Jereh Group(002353) 申万宏源·2024-06-14 13:01Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook on its performance and growth potential [4][8]. Core Views - The company has demonstrated stable operations and continuous growth through various oil price cycles since its establishment in 1999. Key drivers include business expansion across multiple sectors, innovation in high-end oil service equipment, market penetration in the Middle East, North America, and a strong corporate culture focused on customer-centricity and striving for excellence [4][5]. - The global oil service market presents significant growth opportunities, with the 2022 market size at $267 billion, and domestic companies have substantial potential for high-end equipment and technology services abroad [4][5]. - The company has successfully secured large contracts in the Middle East and North America, indicating a growing market share and recognition of its technological capabilities [4][5]. Summary by Sections Market Data - As of June 13, 2024, the company's closing price is 35.98 yuan, with a market capitalization of 24,950 million yuan and a price-to-earnings (PE) ratio of 13 for 2024 [2][3]. Financial Data - The company forecasts net profits of 27.93 billion yuan, 32.63 billion yuan, and 38.27 billion yuan for 2024, 2025, and 2026, respectively, with corresponding PE ratios of 13, 11, and 10 [4][8]. Business Expansion - The company has diversified its operations into oilfield equipment, technology services, and environmental engineering, enhancing its resilience against market fluctuations [4][5]. - The Middle East market is particularly promising due to rich oil and gas resources and increasing collaboration under the Belt and Road Initiative, with the company expected to capture a larger market share [4][5]. - In North America, there is a significant demand for equipment upgrades, with a market potential exceeding 70 billion yuan, driven by the transition to more efficient electric and turbine fracturing technologies [4][5]. Profitability and Valuation - The company maintains a competitive edge with a projected gross margin of around 35% for its equipment manufacturing and technology services, which is expected to drive overall profitability [4][8]. - The valuation remains attractive, with the company's PE ratios below industry averages, suggesting potential for price appreciation as market conditions improve [4][8].