1. Event

The holding subsidiary of Western Oil Union, a wholly-owned subsidiary of the company, intends to repurchase 300.2044 million shares held by West Oil United, and the repurchased shares will be cancelled.

Boda Ruiheng, a subsidiary of the company, plans to transfer its 1700 million shares to Liu Rong, the legal representative of Zhongying Anxin, with a transfer price of 15 yuan per share and a total transfer amount of 255 million yuan.

two。 Our analysis and judgment

(1) to transfer part of the shares of the holding company to promote performance growth

According to the announcement, Europe and the United States, a holding subsidiary of the company's wholly-owned subsidiary West Oil United, intends to repurchase 300.2044 million shares held by West Oil United, and the repurchased shares will be cancelled. The price of share repurchase shall not exceed 19.27 yuan per share, and the total amount of repurchase funds shall not exceed RMB 57.85 million yuan at most.

After the completion of the buyback, Omec's registered capital will be reduced accordingly, and West Oil's shareholding in Omec will drop from 51% now to 45.57%. This buyback will help to maintain the capital market image of Europe and the United States, realize shareholder value, give shareholders a return, and further enhance investors' confidence in Omec.

Boda Ruiheng, a wholly-owned subsidiary of the company, intends to transfer its 1700 million shares held by Zhongying Anxin to Liu Rong, the legal representative of Zhongying Anxin (hereinafter referred to as "the transferee"). The transfer price is 15 yuan per share and the total transfer amount is 255 million yuan. The transferee will pay a total of 20 million yuan in deposit before December 15, 2016, and the remaining amount will be paid in batches in 2017 and 2018.

The cost of the company's shareholding is about 7.3 yuan per share. We believe that the transfer of part of the company's shareholding will enable the company to achieve a higher return on investment, and the performance is still expected to achieve rapid growth next year.

In addition, the company seized the opportunity during the industry downturn and completed the acquisition of Xinjinhua and Sichuan Oil Design in 2016, which improved the layout of the upstream and downstream of the company's industrial chain and enhanced the company's comprehensive competitiveness. As the listed company with the most perfect layout of domestic oil service industry chain, we believe that the company will benefit from the recovery of oil and gas service market in the future.

(2) signing trade framework agreements with China and overseas Energy to expand business areas and contribute to performance growth

Recently, the company and China overseas Energy have completed the signing of the Strategic Framework Agreement between Hengtai Epp and China overseas Energy Co., Ltd. (hereinafter referred to as "Framework Agreement") in Beijing.

According to the framework agreement, at the initial stage, the two sides will focus on oil-related products such as fuel oil, lubricants and other chemical products, with domestic trade as the main trade. In the future, the two sides will gradually expand the variety of trade and extend to international trade. Hengtai Epp will directly purchase related products from upstream refineries and chemical plants and supply them to China and overseas to complete the entire trade process, with a business cycle ranging from one month to three months.

The amount of trade agreed between the two sides is 1.5 billion yuan per year, and the term of the contract is three years. Before the termination of this Agreement, either party may apply for an extension, and after friendly consultation, this Agreement may be extended for a period of 3 years.

According to the company announcement, the smooth implementation of the project will expand the overall revenue scale of the company in the future, and have a certain positive impact on the company's performance.

(3) integrate existing resources and make efforts to clean energy and environmental protection in the future

In order to realize the collectivization development, the company integrates the existing resources and technology to build three sectors with great development potential: RRDSL and Xiyou jointly form Daxi Oil Engineering Company to provide on-site services in the oil field; integrate Hengtai Epp's original GambiG business and sales ability with Boda Ruiheng GambiG business and sales capacity to establish Hengtai Aipu Research Institute to improve efficiency. Set up a cloud technology company, based on Internet + 's oil and gas exploration and development technology, combined with big data and cloud computing, to develop and build industry VR technology and non-industry VR technology.

In terms of environmental protection business, the company acquires New Jinhua and Sichuan Oil Design, which can promote non-pipe network methods to solve natural gas supply, improve energy structure and reduce air pollution in small villages and towns in the future.

At the same time, the company invested 10 million yuan in Heilongjiang Shanda Environmental Construction Engineering Co., Ltd., combining the technical advantages of "Sanhua water" such as oil chemical industry, coal chemical industry and pharmaceutical chemical industry, the distributed and intelligent solution of sewage in villages and towns will be promoted and implemented in the future. Through cloud watch, low cost, cloud management, Internet of things, effectively solve the problem of sewage in villages and towns.

(4) the layout of the natural gas application industry chain, and the embryonic form of a comprehensive energy service group has emerged.

After the success of this equity acquisition, Hengtai Aipu will hold 95.07% stake in Xinjin and 90.00% stake in Sichuan Oil Design.

New Jinhua's main business is the R & D and manufacturing of centrifugal compressors, which is at an advanced level in a number of sub-application fields: new Jinhua is at an advanced level in the field of domestic synthetic ammonia centrifugal compressors; it has made a breakthrough in long-distance natural gas pipeline compressors for natural gas transmission, and its self-developed 8.3MW natural gas transmission compressor unit has been in stable operation in Pakistan natural gas pipeline.

During the 13th five-year Plan period, with the strengthening of national efforts to control haze, natural gas instead of coal will be developed rapidly. According to the plan of the National Development and Reform Commission, by 2020, natural gas consumption will account for more than 10% of primary energy consumption, the utilization will reach 360 billion cubic meters, and the annual compound growth rate of natural gas consumption will reach 14% from 2015 to 2020.

Centrifugal compressors are used for pipeline transportation and pressurized liquefaction in the field of oil and natural gas. in the future, with the annual increase of domestic natural gas consumption, the demand of centrifugal compressors is expected to maintain a steady growth.