Key points of investment
Jutao Offshore Oil Service Co., Ltd. is a comprehensive provider of technologically advanced equipment manufacturing, engineering and technical support services in the energy industry. After completing the investment in Sanju Environmental Protection and the acquisition of all of Penglai Jutao's shares in 2017, the company expanded its business into refining, environmental protection, and green energy fields while maintaining traditional oil and gas engineering and service projects.
In June 2017, Sanju Environmental Protection (SZ.300072) became Jutao's largest controlling shareholder. Sanju Environmental Protection is a comprehensive technology service company dedicated to green clean energy, fine chemicals, and ecological agriculture. The services and technology provided by Jutao and Sanju Environmental are different, but customers overlap. Before the three companies took the shares, the two parties focused on customer service and distribution in their respective app markets. After Sanju has completed its shareholding, the two sides will combine their respective strengths to explore cross-sales and joint development activities, and jointly develop new markets and customers to enhance the company's comprehensive competitiveness, thereby promoting strategic cooperation between the company and Sanju to achieve the company's sustainable development.
Complete the acquisition of all shares in Penglai Jutao to strengthen the company's strength. Relying on excellent site equipment resources and an international talent team, Penglai Jutao continues to provide the global oil and gas upstream industry with design, procurement, and construction services for large-scale complex modules and other offshore projects. At the end of 2017, Jutao Oil Service completed the acquisition of the remaining 70% of shares. After the acquisition was completed, the company's construction strength was significantly enhanced. It also helped the company take advantage of the two major construction sites in North and South and implement more effective management.
The company has plenty of orders in hand. As of October 2018, the company's on-hand orders were about 3 billion yuan, mainly manufacturing business orders from Penglai and Zhuhai of more than 2 billion yuan, some projects related to Sanju were about 4-5 billion yuan, and some orders for the company's other businesses.
Risk warning: 1. Oil prices have dropped sharply; 2. The offshore oil service market is recovering slowly; 3. Order completion progress has not met expectations; 4. Collaboration with Sanju has not met expectations