Composite perforation is a development trend, maintaining steady growth. Compared with traditional perforation, composite perforation can effectively solve near-well zone pollution, increase the yield of a single well, and it has become the mainstream technology for mining hard-to-use reservoirs. The company's composite perforation technology has obvious advantages. The industry's share has reached more than 80%. Future growth is mainly due to the upgrading of its own products, and the growth rate has stabilized at 10-15%. Revenue from the drilling business is growing rapidly. The company's drilling business has invested heavily and developed rapidly. The newly invested equipment is mainly high-end drilling rigs, mainly drilling difficult wells and horizontal wells. On the basis of 2 drilling rigs operating and revenue of 31 million last year, the number of drilling rigs this year has increased to 8, and the drilling sector's revenue is expected to be around 100 million yuan. The company's share of revenue will increase year by year, and with investment in middle and high-end drilling rigs, the gross margin of the company's drilling revenue is on an upward trend. Fracturing services are off to a good start. Fracturing tool services are also an important part of the company's planning. After equipping core management and technical personnel, the company introduced international advanced fracturing tools to serve domestic oil fields. The purpose of this year is technology introduction and digestion, mainly experimental wells in domestic oil fields. The next step will be to combine the company's perforation with the imported fracturing tools to develop new tools to serve the oil field. On the one hand, it will digest the introduced technology, and on the other hand, it can also drive the development of the company's original business. Overseas markets are the main driving force for the company's rapid growth in the future. The overseas oil field service market, represented by North America, is huge, several times larger than the domestic oil field service market, and has always been a key field for the company to explore in the future. In order to quickly enter the North American market, cooperation with local companies with relevant technology will be used to develop the North American market in the future. Highly recommended: Expect fully diluted EPS in 2012-2014 to be $0.67, 0.92, and $1.24, respectively. The corresponding closing price PE was 23, 17, and 12 times, respectively. The drivers for performance growth over the next three years are mainly due to rapid growth in the drilling and hydraulic fracturing sector. We maintain our “Highly Recommended” rating. Risk warning: The sharp drop in international oil prices has led to a decline in investment by domestic oil companies; the drilling and hydraulic fracturing business market is not developing smoothly, making it difficult to obtain orders.