Investment advisory support|Yu Xiaoming, editor|Gu Jinfeng
Source: Jufeng Investment Advisory, Good Stock Application
The situation in the Middle East has intensified, concerns about potential supply risks have increased, and international oil prices have continued to rise. Judging from the weekly data and the EIA short-term outlook data, although the U.S. crude oil production will maintain growth in the next two years, the center of gravity of international oil prices is still expected to remain relatively high, which will continue to benefit upstream oil and gas companies. Bringing a leading oil service today, let's take a look at the company's investment logic:
Refining capex has fallen, and global refining capacity production is about to slow down
The growth rate of investment in China's refining industry has been negative for 16 consecutive months since it turned negative in September 2022, and the duration and intensity of this round of negative growth have significantly exceeded the de-capacity stage in 2015-2016, and the growth rate of fixed asset investment in oil and other fuel processing industries in 2022 will be -10.7% year-on-year and only -18.9% in 2023. Global new capacity is expected to slow after 2024: RBN expects the total global net new capacity to be only 1.3 million barrels per day from 2025 to 2028, with an improving supply-side trend.
The recovery at home and abroad is resonant, and demand is expected to continue to grow at a high rate
In 2023, China's petrochemical industry will recover effectively: crude oil processing volume will be +9% year-on-year, gasoline and diesel consumption will be +12%/13% year-on-year, and the growth of major chemicals will turn from negative to positive, among which the demand growth rate of aromatics/chemical fiber industry chain will be relatively high, and the consumption growth rate of PX-PTA-filament yarn will be about 20%, and PP/PE consumption growth will also be 4%-8%.
In 2024, as the manufacturing PMI index in major regions of the world is in the recovery range, and both China and the United States are at the bottom of the inventory cycle, the demand for replenishment is expected to bring further improvement in exports and domestic demand, and the recovery momentum is expected to continue in 2024.
The peak season of oil blending is superimposed on the peak maintenance of refineries, and the performance in the second quarter is elastic
At present, the United States is gradually entering the peak consumption season, gasoline inventories are low, and the demand for oil blending components is high, which is expected to boost the demand for aromatic blending and export in Asia, and then raise the profit center of global refined oil and aromatics.
Domestic refineries gradually entered the peak period of maintenance in the second quarter, and ethylene maintenance in Northeast Asia is also at a high level, and from the perspective of new ethylene production capacity, although there are many sets of equipment production plans, most of them are concentrated at the end of the year, and the first quarter to the third quarter is expected to have limited landing capacity.
Bringing a leading oil service today, let's take a look at the company's investment logic:
1. The Company's business involves all stages of oil and gas exploration, development and production, which are mainly divided into four major sectors: drilling services, oilfield technical services, ship services and geophysical exploration services.
2. The company occupies most of the market share of China's offshore oilfield technical services, among which cementing, mud and other services have absolute market advantages in China's offshore areas.
3. The company relies on its major customer CNOOC to provide strong support for its domestic business, and its oilfield technical services benefit from technological breakthroughs and import substitution, and are expected to maintain good growth.
Introduction and main business of CNOOC
CNOOC's business involves all stages of oil and gas exploration, development and production, and is mainly divided into four major sectors: drilling services, oilfield technical services, ship services and geophysical exploration services. The company occupies most of the market share of China's offshore oilfield technical services, among which cementing, mud and other services have absolute market advantages in China's offshore waters, and the company has the largest and most extensive large-scale equipment group in the market, which has strong competitiveness and can serve the entire oilfield service market in China's waters. Pay attention to Jufeng Investment Advisor (jfinfo)/good stock application, and the analysis and research report of the leading target of "Institutional Research and Selection" is waiting for you to get!
The concept of CNOOC stocks
Mining Industry, Reform of Central Enterprises, Tianjin Sector, AH Shares, HS300_, Institutional Heavy Positions, Oil Prices, Margin Trading, Offshore Equipment, Oil and Gas Services, Marine Economy, State-owned Enterprise Reform, Shanghai-Hong Kong Stock Connect, Belt and Road, Securities Holdings, Combustible Ice, Natural Gas, FTSE Russell, Standard & Poor's.
What is the status of CNOOC in the industry?
In terms of operating income, CNOOC is lower than the industry average, ranking 15th in the industry.
What is the basic situation of CNOOC's stock issuance?
CNOOC has a total share capital of 4.772 billion shares, of which 2.96 billion A shares are outstanding. As of April 18, the total market value was 90.422 billion yuan, the circulating market value was 56.101 billion yuan, and the price-earnings ratio was 30.01. The number of shareholders is 47,400. The largest shareholder is China National Offshore Oil Corporation (CNOOC), with the top ten shareholders accounting for 95.32% of the shares.
What about the financial data of CNOOC stock?
According to the 2023 annual report, CNOOC's total revenue was 14.601 billion yuan, and the net profit attributable to the parent company was 740 million yuan, with a year-on-year increase of 27.93% in total revenue and a year-on-year increase of 155.64% in attributable net profit.
As of December 31, 2023, by industry, the operating income of oilfield technical services was 25.757 billion yuan, with a revenue ratio of 58.39%, and the operating income of drilling services was 12.068 billion yuan, with a revenue ratio of 27.36%.
