Investment Rating - The report maintains an "Overweight" rating for the environmental protection industry [1]. Core Views - Indonesia has launched a $5.6 billion waste-to-energy project, indicating a vast market opportunity for solid waste management companies to expand internationally [11][12]. - The solid waste sector is experiencing strong fundamentals, with a notable increase in free cash flow and improved return on equity (ROE) due to operational efficiencies and reduced capital expenditures [14][15]. - The water services sector is poised for growth, with expectations of increased cash flow and dividend payouts as capital expenditures decline [18][19]. Summary by Sections Industry News - Indonesia's sovereign fund has initiated the first waste-to-energy project tender, with plans for 33 plants and a total investment of approximately 56 billion USD [11]. - The solid waste industry is transitioning to a mature phase, focusing on efficiency improvements and cash flow generation [14]. - The environmental sanitation vehicle market saw a 63.18% increase in new energy vehicle sales, with a penetration rate of 17.40% [20]. Key Recommendations - Recommended stocks include: - **Waiming Environmental**: Selected as a supplier for Indonesia's waste-to-energy projects, with significant operational capacity [13]. - **Green Power**: Strong performance driven by increased heating capacity and cost savings [14]. - **Yongxing Co.**: Notable growth in revenue and profit due to improved operational efficiency [14]. - Companies to watch include **Dayu Water Saving**, **Lian Tai Environmental**, and **Wang Neng Environment** [1]. Financial Performance - The solid waste sector reported a 12% increase in net profit and a 2.7 percentage point rise in gross margin for the first three quarters of 2025 [14]. - Free cash flow for the sector reached 13.3 billion CNY, marking a 28% increase year-on-year [14]. - Dividend payouts are expected to rise, with several companies maintaining high payout ratios [15][18]. Market Trends - The water services sector is expected to see a cash flow turnaround, similar to the solid waste sector, with anticipated increases in dividend payouts as capital expenditures decrease [18][19]. - Price reforms in water services are expected to enhance growth and valuation, with cities like Guangzhou and Shenzhen implementing price increases [18]. Equipment and Technology - The report highlights the growth in the environmental sanitation vehicle market, particularly in new energy vehicles, which are becoming increasingly prevalent [20]. - The report also notes improvements in the profitability of lithium battery recycling, with a slight decrease in metal prices leading to better margins [34][35].

Investment Rating - The report provides a positive investment outlook for various sectors within the energy industry, particularly highlighting opportunities in hydropower, green energy, nuclear power, thermal power, and gas sectors [10][30]. Core Insights - The electricity market in the State Grid operating area has achieved near-complete coverage of the electricity spot market, with significant developments in provinces such as Shanxi, which has seen a 128.75% increase in new energy and clean energy installed capacity since the 14th Five-Year Plan [4][9]. - Natural gas prices have shown a divergent trend globally, with increases in Europe and the US, while prices in Asia remain stable due to ample supply [11][30]. Summary by Sections 1. Electricity - The State Grid has implemented a continuous settlement trial for the electricity spot market in Sichuan and Chongqing, marking a significant step towards full coverage [4][7]. - Shanxi's electricity spot market has recorded a total clearing volume of 156.23 billion kWh in the first half of 2025, with real-time average prices reflecting a "two peaks and one valley" pattern [9][10]. 2. Natural Gas - As of November 7, 2025, the Henry Hub spot price in the US reached $3.76/mmBtu, reflecting a weekly increase of 5.52%, while European prices also saw upward trends [11][12]. - The report notes that the LNG national ex-factory price in China is 4382 yuan/ton, with a slight weekly decrease of 0.57% [28][30]. 3. Investment Recommendations - Hydropower: Favorable conditions for winter and spring generation, recommending companies like Guotou Power and Chuan Investment Energy [10]. - Green Energy: Increased stability in returns for existing projects, suggesting attention to companies like New Energy and Longyuan Power [10]. - Nuclear Power: Long-term growth potential remains strong, with recommendations for China Nuclear Power and China General Nuclear Power [10]. - Thermal Power: Improved profitability due to lower fuel costs, recommending companies like Guodian Power and Huaneng International [10]. - Gas Sector: Favorable conditions for city gas companies, recommending Kunlun Energy and New Energy [30]. 4. Company and Industry Dynamics - As of September 2025, China's new energy storage capacity exceeded 100 million kW, accounting for over 40% of the global total [39]. - The report highlights the steady growth in electricity market transactions, with a total of 4.92 trillion kWh traded by September 2025, marking a 7.2% year-on-year increase [39].

