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华油能源(1251.HK)2020年度业绩点评:油价复苏引领21年业绩反转

Huayou Energy (1251.HK) 2020 Annual Results Review: Oil Price Recovery Leads to a 21-Year Performance Reversal

光大證券 ·  Mar 28, 2021 00:00

  The 2020 pandemic combined with low oil prices affected performance

Due to the double impact of the COVID-19 pandemic and falling oil prices, the global oil service industry is at a cyclical low, and Huayou Energy lost its 2020 full-year performance. Revenue for the full year was RMB 1.29 billion, a year-on-year decrease of 33.9%; the mother's net profit loss was RMB 0.9 billion; and earnings per share were RMB -0.05. The company's EBIDTA rate was 6.5%, down 18.1 percentage points from the previous year; the net interest rate was -7.6%, down 17.9 percentage points from the previous year.

The drilling business was hit hard, and the decline in the reservoir business was less affected by the epidemic and oil prices. Major customers drastically cut capital expenses, service prices fell, workload was reduced, and revenue from all business segments of the company declined. The drilling services sector was greatly impacted, achieving annual revenue of 430,000 yuan, a year-on-year decrease of 45.2%; completion services achieved revenue of 290 million, down 39.7% from the previous year; and reservoir services achieved revenue of 560 million, down 16.1% from the previous year. The reservoir sector was mainly related to the operating expenses of upstream oil and gas companies, and the extent affected by oil prices was relatively small.

The energy security strategy guarantees domestic development efforts; overseas markets have fully recovered, large orders have been received, and domestic energy security policy trends have not changed, and “14th Five-Year Plan” oil and gas development efforts will continue to be strengthened. The company continues to maintain its leading position in the completion business in the Xinjiang market, and the Sichuan and Chongqing markets are developing steadily. At the same time, the company has further developed the coalbed methane market. It is expected that it will continue to occupy a leading position in the industry in the future. Oil companies will continue their “seven-year action plan” in '21. Upstream exploration and development spending is expected to return to a high level, and the company still has more opportunities in the domestic market.

As global demand recovers, international oil prices have recently risen to more than 60 US dollars/barrel, and oil and gas development in overseas markets continues to pick up. In the Indonesian market, the company won a two-year completion service and steel wire operation service contract; in the North American market, the company continued to manufacture and sell high-end electronic pressure gauges for underground monitoring, and successfully obtained long-term orders for offshore oil wells. As the global epidemic is gradually brought under control and the economy recovers, it is expected that the execution of the company's overseas projects will gradually normalize.

Maintain a “buy” rating

Based on the continued high performance of oil prices, oil and gas companies are expected to increase spending, the oil service industry is rapidly recovering, and new orders are expected to be received. We slightly raised the company's net profit forecast for 21-22 by 8.8%/1.4% to 150 million/200 million yuan, and introduced the 23 net profit forecast of 240 million yuan. The corresponding EPS is 0.08/0.11/0.13 yuan respectively. Under an unfavorable environment, the company took the initiative to develop new customers, improve fine management, increase efficiency and reduce costs. With the recovery in oil prices and the gradual normalization of overseas construction, future performance is expected to reverse and maintain the “buy” rating.

Risk warning: oil price fluctuation risk, foreign market risk, exchange rate fluctuation risk

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