Jiang Diamond shares: focus on group professional restructuring

Abstract recently released Kingdream (000852) research report said the company cone bit basic products in the domestic market monopoly, and diamond drill product market competition, the number of gas wells before drilling reaches a certain size, the next 2 to 3 years Company Main oil drill bit...
The research report of Jiang Drilling Co., Ltd. (000852) released recently said that the company's roller bit products are basically monopolized in the domestic market, and the diamond bit products market is highly competitive. Before the number of gas well drilling reaches a certain scale, it is expected that the company will be the main company in the next 2~3 years. There is limited room for further growth in the sales of oil drill bits for the camp. In addition, the gross profit margin of the drill product is much higher than other main products of the company, and the decline in the revenue of the drill business will lead to the decline of the company's comprehensive gross profit margin.

It is expected that the company's main products, the roller cone bit, will have limited sales and sales revenue growth in the next two to three years. The annual capacity/yield of the company's roller bit is the world's number one. The roller bit has high requirements on product design, processing equipment and process. The company has obvious competitive advantages in this field. The company's statistical caliber has a market share of more than 80 in the domestic roller bit market. % (including the basic monopoly of deep wells over 3,000 meters). Mainly due to (1) domestic diamond drill bits are gradually replacing some of the demand for roller cone bits (each has its own strength and will not be completely replaced), and (2) the number of gas wells expected to grow faster in the future is still low in domestic proportions (3) The domestic market share of the company's roller cone bits is already high. (4) The company's roller cone bit products are sold overseas through the independent trademarks of Jiangdeng, and the overseas market is highly competitive (currently the overseas market share of the company's roller cone bits) For the four factors, such as 10% to 15%, the company's roller cone bit sales and sales revenue growth rate is very low in the past two years. In addition, raw material costs and labor costs have risen sharply, resulting in a decline in gross profit margins of drill products in recent years.

The competition in the ordinary diamond drill market is fierce. At present, the company's market share is low, and it is still difficult to rapidly expand the market; the company actively introduces advanced manufacturing technology from the United States to consolidate the positioning of high-end diamond drill products.

Among domestic demand for oil drill bits, the increase in the proportion of diamond drill bits is a general trend; although the price of a single diamond drill bit is higher than that of a roller bit, it can significantly reduce the overall cost of drilling because it can shorten the drilling time and the idle time of the rig. . However, the barriers to entry in this industry are relatively low. Almost every oilfield has a matching private diamond drill bit factory. The market competition is fierce, and the gross profit margin of ordinary diamond drill bits is relatively low.

At present, Jiang Diamond's diamond drills account for a lower proportion of their total revenue and their share in the domestic diamond drill market. Analysts believe that Jiang Diamond has accumulated a leading edge in terms of technology, process, brand reputation and customer channels in the field of drill bits, but there may still be some gaps with private enterprises in terms of marketing methods and price attractiveness, and rapidly expand domestic diamonds. The drill market is still difficult.

The company's diamond drill products are positioned at the high end. In the 1980s and 1990s, the company introduced the diamond bit manufacturing technology exclusively from Baker Hughes. In recent years, the company also cooperated with Hijet Corporation of the United States and acquired 40% of the US PDCL company. The way continues to introduce advanced PDC bit manufacturing technology in the United States. In addition, the diamond composite chips used by most domestic diamond drill manufacturers are still relying on imports, and Jiang Diamond is striving to localize them. According to public information, the high-end products of domestic PDC bits are mainly occupied by Chuanshi, Chuanke, Best, Xinjiang DBS, etc., but the demand is small but the price is very high.

Relying on the Group's customer channels, the company is expected to continue to receive large orders for CNG compressor products during the period of high gas pipeline construction in China. The company's CNG compressor products are used in natural gas pipeline pressurization. In 2011, a branch company was set up to engage in the compressor business. In recent years, the sales growth rate is relatively high. In the first quarter of this year, Jiangdui Compressor Branch obtained a large order of 11 sets of 6RDSA-1 compressors from the Sino-Petrochemical North China branch of the Daniudi gas field tower-榆 pipeline natural gas compressor project. The single contract amount exceeded 100 million yuan. This is also the first quarter. The main reason for the significant increase in the company's advance receipts.

Last year, the company's CNG natural gas sales revenue increased by 47%, actively expanding the automotive gas market and industrial customers around Wuhan, and will continue to boost the company's natural gas sales business growth. After taking gas from the upstream, the company processes and sells natural gas for dehydration and compression of natural gas. The company strives to maintain the main market for Wuhan's automotive natural gas and actively explores surrounding markets and industrial customers.

Due to the sluggish PV industry, the company basically stopped production. Last year, Jiangtong Tianxiang lost 11.14 million yuan in operating profit. It is expected that the operating loss will be further expanded this year. The bleaching powder contributed more than 95% of the company's chemical business last year. The company is optimistic about bleaching powder. Refined product market prospects. The photovoltaic industry is in a downturn, the company's main production of trichlorosilane subsidiary Jiang Dian Tianxiang is basically in a state of suspension, during the bottom of the industry, the company said it is unlikely to sell this part of the assets.

In addition to roller cone drill bits, diamond drill bits, natural gas compressors and manifold valves, the company plans to improve the oil and gas equipment and service industries, including downhole power drills and marine underwater oil and gas equipment. (1) At present, the company's screw drilling tools and other underground power drilling tools production lines have been completed, and the products have been tested in several oil fields in China; analysts believe that the Sinopec Group will support the company's independent research and development and production of downhole power drilling tools, and the products and companies Drill products can form a benign supporting sales, and customer channels and brand influence will be stronger. (II) The company's marine deep-water underwater oil and gas equipment products have achieved phased results (National 863 Program).

Sinopec Group's petroleum engineering specialization integration and restructuring may have a positive impact on Jiang Diamond shares, and it is recommended to pay attention. On May 13th, Jiang Diamond Co., Ltd. announced that it has received relevant documents such as the “Guiding Opinions on the Implementation of Specialization and Reorganization of Petroleum Engineering Specialization of China Petrochemical Corporation” and the 67.5% equity of the Company held by Jianghan Petroleum Administration Bureau. Transferred to Sinopec Petroleum Engineering Machinery Co., Ltd., the company's controlling shareholder will be changed from Jianghan Bureau to a mechanical company.

It is estimated that the company's earnings per share for 2013~2015 are 0.34, 0.38, and 0.43 yuan respectively. Based on the closing price of 16.4 yuan on June 3, the corresponding P/E ratios are 48.5, 43.3, and 38.3 times, respectively. Behind the market's high valuation, the company is expecting a sustained high boom in the natural gas drilling industry and anticipation of the positive impact of Sinopec's petroleum engineering specialization on the company's performance growth and safety margins, but taking into account the company's performance growth and safety margins, Analysts temporarily give the company a "neutral" investment rating.

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