Investment Rating - The report maintains a "Positive" outlook on the power and gas sectors, highlighting the full coverage of the electricity spot market in the State Grid operating area and the seasonal rise in gas prices in Europe and the US [1]. Core Insights - The electricity spot market in the State Grid operating area has achieved near-complete coverage, with 18 provincial-level markets in continuous settlement trial operation as of November 1, 2025. This includes the formal operation of inter-provincial markets and five provincial-level markets [4][8]. - In the gas sector, US Henry Hub spot prices rose to $3.76/mmBtu, reflecting a weekly increase of 5.52%, while European gas prices also saw increases due to seasonal demand [13][19]. Summary by Sections 1. Electricity - The State Grid operating area has nearly achieved full coverage of the electricity spot market, with significant developments in various provinces. As of November 1, 2025, the market has transitioned to continuous settlement trials in Sichuan and Chongqing [4][8]. - In Shanxi, the first province to fully implement the electricity spot market, the average spot price for electricity was recorded at 0.283 yuan/kWh, with a total of 156.23 billion kWh cleared in the first half of 2025 [10]. - The growth of renewable energy capacity in Shanxi has been substantial, with an increase of 128.75% since the 14th Five-Year Plan, leading to a significant impact on electricity pricing and market dynamics [10]. 2. Gas - The report notes a divergence in global gas prices, with US prices rising while Asian LNG prices remain stable due to ample supply. As of November 7, 2025, the Northeast Asia LNG spot price was $11.10/mmBtu, unchanged from the previous week [13][27]. - The report highlights the increase in US natural gas production and demand, with the Henry Hub futures price reaching $4.32/mmBtu, marking a 4.63% increase [14][19]. - Recommendations for investment in gas-related companies include those with integrated natural gas trading capabilities, such as Kunlun Energy and New Hope Energy, as well as city gas companies benefiting from cost reductions [31]. 3. Weekly Market Review - The report indicates that the electricity equipment, public utilities, environmental protection, and gas sectors outperformed the Shanghai and Shenzhen 300 index during the week of November 2 to November 9, 2025 [35]. 4. Company and Industry Dynamics - As of September 2025, China's new energy storage capacity exceeded 100 million kW, representing over 40% of the global total, with significant contributions from various regions [41]. - The report also notes that the National Energy Administration is actively promoting the construction of a unified national electricity market, with trading volumes and participants steadily increasing [41].

Core Insights - The company presented its core business operations and significant developments at the 2026 Investment Summit, highlighting growth in retail gas volume, LNG supply chain synergy, LPG sales, and crude oil performance, while addressing investor concerns regarding gross margin trends, medium to long-term planning, non-gas business, and dividend policies [1] Business Performance - The company expects to achieve its annual guidance with retail gas growth projected to return to 5% for the year, driven by high single-digit growth from industrial users and efficient operation of LNG receiving stations with an expected annual load factor of 85%-90% [1] - LPG sales showed high single-digit growth in the first nine months, with a slight increase anticipated for the full year, while crude oil production is expected to stabilize at 8 million barrels [1] Gross Margin and Cost Trends - The gross margin for the first half of the year was 0.44 CNY per cubic meter, a slight year-on-year decrease, primarily due to gas station integration and promotional strategies for industrial users; however, a stable to slightly increasing trend is expected in the second half due to cost optimization in winter [2] - The company anticipates that gas demand will remain robust under the dual carbon goals, supported by industry pricing mechanisms, which will help maintain gross margins within a reasonable range [2] Medium to Long-term Strategy - The company has outlined a medium to long-term strategy focusing on "innovation, green, market, capital, and low cost," aiming to become a leading comprehensive energy supplier in China, with natural gas market share expected to align with upstream supply [2] - Non-gas business initiatives include a 380,000 kW onshore wind power project in Shandong set to be operational by Q3 2026, and the "Kunlun Huixiang+" value-added business showing good growth, albeit still at a small scale [2] Dividend Policy and Valuation - The interim dividend was set at 0.166 CNY per share, reflecting a year-on-year increase of 1.2%, with a payout ratio of 45.5%, up by 2.5 percentage points year-on-year; the current stock price corresponds to a projected dividend yield of 4.8% for 2025 [3] - The company maintains profit forecasts for 2025-2027 at 6.15 billion, 6.49 billion, and 6.84 billion CNY, respectively, with corresponding EPS of 0.71, 0.75, and 0.79 CNY, and a target price of 8.58 HKD based on an 11x 2025E PE ratio [3]