Executive Profile:
Zhao Shunqiang, male, Chinese nationality, born in 1968, is the chairman, executive director and chief executive officer of CNOOC, and a senior engineer. He graduated from China University of Petroleum (East China) in 1990 with a degree in drilling engineering and received an EMBA degree from China Europe International Business School in 2008. From July 1990 to November 2001, Mr. Zhao successively served as the drilling foreman, a staff member of the operation department and a senior team leader of CNOOC North Drilling Company, a vice president of CNOOC International Petroleum Engineering Co., Ltd. and the manager of the Bohai No. 9 platform of CNOOC North Drilling Company from November 2001 to October 2002, and a service provider of CNOOC Oilfield Services from October 2002 to August 2004 He served as the deputy general manager of Tianjin Branch of China Oilfield Services Co., Ltd., the director of the Drilling and Production Technology Institute (Tanggu) of the IPM Division of China Oilfield Services Co., Ltd. from August 2004 to November 2004, the general manager of Tianjin Branch of China Oilfield Services Co., Ltd. from November 2004 to December 2005, the general manager of the oilfield production division of China Oilfield Services Co., Ltd. from December 2005 to April 2012 (including the president of the Oilfield Production Research Institute from January 2011 to April 2012), and the deputy general manager of CNOOC International Co., Ltd. from April 2012 to March 2018From March 2018 to August 2020, he served as the president of CNOOC Uganda Co., Ltd., and from August 2020 to April 2021, he served as the president of CNOOC. In October 2020, he was appointed as an Executive Director of CNOOC. In April 2021, he was appointed as Chairman and Chief Executive Officer of CNOOC. Mr. Zhao has worked in the oil and gas industry for more than 30 years.
The company is backed by its major shareholder, CNOOC, and is one of the world's largest oilfield service providers, with steady growth
As of the end of 2023, CNOOC Group holds 50.53% of the shares, and the company has a complete service chain and a strong offshore oil service equipment group, covering the whole process of oil and gas field exploration, development and production, and is one of the world's integrated suppliers of oilfield services. Since 2018, the company's main business income has been on an upward trend due to CNOOC's efforts to increase reserves and production. In 2023, the company's main business income will be 44.109 billion yuan, a year-on-year increase of 23.70%, and the net profit attributable to the parent company will be 3.013 billion yuan, a significant increase of 28.05% year-on-year. Oil prices remain high, and upstream capital expenditure is expected to grow, driving the profit growth of the oil service industry. According to the 2023 investment plans of oil companies according to S&P Global, the capital expenditure of the seven major international oil companies was $119.1 billion, a year-on-year increase of 9%. Since the improvement of global oil and gas upstream capital expenditure in 2020, the profit of the oil service industry has maintained a growth trend. Upstream capital expenditure is expected to grow, which will drive the profitability of the oil service industry to improve.
Oilfield technical services: the company's main source of income, independent research and development technology innovation has been rapidly improved. As the company's main business with the highest proportion of revenue (accounting for 58.39% in 2023), the oilfield technical service business achieved operating income of RMB 25.757 billion in 2023, an increase of RMB 8.54 billion, or 23.69%, over the same period in 2022. In recent years, the company has actively practiced optimization technology, vigorously invested in technology research and development, further improved independent research and development technology, and won the "Oscar" of the oil industry for innovative technology. With the deepening of the implementation of the technology-driven strategy, the international market scale of oilfield technical services will steadily expand in the future.
Drilling services: asset-heavy advantageous projects, performance is expected to further improve. CNOOC is the largest offshore drilling contractor in China and has the world's third-largest offshore drilling fleet. Affected by the rising global demand for offshore platforms, the number of drilling rig operating days increased by 6% year-on-year in 2023. Since 2018, the focus of the business has been based on China, mainly serving CNOOC, which has certain advantages over overseas leading drilling enterprises, and the drilling business is an asset-heavy business, with high financial and technical barriers.
The company relies on its major customer CNOOC to provide strong support for its domestic business, and actively explores and seeks international development. Oil prices are rising year by year, and CNOOC is expected to continue to increase capital expenditure. "Large customers" have increased upstream expenditures, and the workload of offshore oil services is expected to increase further. The company actively explores the international development strategy, and the business distribution scope has gradually expanded overseas.
Risk Warning:
Fluctuations in crude oil and natural gas prices, fierce market competition due to geopolitical conflicts, oil and gas upstream capital expenditure is not as expected, and overseas business expansion risks.
Source:
Huaxin Securities-CNOOC-601808. SH-Company Dynamic Research Report: The Prosperity of the Oil Service Industry Improves and Continues to Build a World-class Energy Service Company - 20240417
Tianfeng Securities - Petroleum and Petrochemical Industry Special Research: Both ends of supply and demand are exerting force, and the cycle recovery is at the right time - 20240413
Dongxing Securities-CNOOC-601808. SH - the head of the sea oil suit standing on the shoulders of giants - 20240403
(Investment advisory support: Yu Xiaoming, practicing certificate: A0680622030012)
Disclaimer: The above content is for reference only and does not constitute specific operation advice, and you shall operate at your own risk and profit and loss