CNPC Engineering (600339): Subsidiaries sign another 50.

7.8 Billion EPC Contracts Global Business Facilitates Improvement

CNPC Engineering (600339): Subsidiaries sign another 50.

7.8 Billion EPC Contracts Global Business Facilitates Improvement

Event: On the evening of October 25, the company issued an announcement saying that the company’s subsidiary China Huanqiu Engineering Co., Ltd. had newly signed an EPC general contract.

The contract deadline is June 30, 2021, and the total amount is about 50.

The RMB 7.8 billion subsidiary re-signed a major contract, and the improvement of Huanqiu Engineering’s business. The winning order was awarded by China Huanqiu Engineering Co., Ltd., a wholly-owned subsidiary of the company, and China Shilanzhou Petrochemical Yulin Chemical Co., Ltd., a subsidiary of China National Petroleum Corporation.
The project will rely on the rich natural gas resources of Changqing Natural Gas and Huanqiu Engineering Company’s independent set of ethylene technology to produce chemical products such as ethylene, fuel gas, carbon three and heavy components through cracking.

The project construction content mainly includes an annual output of 60 ethylene copolymer units, 30 full-density polyethylene units, 30 high-density polyethylene units, and supporting public works, auxiliary production facilities and off-site projects.

The completion of the project will help the company to improve natural gas utilization efficiency and the competitiveness of ethylene products, consolidate and expand the domestic refining and chemical project market. Contracts have been released one after 合肥夜网 another, and the global performance has promoted recovery.Signed a contract amount of 251.

5.2 billion yuan, compared with 250 in the same period last year.

US $ 9 billion was basically flat; since the second half of the year, the contract amount has been extended by a total of 189.

4.3 billion yuan.

It is expected that after the project construction peak period and the concentration period of receivables are entered in the second half of 2019, with the successive extension and release of orders, Huanqiu Engineering is expected to change the replacement situation in the first half of the year and achieve a recovery in performance, which will bring good results to the company.

  Policy dividends continue to be released, and the natural gas market benefits significantly from the imminent establishment of a national pipeline 北京夜网 network company. The investment space for pipeline storage and transportation is huge, and the pipeline capacity is expected to significantly increase. The company will benefit significantly in the future.

In addition, the conversion of 53 projects operated by CNPC in 20 countries along the “Belt and Road” is further promoted, and the company’s workload is expected to further increase.

In the future, the company will gradually focus more on upstream exploration and development, extending the seven-year action plan; the transformation will realize the efficient use of pipeline resources across the country through the platform of the national pipeline network.

  Earnings forecast and investment advice: We maintain our earnings forecast for the company, and expect net profit for 2019-2021 to be 6.

53, 7.

34, 8.

4.4 billion yuan, corresponding to 0 EPS.

12, 0.

13, 0.

15 yuan to maintain the “overweight” level.

  Risk reminder: The risk of fluctuations in international oil prices, overseas operating risks, market competition risks, exchange rate risks, capital account progress is less than expected, and the establishment of the state-owned pipeline network company is less than expected.