The company's traditional business is a series of polyacrylamide products, which are mainly used to increase oil production. The management of the company started the transformation of the company in 13 years, firmly expanded to the upper reaches of the industrial chain, actively entered the field of oil exploration, and acquired a 785 square kilometer 100% oil and gas block in Alberta, Canada, through the acquisition of 51% stake in Canadian sharp energy. We are optimistic that there are two main points for the medium-term growth of the company: 1) the development of oil and gas blocks in Canada will start a high growth of 3-5 years; 2) as a China Petroleum & Chemical Corp system restructuring enterprise, the company will fully benefit from the market-oriented reform of the domestic petroleum system. We cover for the first time, giving a "prudent recommendation-A" investment rating.
The acquisition of a 785 square kilometer oil and gas block in Canada through mergers and acquisitions will start the company's high growth for 3-5 years. The company acquired Canadian sharp energy and obtained an oil and gas block of 785 square kilometers, demonstrating the company's determination to actively expand the industrial chain. According to the company's medium-and long-term plan, we will focus on deep exploration in 2014, with a crude oil production target of about 10-200000 tons from 2015 to 2016, and strive to achieve 1 million tons in five years. We believe that the company has been working in the oil system for a long time and is fully capable of moving upstream. From the perspective of profit structure, the new oil exploration business will become the main income, and the performance is more flexible.
Holding Kangbei Oil and Gas and creating an integrated service platform for unconventional oil and gas development. At the beginning of the year, the company acquired 51% of Kangbei Oil and Gas with an over-raised capital of 45.07 million yuan, entered the field of oil and gas development engineering and technical services, and expanded its service capacity to the field of unconventional oil and gas development, which will become a new profit growth point. At the same time, oil and gas services will strongly support the company to enter the field of oil exploration. On the other hand, Kangbei Oil and Gas and the company belong to China Petroleum & Chemical Corp restructuring enterprises, and also benefit from the market-oriented reform of the petroleum system.
The great curtain of marketization of the oil system has opened, and the company has benefited from it in the medium and long term. In 2014, the market-oriented reform of the petroleum system has been gradually promoted, and the market barriers between state-owned enterprises and private enterprises, and even between Petrochina Company Limited and China Petroleum & Chemical Corp, are gradually breaking down. Market-oriented reform will bring opportunities for more efficient private enterprises. As a China Petroleum & Chemical Corp restructuring diversion enterprise, the company has taken the lead, the business channel is smooth, and is expected to benefit in the medium and long term.
For the first time, it is given a "prudent recommendation-A" investment rating. We are optimistic about the medium-term growth opportunities brought about by the company's strategic transformation, and the biggest logic of the company is that the transformation business will pierce the ceiling of traditional business, considering that the main task of 2014 company is to start exploration and release performance from 2015 to 2016. Give a "prudent recommendation-A" investment rating.
Risk hint: the progress of overseas oil and gas exploration and exploitation is lower than expected; the expansion of oil service business is lower than expected.