The epidemic superimposed the impact of low oil prices, and the performance in the first half of the year was under pressure.
China Oil Energy announces its results for the first half of 2020. Due to the influence of COVID-19 epidemic and low oil prices, the on-site operation of projects at home and abroad has encountered obstacles to varying degrees, and the performance has declined significantly. In the first half of 2020, the company realized revenue of 610 million yuan, down 19.3% from the same period last year; net profit from home was 21 million yuan, down 71.5% from the same period last year; and earnings per share was 0.01 yuan.
Drilling operations are greatly impacted.
In terms of business sectors, the drilling services sector was hit hard, with revenue of 190 million yuan in the first half of 2020, down 40.4% from the same period last year, mainly due to the drop in oil prices, oil companies cutting some capital expenditure on exploration and development, and the decline in the number of new drills. at the same time, the epidemic has led to varying degrees of delays in the construction of teams at home and abroad. The revenue of the reservoir plate is 230 million, down 7.4% from the same period last year; the reservoir plate is mainly related to the operating expenses of upstream oil and gas companies, which is less affected by oil prices, and the revenue scale is relatively stable.
The revenue of the completion plate is 190 million, down 0.6% from the same period last year; the domestic exploration and development heat has not decreased, and the scale of completion tools business has increased, but the income of Turkmenistan, Kazakhstan and other places has declined.
The domestic market is relatively stable, and the overseas market is obviously affected.
The company's revenue in the domestic market was 440 million yuan, down 6.6% from the same period last year, while revenue in the overseas market was 170 million yuan, down 40% from the same period last year. The wind direction of the domestic energy security policy remains unchanged, the capital expenditure of the three major oil is relatively strong, and the company's performance in the domestic market is relatively sound. The number of wells in Xinjiang, as a key market, is basically the same as that in the same period last year, but it is restricted by the decline in the overall service prices of the industry. Income has decreased.
The company's overseas business was greatly affected by the epidemic, the work volume of the oil service team decreased, and revenue from Kazakhstan fell 23.7% compared with the same period last year. At present, the international oil price has returned to the median level of US $40 per barrel, and the market demand has gradually recovered. if the subsequent overseas epidemic can be further controlled, the implementation of overseas projects is expected to be gradually normalized.
Maintain a "buy" rating
We downgrade the company's 20-22 EPS forecast to RMB 0.03, 0.07, 0.11 to reflect the impact of the epidemic and oil prices on the company's business, especially the construction of overseas operations. The company takes the initiative to open up new customers, improve fine management, increase efficiency and reduce costs in an unfavorable environment. With the recovery of oil prices and the gradual normalization of overseas construction, the future performance is expected to recover and maintain the "buy" rating.
Risk hints: oil price fluctuation risk, overseas market risk, exchange rate fluctuation risk