Event
According to the company's report for the third quarter of 2018, operating income in the first three quarters increased by 40.86% year-on-year to 553 million yuan, and net profit belonging to shareholders of listed companies increased 11.28% year-on-year to 53.89 million yuan.
Comment
Business expansion is smooth, and the company's performance is expected to be close to an all-time high. The company's operating income for the whole year is expected to reach 1 billion yuan and net profit is 90 million yuan, close to the best level in 2013. The company's market layout is progressing smoothly this year, with a substantial increase in the number of drilling rigs and personnel compared with the listing at the end of 2016, and the performance is expected to hit an all-time high next year.
The drilling rigs that have opened up the market are gradually in place and are expected to greatly increase the company's profits next year. The company's expanded Ukrainian natural gas drilling market, Sichuan shale gas market and southern Xinjiang Tarim gas field market have set up corresponding regional subsidiaries. at present, drilling rigs have been gradually put in place. Ukraine and Sichuan shale gas markets have been drilled and have received money back one after another, and the southern Xinjiang market is expected to start construction by the end of this year. The Ukrainian market is the company's second base, and the rental of drilling rigs under the follow-up contract has been completed, and more than 10 drilling rigs will work together next year.
The winter construction of Petrochina Company Limited Xinjiang oil field provides the company with new work increment. Petrochina Company Limited will launch the winter offensive of drilling and fracturing this year, and the Xinjiang oil field will become the main construction area. It is estimated that the utilization rate of drilling rig equipment will be increased by 5%, and the operation scale and service price of the company's northern Xinjiang market will be increased.
Profit forecast
In the first three quarters of 2018, the company added drilling operations in Ukraine, Sichuan shale gas and the southern Xinjiang market, and the traditional northern Xinjiang block also ushered in winter construction. This year's performance is close to the best level in history, and is expected to rise in volume and price with the trend of oil service boom next year and the year after next. From 2018 to 2020, the company is expected to achieve a net profit of 0.91,1.25 and 162 million yuan respectively belonging to the shareholders of the parent company, equivalent to 0.45,0.61,0.80 yuan per share of EPS, and the corresponding PE is 29,21 and 16 times respectively, and will continue to be rated as "overweight".
Risk hint: the implementation rate of OPEC production limit agreement is too low, the situation in Ukraine has changed significantly, and the production of shale oil and gas in the United States is much higher than expected.