken through the $100 mark, the oil price fluctuation range as a whole has been greatly improved from the $80 platform, and the prosperity of the oil service industry will be further improved. we expect the price of the company's oil casing and other products to return to the 2007 level before the financial crisis in the second half of 2011, which will significantly improve the company's performance.
Investment suggestion: it is estimated that the EPS of the company from 2010 to 2012 will be RMB 0.69,1.15,1.41 respectively. The company is in the oil drilling and production equipment industry, with high barriers to entry. With reference to the valuation level of the growing oil equipment and service companies, we think we can give it 30 times PE in 2011, with a buy rating for the first time, with a target price of 34 yuan.