Investment Rating - The report maintains a "Buy" rating for Kunlun Energy [9] Core Views - The company is expected to achieve dual growth in profitability and dividends, leading to a revaluation of its long-term value [3] - The company has outlined its core business operational trends and significant progress, including retail gas volume growth, LNG industry chain synergy, LPG sales, and crude oil performance [3] Summary by Relevant Sections Business Performance - Retail gas volume growth for the first nine months is expected to return to 5%, driven by high single-digit growth from industrial users [4] - The LNG receiving station is projected to operate at an annual load factor of 85%-90% [4] - LPG sales showed high single-digit growth in the first nine months, with a slight increase expected for the full year [4] - Crude oil production is anticipated to stabilize at 8 million barrels for the year [4] Margin and Cost Trends - The gross margin for the first half was 0.44 RMB per cubic meter, a slight year-on-year decrease of 0.01 RMB, influenced by gas station integration and promotional strategies for industrial users [4] - A stable to slightly increasing gross margin is expected in the second half due to cost optimization in winter [4] - Long-term demand for gas is expected to remain robust, supported by the dual carbon goals and industry pricing mechanisms [4] Long-term Planning and Non-gas Business - The company has clarified its long-term focus on five strategies: innovation, green energy, market, capital, and low cost [5] - The company aims to become a leading comprehensive energy supplier in China, with a natural gas terminal market share expected to match upstream supply [5] - The Shandong 380,000 kW onshore wind power project is planned to be operational by Q3 2026 [5] Dividend Policy - The interim dividend is set at 0.166 RMB per share, reflecting a year-on-year increase of 1.2%, with a payout ratio of 45.5% [4] - The current stock price corresponds to a 2025 estimated dividend yield of 4.8% [4] - The dividend policy for 2023-2025 is expected to be steadily implemented, with a more positive outlook for 2026-2028 [4] Profit Forecast and Valuation - The report maintains the forecast for the company's net profit attributable to the parent company at 6.15 billion, 6.49 billion, and 6.84 billion RMB for 2025-2027, respectively [6] - The target price is set at 8.58 HKD, based on an 11x PE for 2025E and an exchange rate of 0.91 for HKD to RMB [6]

Summary of Kunlun Energy Conference Call Industry and Company Overview - **Company**: Kunlun Energy - **Industry**: Natural Gas and Energy Sector Key Points and Arguments Natural Gas Demand and Sales Performance - In the first three quarters of 2025, industrial natural gas demand showed a high single-digit growth, while commercial and residential demand remained flat [2][3] - The annual growth guidance for natural gas sales has been adjusted to 5%, with a low single-digit growth achieved from January to September [3] - The company aims to add 600,000 to 700,000 new users by the end of the year, nearing completion of this target [3] LNG and Oil Sales - The LNG receiving station's load factor is expected to be between 85% and 90% for the year, with processing volumes showing low single-digit growth [3] - LP sales are projected to be 5.8 million tons, consistent with last year's figures, with a mid-high single-digit growth achieved in the first three quarters [3] - Oil equity sales are on track to meet the initial guidance of 8 million barrels, with operations in four projects across three countries [3] Margin and Pricing Strategy - The average price difference for gas in the first half of the year was 4.4 yuan per cubic meter, slightly down from the previous year due to external factors [6] - The company anticipates margin improvement in the fourth quarter due to a decrease in Northeast Asia's JKM spot prices, which will optimize costs [6] - A cold winter may significantly boost sales, but the reduction in contract linkage ratios is expected to support margin improvement [6] Cost Management and Expenses - The company has fully accounted for labor costs in the first half of 2025, with higher sales and administrative expenses expected in the second half due to project settlements [7][10] - Safety governance expenses for 2024 are estimated at 600 million yuan, expected to remain stable compared to the previous year [7][10] Dividend Policy and Shareholder Returns - Kunlun Energy is implementing a dividend plan for 2023-2025 with a mid-term payout ratio of 45.46% [8] - A new dividend policy is expected to be introduced in Q1 2026, focusing on competitive returns for shareholders while ensuring stable company performance [9] Cash Reserves and Investment Strategy - The company has over 20 billion yuan in net cash reserves, earmarked for gas sector investments and facility construction [4][15] - In selecting acquisition targets, the company prioritizes projects with an internal rate of return (IRR) of 8% without leverage [16] Future Development and Strategic Direction - The company aims for long-term, stable performance to reward investors, focusing on five strategic areas: innovation, green energy, resource market management, and cost control [21] - Plans to enhance its integrated energy supply system and leverage AI technology for new growth points in the energy sector [21] Gas Source Stability - Approximately 80%-90% of the company's gas supply comes from pipeline gas from its parent company, ensuring stable supply [4][12] - The company maintains a competitive pricing strategy without discrimination, with industrial users contributing nearly 70% of retail volume [14] External Environment and Market Position - Despite uncertainties in the external environment, industrial users have shown relatively good growth, supported by flexible pricing and sales strategies [14] - The company is optimistic about improving margins further in the fourth quarter due to declining LNG spot prices and ongoing sales optimization [14] Oil Field Projects and Future Plans - The company currently has four oil field projects, with expiration dates ranging from 2037 to 2047, and plans to maintain stable development in this area [19] Gas Franchise Rights - Most of the company's gas franchise rights have not yet reached their expiration, and historical experience suggests that renewals are likely to proceed smoothly [20]

