Main points of investment
In the first half of the year, the revenue increased significantly, and the net profit nearly tripled: the company's total 2019H1 revenue was 755 million yuan, up 39.6% from the same period last year. Thanks to the increase in the prices of some technical services this year, pre-tax profit increased by 273.2% to 91 million yuan, while the net profit from home was 75 million yuan, an increase of 281.8%.
Financial performance continued to improve: profitability increased and profit margins increased significantly, of which 2019H1's operating profit margin was 13.72%, up 5.93% from 2018H1's 7.79%, and 2019H1's net profit margin was 9.97%, 6.72% higher than 2018H1's 3.25%. The asset-liability ratio is stable, and 2019H1's asset-liability ratio is 47.2%, which remains stable over the past few years.
Business sectors in the first half of the year: 2019H1 reservoir business revenue is 246 million, up 8.18% over the same period last year; drilling business revenue is 312 million, up 40.79%; and completion business revenue is 196 million, up 115.21% over the same period last year.
The company's on-hand orders are growing rapidly: by July 31, 2019, the total amount of new orders signed by the company this year and deferred last year was about 2.6 billion yuan, an increase of about 37.92% over the same period last year. Among them, reservoir plate, drilling plate and completion plate accounted for 30.7%, 49.6% and 19.7%, while orders from domestic and overseas markets accounted for 63.6% and 36.4%.
The company's domestic and foreign business has developed rapidly: traditional regional advantage projects have been consolidated, unconventional oil and gas markets have won new orders, and overseas markets have performed well.
Our point of view: 1251.HK is a private leader in China's oil service industry. With the rise in oil prices and the increase in demand from upstream customers, the oil service industry has entered a stage of recovery. At present, the company has sufficient orders on hand, which is 2.6 billion yuan, and the annual conversion rate of orders is 80%. The company's performance this year will have a good support.
Risk tips: 1, international geopolitical risk; 2, exchange rate fluctuation risk; 3, three barrels of oil capital expenditure is not as expected.