CNOOC (601808) in-depth research report: Accelerating cash performance of structural potential

CNOOC (601808) in-depth research report: Accelerating cash performance of structural potential

Born from CNOOC, a natural integration oil service company.

The company was formed in 2001 by the merger of five subsidiaries in the China Sea combined drilling, 深圳SPA会所 oil well services and geophysical prospecting. It was born as an integrated oil service company.

In terms of business structure, as of 2019H1, 49% of the company’s revenue comes from technical services and 51% from the equipment sector. In terms of market regional structure, the domestic market revenue accounted for more than 70%; in terms of market share, the company occupied internal offshore transformation100% copyright in business.

The cyclical boom is still underway, and structural opportunities stand out.

In 2016, oil prices and capital expansion of oil and gas producers bottomed out, and the oil service industry ushered in an upward cycle.

According to Rystad Energy’s forecast, the capital expenditure of global oil and gas companies will continue to increase in the next three years, and the boom will remain high. Structurally, CNOOC’s development will be more dominant. It is expected that during 2018-2022, the capital expenditures of deep-sea oil and offshore oil development will be compoundThe growth rate is 7 in turn.

7% and 4.

3%.

In 2018, the General Secretary revisited energy security. The “Seven-year Action Plan” was subsequently introduced, with “reasonable external dependence on oil and gas” and “200 million tons of crude oil production” as phase targets. Domestic oil and gas production companies significantly increased capital expenditures.The recovery of oil service companies is stronger than overseas.

Weakened equipment and enhanced services, and the asset-light model has become a domestic leader in oil services.

Under the strategic guidance of “heavy technology and light assets”, the company’s revenue from the technical service segment continued to increase, reaching 49% in 2019H1.

According to the company’s plan, the long-term revenue ratio of technical service income reached 70%.

In terms of equipment, the overall surplus of the platform will be gradually phased out. The company ‘s gradual increase in gross profit margin and revenue growth need to gradually integrate the further improvement of platform productivity. The calculation results show that in 2020, the annual business growth rate can reach up to 20% and the gross profit margin can reach 24%.
In terms of technical services, the company’s business is based on equipment, technology as a barrier, and the group as an advantage. It is in a rapid growth trend.

In terms of technical advantages, the company has strong competitiveness in coping with various water depths, temperatures and pressures of CNOOC’s exploration and development, which makes it possible to make full use of the structural domestic + CNOOC potential.

According to the calculation of related party transactions, the company’s revenue in 2021 is expected to reach 45.6 billion.

2017-2018 data show that 85% of the company’s revenue comes from the parent company CNOOC Group, and the correlation coefficient between connected transactions and total revenue is as high as 0.

96.

According to the guidelines of the 2020-2022 Announcement of Daily Connected Transactions, the upper limits of the company’s and the Group’s connected transactions in 2019-2022 are USD 290.4 billion and USD 52.1 billion, respectively.

If we assume that the execution rate of 2019-2022 is 90%, 80%, 70%, and 60%, the calculation results show that the company’s total revenue in 2021 can reach 45.6 billion.

Investment suggestion: We expect the company to achieve a net profit attributable to mothers of 37-20 in 2019-2021.

60,000 yuan, 38.

900 million and 49.

9 trillion, the corresponding EPS is 0 in order.

79, 0.

81 and 1.

05 yuan / share.

From 2009 to 2015, there was a round of bulls and bears in the broader market, and the oil service industry also experienced a relatively complete round of bulls and bears. If the continuous average of 19 times was used as the reference value for the center, the 2020 performance could correspond to 15.

0 yuan / share conservative, 2021 performance can correspond to 20.

The average value of 0 yuan / share, the first coverage is given a “recommended” rating, and the target price is 20 yuan / share.

Risk Warning: The implementation of the seven-year action plan is less than expected.