The main business performance in 2016 is likely to be at rock bottom, and Hengtai App is expected to start to pick up from 2017 to release its 2016 annual report, with operating income of 1.352 billion yuan, an increase of 61.01% over the same period last year, and net profit of 85 million yuan, an increase of 13.19% over the same period last year. This is mainly due to the consolidation of new Jinhua in April (deducting 84 million yuan in non-net profit for the whole year) and the thickening performance of new trade business. Among them, the net profit after deduction is 21 million yuan, and the impairment loss of assets for the whole year is 92 million yuan, of which the loss of bad debt is 89 million yuan.
The five major business plates have taken shape, and the whole industry chain has achieved remarkable results.
At present, five major plates have been formed: Groug (Geology and Geophysics), engineering technology, high-end equipment manufacturing, cloud computing and big data, and investment incubation. The layout in the fields of oil, natural gas and geothermal has been basically completed, and a comprehensive energy service business with the layout of the whole industry chain has been formed. The running-in of the management and technical teams of the core companies is getting better and better, and the synergy and competitiveness are gradually emerging.
Global oil and gas capital expenditure has entered a new upward cycle, and there may be a double inflection point in 2017 orders and performance due to low surplus capacity in major production areas such as the Middle East, superimposed oil prices continue to improve, and global oil and gas capital expenditure has entered a new upward cycle. the annual growth range of investment in the next three years is about 10-20%. According to field research and industry verification, orders for equipment and energy services of the company's core companies have improved significantly, and we expect the inflection point of revenue and net profit to begin to show in the second quarter.
The geothermal field may benefit from the development of "Xiongan New area"
"Xiongan New area" geothermal resources are unique, China Petroleum & Chemical Corp has made great efforts to promote and develop, we estimate that the total investment may reach 50 billion yuan. According to the field grass-roots research, exploration, drilling and completion, ground source heat pump and other equipment and other three links are more beneficial, among which the drilling and completion business benefits the most. West oil combined with geothermal drilling and completion technology is mature, and the project has rich experience, which may benefit in the future.
Natural gas sector, acquisition of Xinjinhua, Sichuan Oil Technology to create a new growth pole from the industrial trend, for the sake of optimizing the energy structure, the proportion of natural gas in primary energy consumption will rise from the current 6% to 12% in 2020 (the global average is 24%). Investment in natural gas (including pipeline gas, LNG, etc.) will also continue to grow. The company's previous mergers and acquisitions to integrate Xinjinhua and Sichuan Oil Design are ready to focus on creating a new growth pole in the natural gas field.
Earnings in 2017 and 2018 may significantly exceed market expectations and maintain the "buy" rating. Overall, we believe that the company's orders and earnings are at an inflection point, or significantly exceed market expectations.
It is estimated that from 2017 to 2019, the operating income is 19.53,26.67 and 3.733 billion yuan respectively, and the net profit is 2.77,3.95 and 557 million yuan respectively, the corresponding EPS is 0.39,0.55 and 0.78 yuan per share, and the corresponding PE is 24,17 and 12 times. It will be given 35-38X in 17 years, with a target price of 13.65-14.82 yuan per share, maintaining a "buy" rating.
Risk hint: international crude oil prices fell to a low again; geothermal drilling business and natural gas business expansion did not meet expectations.