Main points of investment
Excellent supplier of oil drilling and production equipment, "three cranes and one card" market leader. The company is mainly engaged in oil drilling and production wellhead equipment research and development, production and sales, the main products are lifting equipment, clamping equipment and buckle equipment, market share industry first. The company has foundry companies, which can control the chemical composition of materials from the source and ensure product quality. customers include the major domestic engineering and technical service enterprises of the three major oil companies, namely, Petrochina Company Limited Group, China Petroleum & Chemical Corp Group and CNOOC. Petrochina Technology Development Company, Sichuan Honghua Petroleum equipment Co., Ltd., Baoji Petroleum Machinery Co., Ltd.
The company's overseas business accounts for nearly 30%, and is expected to further expand the international market with "Belt and Road Initiative". The company adopts the mode of direct selling + distribution both at home and abroad, in which direct selling is the main mode at home and distribution + direct selling is the common business abroad. The product price has more advantages than the major international manufacturers, overseas is mainly concentrated in the Americas and the Middle East, the Russian market is well developed, we judge that the development of overseas markets is expected to become an important driving force for the company's performance growth.
Wellhead mechanization and intelligence is the development direction of the industry, the company is actively engaged in new product development. With the help of mechanized wellhead equipment, mechanical, electrical and hydraulic control and operation can be realized, which can effectively ensure the continuity of wellhead operation, improve work efficiency, reduce workers' labor intensity, ensure operation safety and reduce wellhead operation cost.
On the basis of the complete range of manual equipment products and outstanding customization ability, and combined with the development direction of the industry, the company develops and produces mechanized and mechanical-electrical-hydraulic integrated products. with the R & D and production capacity of power crane, power slips, crane / chuck and power pliers, a relatively perfect product structure has been formed.
Profit forecast and rating: the company is the market leader of oil drilling and production equipment segmentation, constantly enriching product categories and increasing international market development. We estimate that the company's EPS for 17-19 will be 0.29 EPS 0.32 plus 0.38 yuan respectively, giving it an "overweight" rating.
Risk hint: the risk of a sharp fall in oil prices; downstream market demand is lower than expected.