Incident: On November 5, at the Abu Dhabi International Petroleum Exhibition (ADIPEC), Jerry Oil & Gas Engineering Co., Ltd. (“Jerry Oil & Gas Engineering Group”), a wholly-owned subsidiary of Jerry Group, received an official award from the Abu Dhabi National Petroleum Corporation Onshore Company (ADNOC ONSHORE, “ADNOC”) for the EPC project for the digital transformation of the well site. The project amount reached 0.92 billion US dollars, approximately RMB 6.555 billion.

Build a benchmark project for smart oilfields in the Middle East. ADNOC Onshore plans to upgrade existing wellhead facilities in the Bab, Bu Hasa and South East oil field blocks to achieve digital operation, covering various well types such as oil wells, water injection wells, WAG wells, and wastewater treatment wells. The main content includes intelligent transformation and digital construction work of various old well sites. The project aims to improve oil field production efficiency, improve production safety, and carry out data linking, data aggregation and analysis by adding various kinds of intelligent equipment to achieve the three oil fields from traditional manual inspection to unattended. Digital well field transformation to create smart oil fields. The project involves more than 2,000 oil and gas production wellhead facilities and more than 40 different types of well sites. The overall renovation is expected to be completed in 2027. This is ADNOC's largest oil and gas well digital upgrade project to date. After the transformation, it will completely solve the problems of high maintenance and labor costs under the traditional management model, and establish it as a benchmark project for smart oil fields in the Middle East.

The advantages of industrial synergy in the Middle East region are prominent, and major contracts have been implemented one after another. Since 2024, the company has increased its capital by 0.12 billion US dollars to build a high-end oil and gas equipment manufacturing base in Dubai; signed a Mansouria development and production contract with the Central Iraqi Petroleum Company in May; successfully won the Bahrain National Petroleum Company gas project in September; and obtained an official award for the ADNOC wellfield digital transformation EPC project in November. The undertaking of many major projects shows that the company's recognition in the high-end oil and gas market in the Middle East continues to increase. The Middle East region is the company's most comprehensive overseas market. It opens up markets through superior equipment products and collaborates to drive other business segments. In 2024, the natural gas compressor and service business expanded rapidly, and the company's business scale and market share in the Middle East region gradually increased.

Profit forecasting and investment advice. The company's net profit to mother for 2024-2026 is estimated to be 2.68, 3.22, and 3.63 billion yuan, respectively. Corresponding to the current share price PE, it is 14, 12, and 10 times, respectively. The compound net profit growth rate for the next three years will be 14%. Maintaining a “buy” rating considering the company's leading technology in electric drive fracturing equipment and continued breakthroughs in overseas business.

Risk warning: the risk of oil and gas price fluctuations, overseas business expansion or falling short of expectations, and increased risk of industry competition.