CNOOC (601808) Tracking Report: Growth in Oil Technology Supports Company Performance Evaluation
Benefiting from CNOOC’s “Seven-Year Action Plan”, the company’s segmented business volume is leading the recovery of the market; oil technology business technology breakthroughs and expansion of the internationalization strategy open up a broad space for development and boost uplift.
Raise the company’s 19-21 year performance forecast. The CAGR of the company’s performance in the next two years is expected to be above 50%. With reference to the estimates of international peers and considering a certain premium, the company will be given13.
Target price of 15 yuan, maintain “overweight” and “buy” ratings on H shares.
Exploitation is the traditional focus, and oil technology has become a new force.
Historically, the company’s long-term drilling revenue and profit accounted for more than 40%, and the assets of the sector accounted for more than 60%, which has been the company’s traditional focus.
Since 2016, the revenue and profit contribution rate of the oil technology sector has increased rapidly. From 2015H1 to 2019H1, the average annual revenue of this segment is + 46%, and the average annual operating profit is + 56%.
In 2019H1, the revenue / operating profit contribution ratio of the oil technology sector has reached 49% / 93%, and the profit level has returned to a historically high level.
Exploit the leading market to recover, the utilization rate will be the first, and the daily rate will follow.
Benefiting from CNOOC’s “Seven-year Action Plan”, the company’s drilling business resumed ahead of the market.
According to our budget, according to the current daily rate level, when the company’s calendar day utilization rate reaches a historical high of 95%, operating profit is about 3 billion; if the profit is to reach a historical high of 65 trillion, the daily rate needs to exceed 120,000 US dollars, compared withCurrent level + 40%.
Historical experience shows that the increase in the daily rate of rolling business lags behind the utilization rate when it reaches a high point for more than one year.
The internationalization strategy of oil technology sector + technological breakthroughs open up room for growth.
In 2012, the company set up a research and development team. From 2017 to 2018, the company achieved breakthroughs in directional drilling and wireline logging technology.
As of 2018, the company has successfully squeezed out of the international ranking of the system (CNOOC), and the time is ripe for the oil technology business to explore overseas markets.
In 2018, the company’s oil technology market share was only 0.
6%, compared with 9% of SLB has a lot of room for improvement.
According to the company’s plan, the oil technology segment will account for 50% of revenue in 2020 and 70% in 2025; we predict that if the target can be achieved, the company’s oil technology segment revenue will exceed 20 billion and 40 billion US dollars, and operating profit will exceed 4.5 and 12.5 billion yuan.The contribution rate is over 50%.
Risk factors: The oil mechanics business is subject to production performance expectations; accidents caused by overseas operations; the gross profit margin of domestic oil mechanics services is dragged down by Party A’s pricing; the 深圳桑拿网 company’s oil technology research and development progress is slow and the market is seized by others; CNOOC upstream explorationExpenditure on development was lower than expected; expenditure expenses rose sharply.
Investment suggestion: The oil technology business estimate is higher than the previous forecast and the transition is small. Increasing the company’s oil technology business contribution rate will effectively improve the estimate.
Considering the company’s broad development space for its oil technology business, CNOOC’s capital expenditure intensity exceeded expectations and raised the company’s net profit attributable to the parent company in 2019-21 to 17.
300 million (was 16.
5 ‰), corresponding to EPS prediction 0.
84 yuan, the current price of A shares corresponds to PE34 / 21/15 times.
Comprehensive PE and PB estimation methods, with reference to international peer assessments, considering that the CAGR of performance in the next two years exceeds 50%, the company should enjoy a certain premium and give a target price of 13.
15 yuan, maintaining the investment rating of “overweight” for A shares and “buy” for H shares.