Incident 1: The company released its 2024 quarterly report: achieved operating income of 5.7 billion yuan (-11% YoY, -42% month-on-month), net profit of 475 million yuan (YoY +6%, +92% month-on-month), and net profit of 400 million yuan (+23% YoY, +155% month-on-month) after deducting net profit from the mother.
Incident 2: The company issued the “Shareholder Return Plan for the Next Three Years (2024-2026)”. Except for special circumstances, on the premise that the company's cash can meet the company's continuous operation and long-term development, the company distributes dividends in cash, with a dividend ratio of not less than 30%.
The market development was smooth, promoting the continuous development of the company's business: as of 24Q1, the company had achieved a contract amount of 6.517 billion yuan, +11% over the same period last year, including 6.110 billion yuan in China and 407 million yuan overseas. As of 24Q1, the total number of orders the company had in hand was about 40.5 billion yuan.
Projects under construction progressed steadily, with full workload driving performance improvement: 1) Domestic: As of 24Q1, the company actively promoted domestic and foreign oil and gas engineering construction, with a total of 63 projects above the operating scale, 4 of which were completed and delivered; completed the onshore construction of 19 conduit frames and 7 seater blocks, offshore installation of 9 conduit racks and 6 seater blocks, 68.9 km of submarine pipelines and 39 km of submarine cable laying; the construction business completed 136,000 tons of steel processing, +13% over the same period; the construction business completed 136,000 tons of steel, +13% over the same period; the installation and other offshore operations invested 0.48,000 days, due to offshore investment of 0.48,000 days workload The distribution is different. The total investment in the reporting period was -23%, but among them, ships installed large structures were +336% year-on-year, and the year-on-year ratio for owned ships was +438 days. 2) Foreign side: China's first Saudi Aramco offshore oil and gas independent general contracting project - the first batch of 6 conduit racks of the Saudi CRPO122 project was loaded at the Qingdao site and officially entered the maritime transportation and installation stage; the CPF equipment and pipe gallery infrastructure of the Ugandan KingFisher project have been fully advanced, and storage tank installation work has begun; the Saudi Marjan project, the P79 FPSO upper block project, and the BASF module project are progressing steadily according to plan; the Qatar ISND5-2 project has begun preliminary preparations.
The company directly benefited from the increase in CNOOC's offshore oil and gas capital expenditure: CNOOC's total capital expenditure budget in 2024 was 125-135 billion yuan, of which CNOOC estimated that capitalization expenses for exploration, development and production would account for 16%, 63%, and 19% respectively; China and overseas will account for 72% and 28% respectively. CNOOC's increased capital expenditure will increase the workload at sea, which is conducive to enhancing the company's performance.
Profit forecast and investment rating: Based on the development of the company's domestic and foreign projects and the significant increase in the company's workload, we maintained the company's net profit of 19.4, 23.3, and 2.75 billion yuan respectively in 2024-2026. According to the closing price on April 24, 2024, corresponding to PE 15, 12, and 10 times, respectively.
In the context of high oil prices, the oil service engineering industry continues to be booming and maintains a “buy” rating.
Risk warning: risk of macroeconomic fluctuations; risk of sharp fluctuations in international oil prices; risk of exchange rate fluctuations; upstream capital expenditure falling short of expectations; progress of oil and gas field development projects falling short of expectations