The company operated steadily in Q3 2024

The company released its 2024 three-quarter report. In the third quarter, it achieved operating income of 3.09 billion yuan, a year-on-year decrease of 7.38%; realized net profit attributable to shareholders of listed companies of 0.51 billion yuan, a year-on-year decrease of 2.04%; and realized net profit of 0.477 billion yuan with non-recurring profit and loss attributable to shareholders of listed companies, a decrease of 6.74% year-on-year. Basic earnings per share were $0.50, a year-on-year decrease of 1.22%. The net interest rate of the company's operations has increased compared to the same period last year, and the company's operating efficiency has improved.

Contract debt has increased significantly, and three-fee control is stable

According to the company's three-quarter report, contract liabilities increased by 99.14% compared to the beginning of the year, mainly due to increased advance payments from customers receiving new orders. Sales expenses increased 13.75% over the same period last year, management expenses increased 6.07% over the same period last year, R&D expenses increased 11.25% compared to the same period last year, and three-fee control was relatively stable.

Shareholder buybacks show confidence

The company held the 2024 Second Extraordinary General Meeting of Shareholders on September 26, 2024 to review and pass the “2024 Semi-Annual Profit Distribution and Capital Transfer Capital Proposal”. Using the company's total share capital of 1,023,855,833 shares on June 30, 2024, excluding 1,023,849,677 shares stored after 6,156 shares in the company's dedicated securities account to all shareholders, a cash dividend of 1.2 yuan (tax included) will be distributed to all shareholders for every 10 shares. 0 bonus shares (tax included) will not be transferred to all shareholders. . As of October 18, 2024, the company's equity distribution plan has been implemented, demonstrating the company's confidence.

Investment advice

We are optimistic that the company's oil service fracturing equipment will lead the industry+the overseas penetration rate will continue to increase. The maintenance forecast is:

The 2024-2026 revenue was 15.355/17.082/19.151 billion; the projected net profit to mother for 2024-2026 was 2.771/3.242/3.829 billion yuan, respectively; and the corresponding EPS for 2024-2026 was 2.71/3.17/3.74 billion yuan. The PE corresponding to the company's current stock price is 13/11/9 times, maintaining an “incremental” investment rating.

Risk warning

1) Breakthroughs in technology research and development fall short of expectations; 2) downstream demand falls short of expectations; 3) loss of core technicians; 4) large fluctuations in raw material costs affect gross profit margins; 5) the risk of oil price fluctuations.