海默科技(300084):进一步收购思坦仪器 深耕水下和井下领域

Hymer Technology (300084): Further acquires Sitan Instruments to further expand the underwater and underground fields

聯訊證券 ·  09/29/2017  · Researches

Key points of investment

Event: Acquisition of 57.19% of Sitan's shares

On September 28, 2017, Hymer Technology disclosed a major asset purchase report (draft). It plans to pay 457 million yuan in cash to acquire 57.19% of Sitan's shares. After the transaction is completed, the company holds a total of 85.01% of Sitan's shares. In the future, the company will also use cash payments to purchase a total of 3.52% of Sitan's remaining shares held by the five directors and supervisors of Sitan Instruments.

The company, which is deeply involved in underwater and underground fields and lays out in the fields of “smart oil wells” and “digital oil fields”, acquired 27.82% of Sitan's shares in November 2016. After this acquisition, the company will hold 85.01% of Sitan's shares. Sitan Instruments focuses on technical fields related to increasing and stabilizing oil field production. The main products are divided into four categories according to their purpose: water injection process instruments, oil and gas production process instruments, dynamic monitoring and logging instruments, and other engineering technical instruments to increase oil and gas production. They are divided into 24 product series, with more than 100 product segments. Sitan Instruments listed the new third board on July 17, 2015, code 832801.OC.

The acquisition of shares in Sitan Instruments is a strategic move for the company to enter the fields of “intelligent oil wells” and “digital oil fields”, implement the “two-step strategy” of oil and gas exploration and development (underwater and underground), and deepen oil and gas field production optimization services to help customers improve recovery rates and operating cost efficiency. By holding Sitan Instruments, the company has fully entered market segments such as logging instruments and underground equipment to accelerate the expansion and business layout of the oil and gas industry; the company's international market development experience and channels can also provide support for Sitan Instruments products and services to go overseas and achieve collaboration and linkage.

The company's performance will increase significantly after the further acquisition of Sitan Instruments

In 2016, Hymer Technology's revenue was 285 million yuan, and the net profit of the mother was 7.08 million yuan. Sitan Instruments earned 229 million yuan and net profit of 81.83 million yuan in 2016. The company's profitability will increase significantly after the acquisition is completed. The controlling shareholder of Sitan Instruments promised that its net profit for 2017-2019 will not be less than 70 million, 77 million and 85 million respectively. If the performance standards are not met, the company will receive performance compensation from Sitan Instruments management or Sitan Electronics. Based on a holding ratio of 85.01% and promised performance, Stan Instruments will contribute 65.46 million yuan and 72.26 million yuan respectively in 2018-2019.

Oil and gas equipment manufacturing and oil services are gradually picking up. Oil and gas development is expected to contribute to performance. Market demand for oil and gas field equipment manufacturing business has increased, and the company's performance has begun to improve. In terms of fracking equipment, demand in the North American market is strong, the operating rate of domestic fracking construction has increased, and orders for the company's hydraulic end products are full.

In terms of multiphase flowmeter products, the company's international market orders remained at the same level as previous years. The number of orders in the domestic CNOOC market increased compared to previous years. The company participated in and won bids for many multi-phase flowmeter projects already tendered by CNOOC this year. The recovery in the company's mobile testing service business demand based on multiphase flow meter products is relatively slow and slow. In terms of oilfield environmental protection equipment, market work was promoted through on-site service in the first half of the year to innovate sales models. It is expected that oil field environmental protection equipment sales will receive batch orders in the second half of the year.

The company owns the Niobrara oil and gas block jointly developed with Carrizo in the US and the self-developed oil and gas block in the Permian Basin in Texas, with a total equity area of about 13,000 acres. The company's Niobrara joint operation block achieved equity production of 41,000 barrels of crude oil in the first half of 2017, equivalent to 58,300 barrels of natural gas and condensate; the company's Permian Basin self-developed block had 3 production wells, achieving 0.67 million barrels of crude oil and 39.24 million cubic feet of natural gas, and another 2 units are expected to be completed and put into operation in the second half of the year. The company's shale oil and gas development business not only showcased its own mining technology, helped expand the oil and gas equipment sales and oilfield service business, but is also expected to contribute to performance in the current context of rising oil prices.

Profit Forecasts and Investment Ratings

Assuming that the acquisition of 57.19% of Sitan's shares is completed at the end of 2017, we expect that in 2017-2019, the company's operating income will be 309 million yuan, 610 million yuan, and 693 million yuan respectively, and net profit of the mother will be 14 million yuan, 33 million yuan and 55 million yuan respectively, and EPS will be 0.04 yuan, 0.09 yuan, and 0.14 yuan respectively. The latest closing prices correspond to PE 264 times, 115 times and 69 times respectively, maintaining the “increase” rating.

Risk warning

Sitan's profit fell short of expectations; oil field equipment sales and oil service recovery fell short of expectations

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