The company released its annual report in 2019 and showed high growth in its annual performance.
In 2019, the company's revenue was 1.53 billion yuan, an increase of 352% over the same period last year; the net profit returned to the mother was 73.75 million yuan, an increase of 1214% over the same period last year; the EPS was 0.723 yuan per share, an increase of 703% over the same period last year; and a cash dividend of 0.55 yuan (including tax) was distributed to all shareholders for every 10 shares. The main reasons for the substantial increase in the company's performance in 2019 are: the acquisition and holding of Zhongwobang, and the high performance growth brought about by Haiba in the table; the annual net profit of Zhongwobang is 489 million yuan, and the company currently holds a 50.5% stake in Zhongwobang, with an equity ratio of 48.32%.
Profits maintained high growth in the first quarter: the epidemic dragged down business performance, and tight gas subsidies led to performance growth.
The company issued a forecast of first-quarter results, with an estimated net profit of 53 million yuan to 63 million yuan, an increase of 36.97% and 62.82% over the same period last year. Affected by the COVID-19 epidemic in the first quarter, the sales profit of Zhongwobang declined, and the net profit of returning home decreased by about 13 million yuan compared with the same period last year. At the same time, the Ministry of Finance issued tight gas subsidies, the Shilouxi project received a total of 90.26 million yuan in tight gas subsidies allocated by the central government, and Zhongwa State received 87% in accordance with the PSC contract, increasing its net profit by about 32 million yuan. the company confirmed the government subsidy in the first quarter and included it in the profits and losses of the current period, so its performance in the first quarter was still higher than the same period last year. In the future, with the increase of gas sales in Zhongwa, the company is expected to continue to receive incremental gas subsidies.
The company issued a plan to increase the number of shares, which will raise 1.1 billion yuan per share.
The company issued a plan for a fixed increase of 36.96 million shares at a non-public offering of 30 yuan per share, raising a total of 1.109 billion yuan, of which 580 million yuan is used to buy 10% equity in Zhongwobang, 179 million yuan is used to repay the loan of Jichuan Holdings, 148 million yuan is used to repay bank loans, and 202 million yuan is used to supplement liquidity. The lock-up period of this additional issue is 18 months. After the completion of this rights issue, the company's share capital will increase from 123 million shares to 160 million shares, with a total shareholding ratio of about 23% for new shareholders.
This increase will help the company to improve its current operating conditions, and the company will continue to buy 10% of Zhongwobang. In addition, the company's financial expenses will be significantly reduced (9% for Jichuan Holdings and 5.29% for Bank of China). In addition, the company's liquidity will be more abundant, which will be conducive to the exploration and development of the block.
Profit forecast: we expect the company's net profit from 2020 to 2022 to be 1.44,1.54 and 169 million yuan, not considering additional issuance for the time being, corresponding to EPS 1.17,1.25 and 137 million yuan, maintaining the recommended rating. If the company succeeds in this increase, the company's profitability is expected to be further improved after the increase in the share capital of the company.
Risk tips: falling natural gas prices; policy risks
