Haimer Technology: A small giant in the field of oil service equipment. “Oil and Gas+New Energy” Shuangyu Qifei Company is a leading multinational enterprise in the oil service equipment industry. Its main products include multi-phase metering, underground testing/well testing and production increase instruments and tools, fracturing equipment and related services, and oilfield digital solutions. After 29 years of development, the company has become one of the three major suppliers of oilfield multiphase metering product services in the international market. At the same time, the subsidiary Sitan Instruments is in an international leading position in technology in the field of “underground survey/well testing, instruments and tools to increase production”; the subsidiary Qinghe Machinery is an excellent supplier and partner of the world-renowned oil service company and fracturing service provider Halliburton, and is also a major supplier of hydraulic end products for major domestic oil companies, and has been recognized by the Ministry of Industry and Information Technology as the second batch of specialized and new “little giant” enterprises.
The controlling shareholder of the company changed to Shandong New Journey in 2023, relying on superior resources to accelerate the deployment of new energy business. In the first three quarters of 2023, the company achieved revenue of 352 million yuan, +33.98% year-on-year, net profit of 0.02 billion yuan, and realized net profit of 0.02 billion yuan, turning a loss into a profit over the previous year.
The prosperity of the oil service market continues to rise. Shale gas+digitalization opens up incremental space in the short to medium term. Global oil and gas supply and demand maintain a tight balance, and the maintenance of oil prices at medium to high levels drives the expansion of oil companies' upstream capital expenditure, driving the oil service market prosperity to continue to rise. The global oil services market in 2022 was 269.3 billion US dollars, +33.5% over the same period; in the long run, oil and gas will remain the dominant energy position. The national energy security strategy requires increased oil and gas storage and production, which is expected to boost the long-term demand center for oil service equipment.
Furthermore, with the arrival of the fifth oil and gas production technology revolution, exploration and exploitation of unconventional oil and gas resources such as shale gas has increased, and combined with the acceleration of the digital transformation of the oil service value chain, it is expected that the performance growth space of oil service enterprises will be further expanded.
The company's competitive advantage: Accelerating digital transformation based on technology, relying on new energy from Shanhai, China, and entering new energy 1) Product technical advantages: The company has been deeply involved in the oil service industry for many years, has a sound technological innovation system, and has successfully developed the first domestic set of underwater multi-phase flowmeter engineering products, which have been used in projects such as CNOOC Liuhua 29-2 and Liuhua 21-2 to promote domestic production and replacement of high-end offshore oil field equipment; 2) Digital advantages: The company has pioneered the digitalization of oilfields in China, and is expected to accelerate the overall commercial application of overseas performance; 3) Channel advantage: company Overseas operating channels have outstanding advantages, and overseas customer resources are abundant, and orders have been obtained one after another in Saudi Arabia, Oman, the United Arab Emirates and other countries; 4) Building a second growth curve: the company relies on Shanhai Xinneng's resource advantages in the field of new energy to accelerate new business layouts such as CCUS and hydrogen energy, which is expected to create new performance growth points.
Investment suggestions: We expect the company's operating income for 2023-2025 to be 750/ 952/1,213 billion yuan, net profit of 0.63%/1.30/ 180 million yuan, corresponding EPS of 0.16/ 0.34/ 0.47 yuan, and current stock price corresponding to PE of 46.98/ 22.72/16.39x. Optimistic about Haier Technology's domestic replacement of offshore oilfield equipment, new energy track layout, and digital empowerment, it was given 30 times PE in 2024, corresponding to the target price of 10 yuan, coverage for the first time, and a “buy” rating.
Risk warning: risk of overseas operations and foreign trade, risk of fluctuations in international oil prices, exchange rate risk, risk related to technology research and development.