1. The company's profit situation

In the first half of 2024, the company's revenue was 1.918 billion yuan, up 3.43% year on year, and net profit reached 0.441 billion yuan, up 2.54% year on year.

2. Aksu Zhongman Oil & Gas

1) Production situation: In the first half of 2024, the company produced 0.3163 million tons of crude oil, an increase of 0.0412 million tons over the same period last year, and an increase of 14.98% over the same period last year.

2) Profit situation: In the first half of 2024, we calculated that the operating income of the company's domestic crude oil sales business was 0.952 billion yuan; after our calculation, the subsidiary's crude oil achieved a price of 3,624 yuan/ton, equivalent to 72.82 US dollars/barrel.

3) Cost situation: According to our calculation, the unit cost of the domestic crude oil business is 1,333 yuan/ton, equivalent to 26.78 US dollars/barrel.

3. Shareholders' buybacks show confidence

On July 17, 2024, Chairman Li Chundi or the enterprise under his control planned to increase the company's holdings of unlimited sales and circulation of A shares through the Shanghai Stock Exchange system through centralized bidding transactions within 12 months, with an increase of 5,000 to 100 million yuan.

4. Fixed increase project launched

On August 9, 2024, the company released the “Report on the Issuance of Shares to Specific Targets by Zhongman Oil and Gas Group Co., Ltd.” The total number of shares issued to specific targets this time was 62.338 million shares, and the total amount of capital raised was RMB 1.18 billion.

5. Profit forecasting and valuation

Maintain the company's net profit to mother for 24/25/26 at 1.03/1.27/1.58 billion yuan, and the corresponding EPS was 2.24/2.74/3.43 yuan/share, maintaining an “incremental” rating.

Risk warning: 1) The risk that oil prices will fall, causing the company's profits to fall; 2) the risk that the company's crude oil production will fall short of expectations; 3) Crude oil exploration is risk exploration, and there is a risk that future blocks will not produce oil.