CNOOC Engineering (600583): Global CNOOC production significantly accelerates company performance is expected to usher in an inflection point
Global offshore crude oil production is dominated by shallow crude oil, and global CNOOC production will accelerate significantly in 2019.
At present, the global commercial recoverable reserves of offshore crude oil are 160.2 billion barrels, of which the commercial recoverable reserves of shallow sea crude oil are 109.6 billion barrels, and the commercial recoverable reserves of deep sea crude oil are 50.6 billion barrels, accounting for 17 of the global commercial crude oil reserves.
8% and 8.
24%, the current offshore crude oil production is dominated by shallow water.
In 2019, global marine crude oil production has accelerated significantly, with shallow sea crude oil production increasing by 4%.
46%, an average increase of 3 per year.
8pct; due to the increase in the base of deep-sea crude oil production, the growth rate is even more obvious, and the growth rate of deep-sea crude oil production is 10.
48%, an average annual increase of 11.
Different from the market view, we believe that this round of offshore oil service recovery is driven by more industries and is less affected by oil prices.
The main driving factors are the following three points: ① In 2018, the old ships were quickly dismantled, and a centralized clearance was found on the supply side.
In 2017-2018, the offshore oil service industry was in a downturn. The rigs were continuously piled up and temporarily withdrawn from the market. At the same time, the partially stacked old ships were continuously dismantled and withdrawn from the market. In 2018, a total of 40 various types of drilling vessels were dismantled worldwide, accounting for approximately4. The total number of rigs in stock.
33%, the dismantling volume obviously exceeded the previous year’s average value, and the supply side appeared a centralized clearance.
② The cost of CNOOC mining continues to decline and the cost of CNOOC mining rises.
According to data released by Wood Mackenzie, the cost of deep-sea crude oil extraction has continued to decline since 2014, falling from an average of $ 80 at the beginning to less than $ 40 at the present.
After 2018Q3, the oil price decreased significantly, and the land drilling rigs fell down synchronously, but the offshore rigs continued to increase, and the global offshore oil service market boom continued to improve.
③In the context of energy security, domestic oil companies continue to increase capital expenditures.
China’s crude oil imports rank first in the world, and its dependence on foreign countries far exceeds the international security alert.
In the current complicated international political and economic environment, this must increase domestic crude oil production, minimize dependence on foreign imported oil, and maintain national energy security has become a necessary choice.
CNOOC accelerated the expansion of capital expenditure; in the first half of 2019, capital expenditure was 33.7 billion yuan, an annual increase of 60.
At the same time, the “Seven-year Action Plan” was formulated, and it was proposed that the exploration workload and proven reserves should be doubled by 2025, which shows that CNOOC’s future expansion of capital expansion is strong.
The company is deeply cultivating offshore oil and gas projects, and its performance is expected to usher in an inflection point.
① Benefiting from the gradual recovery of the offshore oil engineering industry, the company’s orders in hand reached a record high.
In the first half of 2019, the company’s new ten-year single 112.
38 ppm, an increase of 12 in ten years.
79%; orders in hand reached 252 trillion, an annual increase of 43.
18%, a record high.
② The company’s revenue keeps growing, and its net profit is expected to usher in an inflection point.
In the first half of 2019, the company achieved operating income of 45.
590,000 yuan, an increase of 27 in ten years.
51%; net profit attributable to mother is -7.
1.4 billion, previously under -291.
48%; mostly due to severe damage to Saudi Arabia’s 3648 marine transportation installation project
66 trillion, accrued contract impairment losses3.
9.4 billion; excluding the impact of the Saudi project, the company’s net profit attributable to its mother in the first half of the year realized a reduction in losses.
With the continuous growth of individual items in the new millennium, the company’s performance is expected to usher in an inflection point.
③ Benefiting from the continued recovery of the domestic market, the company’s domestic business income and profitability increased rapidly.
In 2018, the company’s domestic business income was 80.
55 ppm, an increase of 68 in ten years.
37%; gross margin is 11.
46%, an annual increase of 8.
In the first half of 2019, the company’s domestic market was only 17 in the new decade.
80 ppm, a 4 billion northern LNG project in July, did not replace the first half of the statistics.
With the further expansion of CNOOC’s capital expenditures, the company’s internal orders are expected to achieve rapid growth.
④ The company actively explored foreign markets and won multiple large orders.
In the first half of 2019, two international orders were obtained one after another to achieve a new breakthrough order of 94 in the foreign market.
580,000 yuan, a substantial increase of 798 before.
With the single implementation of new foreign starting points, foreign business will grow rapidly.
Maintain “Buy” rating.
First of all, we judge that the inflection point of the oil price in August has long pushed up the prosperity of the oil service sector. Secondly, other oil service companies of the offshore oil service itself are mainly: ① The average complete cost of CNOOC is about $ 30 / barrel, lower thanGround crude oil is USD 40 / barrel. CNOOC projects are more profitable than land-based crude oil projects. ② The distribution of land in the main exploration and development projects in the early stage has caused relative shifts in CNOOC and the utility rate brought by marginal introduction. ③ Geological activities are more favorableCNOOC reservoir preservation.
The company’s main offshore oil and gas field installation services generally lag behind CNOOC’s capital expenditures by about one year. In the first half of the year, CNOOC’s capital expenditures were US $ 33.7 billion, a continuous growth rate of over 60%. At the same time, CNOOC ‘s “seven yearsThe “Action Plan” is proposed to double the exploration workload and proved reserves by 2025, which will drive the company’s profitable continuous service in the future; its company will also benefit from the current round of investment peaks at home and abroad.
It 天津夜网 is expected that the company’s net profit attributable to the parent in 2019-2021 will be 1.
00 ppm, 9.
1 billion, 16.
96 ppm; corresponding EPS is 0.
02 yuan / share, 0.
21 yuan / share, 0.
38 yuan / share; at the latest closing price of 5.
Calculated at 41 yuan, the corresponding PE is 239 times, 26 times, and 14 times respectively; maintaining the “buy” level.
Risk reminder: The trend of oil price changes is less than expected; domestic oil and gas exploration and development is less than expected; risks brought by international market operations; engineering project implementation risks; natural disasters, severe weather and other natural factors; risks of exchange rate changes.