Jiang Diamond Co., Ltd.: the world's leading manufacturer of petroleum drill bits

Investment points:
1. The leader in the domestic oil industry, the company is one of the world's leading manufacturers of oil drills, the largest drill manufacturing R&D base in Asia, with a domestic share of over 60% and an international share of 10%. The main business is oil teeth. Wheel drill bits and diamond drill bits, other business areas include petroleum equipment, CNG natural gas, fine chemicals, etc.
2. The volatility of crude oil prices will help the oil drilling equipment industry to maintain a high degree of prosperity. The drill products are mainly used for the exploration of crude oil and natural gas. Since 2010, with the recovery of the global economy, the demand for oil has increased rapidly, and the output of crude oil has increased. And the price also shows a steady upward trend. The rise in oil prices will promote the exploration of crude oil, and the prospects for oil drilling equipment such as oil drill bits are still promising.
3. The company's products have high performance. The company has a high service level and marketing network in the bit market. The service scope covers all major oil fields in China and more than 30 countries and regions.
The company's leading products have stable gross profit margins and have remained at around 40% for many years. Due to the company's high market share, the bargaining power is strong.
4. Asset injection is worth looking forward to. The company's major shareholder Jianghan Petroleum Administration has promised that it will inject the high-quality assets of Jianghan Bureau's related petroleum machinery into the listed company through additional issuance, etc., and build Jiangyan shares into Sinopec's oil drilling and production machinery manufacturing base. .
In June 2008, the company's asset injection plan was rejected by shareholders, but the Authority promised to continue to modify the plan to honor the share reform commitment. We believe that the relevant asset injection is only a matter of time.
5. The investment rating is “Recommended”. It is estimated that the company's 2011-2013 earnings per share are 0.33, 0.36 and 0.41 yuan respectively, and the valuation is relatively high, but considering the industry's prosperity and the company has high technical barriers, With the injection of high-quality assets of major shareholders, the company will give the company a “recommended” investment rating.