Benefit from the high magnificence of drilling and completion equipment industryJerry sharesThe China News reported that the performance exceeded expectations. Jerry AG announced that 1H homing net profit was 465 million yuan to 521 million yuan, an increase of 150% to 180% over the same period last year. 2Q's net profit was 355 million yuan to 411 million yuan, an increase of 134% to 170% over the same period last year, exceeding expectations. The main reason is to increase investment in the exploration and development of unconventional oil and gas resources such as shale gas, and the drilling and completion equipment industry has maintained a high boom since it hit bottom in early 2018.

Shale gas production is already economical, so it is judged that the drilling and completion equipment industry will maintain a high boom in the second half of the year to ensure performance growth in 2020. From January to May 2019, China's cumulative output of natural gas was 72.49 billion cubic meters, an increase of 9.8 percent over the same period last year. Natural gas imports were 39.43 million tons, an increase of 13.4 percent over the same period last year. The degree of external dependence of natural gas continues to increase. Unconventional oil and gas resources such as shale gas are an important focus for ensuring energy security. According to the grass-roots investigation of the industrial chain, with the improvement of technical efficiency and the scale effect brought by the rapid growth of shale gas production, domestic shale gas exploitation is now economical and is expected to be in 2019.Petrochina Company LimitedBidding for 148 fracturing vehicles, an increase of 76% over the same period last year, will ensure performance growth in 2020 with the landing of the tender. The company's net profit from 2019 to 2020 will be raised by 1.206 billion yuan and 1.93 billion yuan, up 96.1% and 60% from the same period last year. The company will be valued 15 times in 2020, and the target price will be raised to 30.22 yuan per share.

According to the Petrochina Company Limited Information Center, the drilling footage of PetroChina Oil Service increased by 10% in 2018 compared with the same period last year, and fracturing increased by 52%. In 2019, the growth rate of Petrochina Company Limited drilling workload will further increase to 15%, 20%, and horizontal wells will reach 2000. The number of unconventional oil and gas wells such as shale gas and tight gas is expected to double, so drilling and completion equipment such as fracturing trucks is still in short supply. Since January 2019, Petrochina Company Limited Group has released a large number of bidding projects for drilling and completion equipment accessories, so we judge that the bidding volume of drilling and completion equipment will increase significantly in 2019. In addition, in the medium term, shale gas accounts for 30 per cent of the annual increase in domestic natural gas production, and if the contribution of shale gas production is excluded, the growth rate of conventional natural gas production is only about 5 per cent. it is a far cry from the compound growth rate of 10 per cent of domestic natural gas production required by the State Council to reach 200 billion square meters in 2020. Therefore, in the medium term, the drilling and completion equipment industry will also be in a high business cycle.

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