Profits declined slightly in the past 18 years, with 19Q1 and Haiwobang in the table, with a year-on-year increase of 568%.
The company released its 2018 annual report, with annual revenue of 339 million yuan, down 12.03% from the same period last year, and net profit of 5.61 million yuan, down 3.47% from the same period last year. The company's performance decreased compared with the same period last year, mainly due to the decline in the traditional main horticulture business and the increase in financing costs due to the acquisition of Zhongwobang, with an annual financial expense of 16.25 million yuan, an increase of 84.4% over the same period last year. In 2018, the company acquired 37.17% of the equity shares of China Warburg, controlled 50.5% of its shares, became its controlling shareholder, and completed the transfer of assets on December 26.
The company released its quarterly report for 2019, Q1 revenue of 406 million yuan, an increase of 359% over the same period last year, and net profit of 39 million yuan, an increase of 568% over the same period last year. The substantial increase in the company's performance is mainly due to the acquisition of Zhongwobang Q1, which has a good performance, leading to a substantial increase in the company's performance.
At present, the planned annual production capacity of Yonghe block is 2 billion square meters, and the gas volume in 19-20 years is expected to increase to 9.1 billion square meters.
Zhongwobang signed a 30-year product sharing contract with Petrochina Company Limited Coalbed methane Company in 2009 to jointly develop tight gas in Shilou West Block, covering an area of 1524 square kilometers. The proven well areas are: Yonghe 18, 30, 45, of which ① Yonghe 18 entered the commercial production stage in May 17, with a production capacity of 500 million square meters per year. ② Yonghe 45 well is in the development period, adjacent to Yonghe 18 well. At present, it has applied for joint development with Yonghe 18 well, with a planned production capacity of 1.2 billion square meters per year after the merger. The 800 million square development project of ③ Yonghe 30 well area has been filed by the National Energy Administration and is in the development stage. After the Yonghe 18 well was put into commercial production, the gas volume of Zhonghai Wobang increased significantly, with gas sales of 630 million square meters in 17 years, an increase of 125 percent over the same period last year, with a net profit of 310 million yuan, and an increase of 175 percent, with a net profit of 420 million yuan. After Yonghe 30 and 45 wells enter the commercial production period, the gas production of Zhongwobang is expected to increase significantly again. It is estimated that the annual gas production of Zhongwobang is about 9.1 billion square meters in 19-20, and the net profit is about 499 million yuan.
Bullish on the development of China Haiwobang, the company plans to continue to issue additional acquisitions and cash acquisitions to achieve 67% absolute holding.
The company is optimistic about the future development of Zhonghaiwobang. Recently, the company announced a restructuring plan: the company intends to issue shares to buy another 41% of Wojin Energy, a holding subsidiary, thereby indirectly buying an 11.15% stake in CSB; after this transaction, the company still controls a 50.5% stake in CSB. However, the proportion of interest in CSB will increase from 37.17% to 48.32%. Zhongwobang 100% equity trading price is 5.47 billion yuan, Wo Jin Energy 41% stake is priced at 610 million yuan, this acquisition will issue 21.2549 million shares, the company's total equity increased from 102 million shares to 123 million shares. In November 18, the company signed a "letter of intent" with the original shareholders of China Haiwobang. After 18 years of performance betting, the company will continue to acquire 16.50% of the shares in cash, thus controlling 67% of the shares and becoming its absolute controlling shareholder. The company expects to apply for a credit line of 1.9 billion yuan from the bank in 19 years to provide funds for the restructuring of the company.
Profit Forecast: the performance of the company Q1 has increased significantly after the combination of Havobang in the table. We have raised our profit forecast for the company for 19-20 years from 2.868 million yuan to 1.74 million yuan per 227 million yuan, and EPS from 0.19pm 0.28 to 1.7pm 2.23 yuan per share. At the same time, the pretest profit forecast is given: after the acquisition of Wojin Energy equity by ①, the net profit of return to the mother in 19-20 years is 223 and 2.96 million yuan, and that of EPS is 1.86 and 2.4 yuan per share. After ② acquired a 67% stake in Zhongwa Bang, the net profit of home ownership in 19-20 years was 31 million yuan, 397 million yuan, and EPS 2.53 yuan, 3.22 yuan per share.
Risk hint: valuation risk of assets to be purchased, risk that transactions are suspended / cancelled, gas production is not up to expectations