Petrochemical Machinery (000852) Annual Report 2018 Comments: State-owned Enterprise Mixed Ownership Reform Leader’s 2019 Performance Exceeds Expectations

Petrochemical Machinery (000852) Annual Report 2018 Comments: State-owned Enterprise Mixed Ownership Reform Leader’s 2019 Performance Exceeds Expectations
Maintain Overweight rating and raise earnings forecast.Taking into account the delay in delivery of some orders in 2018, the inventory will be carried forward to the revenue in 2019 and the industry’s prosperity is higher than expected. We raised the EPS for 2019/2020/2021 to 0.36/0.50/0.72 yuan (previous value 2019/2020 EPS was 0.35/0.46 yuan), using industry average PE23.74 times, raise target price to 11.87 yuan, increase.  The company’s fourth quarter 2018 performance was slightly lower than expected.In 2018, the company achieved a net profit of RMB 13.54 million, an increase of 43 year-on-year.8%.The gross 杭州桑拿网 profit margin of the drill bit, drilling tools and oil and gas steel pipe business increased by 8 respectively.3%, 0.4% to 30.9%, 12.4%.Due to the increase in raw materials and outsourcing processing fees for petroleum machinery and equipment, the gross profit margin decreased2.7% to 23.9%.Due to the delivery, acceptance and settlement of some orders over the year, the increase in the inventory of steel pipes by 9 resulted in an increase in inventories over the same period of the previous year.400000000.It is expected that the subsequent carry-over of steel pipe income will cause 2019 performance to exceed market expectations.  The company is the leader of state-owned enterprise reform in the oil and gas field.As a pilot unit of the “Double Hundred Actions” comprehensive reform, the company has studied and formulated the “Double Hundred Actions” comprehensive reform implementation plan, and reported it to the SASAC Reform Office for the record.The company will date strategic investors to improve and optimize the equity structure ratio.  Benefit from the increase in upstream investment in three barrels of oil and the flexible release of natural gas pipeline network construction.The state has increased its efforts in oil and gas exploration and development, and PetroChina’s 2019 upstream investment budget of 2282 exceeded its 2014 investment high.At the same time, Sinopec’s 2019 upstream investment budget will increase by 41% annually to 59.6 billion US dollars.In addition, the national pipeline network company will release the natural gas pipeline network construction flexibility.Shashi Steel Pipe Plant, a subsidiary of the Company, has a clear competitive advantage in steel pipes for gas pipelines.  Risk warning: 北京桑拿洗浴保健 the risk of falling oil prices and the downturn in polyester demand.