NINE Latest Report

Financial Performance

Nine Energy Service's total operating revenue was RMB141,426,000 as of December 31, 2024, a year-on-year decrease of approximately 1.1% from RMB144,073,000 as of December 31, 2023. This downward trend reflects the company's challenges in revenue generation, possibly due to factors such as market competition, cost pressures, and fluctuating customer demand.

Key Financial Data

1. Nine Energy Service's sales costs were RMB115,224,000 in 2024, down from RMB118,514,000 in 2023, but the decrease was not enough to offset the decline in revenue.

2. In the second quarter of 2024, the company's cementing operations decreased by approximately 2%, and the revenue from coil tubing decreased by 15%, indicating a slowdown in market demand.

3. The natural gas prices were low in 2024, averaging US$2.19 per thousand cubic feet, a 14% decrease from 2023, affecting customer spending and project investments.

4. Nine Energy Service's business activities were directly affected by the macroeconomic environment and policy changes in the oil and gas industry, particularly in the Haynesville Basin, where drilling activity decreased by 30%.

5. The company's net cash flow from investing activities was negative, indicating a cautious approach to expansion and investment.

Industry Comparison

1. Industry-wide analysis: In 2024, the energy services industry faced the dual pressures of market demand fluctuations and cost increases, leading to varying degrees of revenue declines for many companies, including Nine Energy Service.

2. Peer evaluation analysis: Nine Energy Service's revenue decline was relatively small, but its market share needs to be monitored. If similar revenue declines occur among industry peers, it may indicate industry-wide challenges.

Conclusion

Nine Energy Service's main issue in 2024 was the intensified market competition and fluctuating customer demand, leading to a revenue decline. Although sales costs decreased, they were not enough to offset the revenue reduction, reflecting the need for adjustments in its operations and market strategies to adapt to external changes.

Opportunities

1. With the recovery of the oil and gas market, a rise in oil and gas prices may lead to increased customer spending and revenue recovery.

2. Success in niche markets such as refracturing operations can be further developed and deepened, enhancing revenue sources.

3. Optimizing operational efficiency and improving service quality can attract more customers, improve customer relationships, and increase market share.

4. Implementing flexible financial strategies (such as ATM programs) allows the company to maintain liquidity in uncertain economic conditions, supporting further investment and expansion.

Risks

1. Continued low oil and gas prices may lead to further reductions in customer spending, affecting the company's revenue and profits.

2. Intensifying competition within the industry requires Nine Energy Service to continuously improve service quality and technological innovation, increasing operational pressure.

3. Macroeconomic uncertainties and policy changes may negatively impact market demand, further compressing the company's profit margins.

4. Negative net cash flow from investing activities may limit the company's long-term development potential, affecting future growth opportunities.