油田技术服务带动公司业绩稳定增长。公司持续推动各项关键核心技术转化应用，前三季度油田技术服务主要业务线作业量同比保持增长，总体收入规模保持增长。历史上看，油田技术服务板块毛利率波动相对更加稳定，预期随着油田技术服务板块贡献提升，公司业绩稳定性有望增强。Key points of investment:
Company announcement: In the first three quarters of 2024, the company achieved operating income of 33.661 billion yuan, an increase of 14.1% year on year; net profit to mother was 2.445 billion yuan, up 7.5% year on year; net profit after deducting non-return to mother was 2.476 billion yuan, up 12.1% year on year. Among them, Q3 achieved operating income of 11.133 billion yuan, a decrease of 10.1%; net profit to mother of 0.852 billion yuan, a decrease of 10.9%; net profit after deducting non-return to mother was about 0.872 billion yuan, a decrease of 8% month-on-month. The decline in single-quarter results was mainly affected by the suspension of orders in the Middle East and the typhoon. Driven by the rising oil service boom and the increase in the contribution of the oil technology sector, the company's gross margin reached 17.24% in the first three quarters, an increase of 1.04 pct over the previous year. In terms of expenses, the company's expense ratio reached 7.08% in the first three quarters, an increase of 0.61 pct over the previous year, mainly due to a significant increase in financial expenses, and we judge that it was mainly due to changes in the US dollar exchange rate.
Drilling sector operations declined due to the suspension of orders in the Middle East and the typhoon. The number of working days on the company's drilling platform reached 13,166 in the first three quarters, down 0.5% year on year. Among them, the number of days the jack-up platform worked reached 10,595 days, an increase of 2% year on year; the number of working days on the semi-submersible platform reached 2,571 days, down 9.7% year on year, mainly affected by the typhoon. In terms of usage rate, due to the suspension of orders in the Middle East and the typhoon, the daily usage rate of the company's drilling platform reached 83.6%, a year-on-year decrease of 2.6 pct. Among them, the usage rate of the jack-up platform fell 1.7 pct; the usage rate of the semi-submersible platform fell by 6 pct. The company announced that 2 of the 4 suspended drilling platforms in the Middle East have secured new service contracts, and operations will commence in the third and fourth quarters of this year, respectively. The remaining 2 drilling platforms are expected to receive new contracts in the fourth quarter, which will support future performance. It is expected that as the offshore oil service boom rises, we judge that the drilling sector's performance is still resilient.
Oilfield technical services drive steady growth in the company's performance. The company continued to promote the transformation and application of various key core technologies. In the first three quarters, the volume of operations in the main business lines of oilfield technical services continued to grow year-on-year, and the overall revenue scale continued to grow. Historically, gross margin fluctuations in the oilfield technical service sector have been relatively more stable. It is expected that as the contribution of the oilfield technical service sector increases, the stability of the company's performance is expected to increase.
The volume of operations in the ship sector and the geophysical exploration sector increased year-on-year. By the end of the third quarter, the company's ship service business operated and managed more than 200 workboats, with a cumulative total of 53,162 days of operation, an increase of 29.4% over the previous year. In the geophysical exploration sector, the two-dimensional collection workload was 15,306 kilometers, an increase of 17.8% over the previous year; the three-dimensional collection workload was 21,426 square kilometers, an increase of 79.6% over the previous year.
It is expected that in the future, as the offshore oil service industry improves, the company's marine sector and geophysical exploration sector performance is expected to continue to improve.
Offshore capital expenditure is still in an upward cycle, supporting the company's performance improvement. CNOOC's overall capital expenditure reached 95.339 billion yuan in the first three quarters, an increase of 6.6% over the previous year, providing a guarantee for the company's orders. According to Spears & Associates, the size of the global oilfield services market will increase 7.1% year over year in 2024, and the industry is growing strongly. It is expected that oil prices will remain at medium to high levels in the future, global investment in offshore oil and gas exploration and development is expected to continue to increase, and the company's orders and performance are expected to continue to rise.
Investment analysis: Considering that the impact of the typhoon and the expected decline in oil prices may slow the growth rate of offshore oil and gas capital expenditure, we lowered our 2024-2026 profit forecast to 3.25, 4.02, and 4.99 billion (originally 3.61, 4.25, and 5.05 billion). Corresponding PE is 23X, 18X, and 15X, respectively, maintaining a “buy” rating.
Risk warning: Oil prices fluctuated greatly, upstream capital expenditure fell short of expectations, daily rate increases fell short of expectations, suspended drilling rigs in the Middle East did not meet expectations, etc.