Core Points - Kunlun Energy Hubei Huanggang LNG Company expressed gratitude to Hubei Special Inspection Institute Huanggang Branch for their efficient and professional technical support during a critical maintenance period [1][3] - The company undertook a planned full plant shutdown for maintenance in August, with the inspection of 152 pressure vessels being a key aspect for ensuring safe production and timely resumption [3] - The inspection team from Hubei Special Inspection Institute worked diligently to complete the inspection tasks on time, ensuring a safe and timely restart of production for Kunlun Energy Huanggang Company [3] - To enhance safety management and risk prevention, the institute provided tailored training courses and technical guidance to address specific needs in special equipment management [3] Group 1 - Kunlun Energy Huanggang Company presented a banner to express appreciation for the support received during maintenance [1] - The maintenance involved a significant inspection of 152 pressure vessels, crucial for safe operations [3] - The inspection team managed to complete their tasks under tight deadlines and challenging conditions [3] Group 2 - The Hubei Special Inspection Institute organized specialized training to improve safety management and emergency response capabilities for Kunlun Energy Huanggang Company [3] - The training included topics such as safety regulations, management norms, and risk identification [3] - This initiative aimed to enhance the company's internal safety management and operational efficiency [3]

Group 1 - Hong Kong oil stocks continued to rise, with an increase of 2.9% for China Petroleum and 1% for China Petroleum Chemical [1] - OPEC+ announced plans to pause production increases in the first quarter of next year, marking the first halt since resuming supply cuts in April [1] - Morgan Stanley raised its short-term forecast for oil prices, increasing the Brent crude oil futures price expectation for the first half of 2026 from $57.50 to $60 per barrel [1] Group 2 - CNOOC's third-quarter performance indicates the company's ability to deliver stable and resilient earnings amid oil market fluctuations [2] - The dividend outlook and stability for CNOOC are considered the best among its peers [2] - The target price for CNOOC's H-shares was raised from HKD 8.6 to HKD 8.8, and the A-shares target price was increased from CNY 11.9 to CNY 12, maintaining an "outperform" rating [2]

Investment Rating - The report provides a positive investment outlook for the electricity and natural gas sectors, highlighting potential growth opportunities in renewable energy and natural gas consumption [4][8]. Core Insights - The green certificate market is experiencing a significant increase in both volume and price, with a 210% rise in average trading prices in Q3 compared to Q1. The total issuance of green power certificates reached 2.29 billion in September 2025, with 1.58 billion being tradable [7][8]. - Global natural gas prices are fluctuating, with the U.S. Henry Hub spot price reaching a six-month high of $3.57/mmBtu, while European prices are showing mixed trends [9][11]. - The report anticipates an increase in natural gas consumption in Q4 2025 due to low base effects and expected higher heating demand from a potential La Niña phenomenon [30][31]. Summary by Sections Electricity - The average trading price of green certificates increased by 210% in Q3 compared to Q1. The issuance of green certificates reached 2.29 billion in September 2025, with 1.58 billion being tradable, indicating a robust market growth [7][8]. - The report emphasizes the need for further development of the green certificate market and the introduction of regulations to enhance renewable energy consumption [4][7]. Natural Gas - As of October 31, 2025, the U.S. Henry Hub spot price was $3.57/mmBtu, marking an 11.16% increase week-on-week. In contrast, European gas prices showed a decline, with the TTF spot price at €30.35/MWh, down 5.42% [9][10]. - The report notes a decrease in China's apparent natural gas consumption in September 2025, but anticipates a rebound in Q4 2025 due to low base effects and increased heating demand [30][31]. - The LNG national ex-factory price in China rose to 4407 yuan/ton, reflecting a 3.11% increase week-on-week, driven by rising demand ahead of the heating season [28][30]. Investment Recommendations - The report recommends several companies based on their performance and market conditions: - Hydropower: Focus on Guotou Power, Chuan Investment Energy, and Yangtze Power due to favorable hydrological conditions [8]. - Green Power: Attention to New Energy, Funiu Co., Longyuan Power, and China Resources Power for their stable returns [8]. - Nuclear Power: Recommendations for China Nuclear Power and China General Nuclear Power due to ongoing approvals for new units [8]. - Thermal Power: Companies like Guodian Power and Huadian International are highlighted for improved profitability due to falling coal prices [8]. - Gas Power: Recommendations for Guangzhou Development and Shenzhen Energy based on expected stability in profitability [8].

| 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | 是 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00135 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 16,000,000,000 | HKD | | 0.01 | HKD | | 160,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 16,000,000,000 | HKD | | 0.01 | HKD | | 160,000,000 | 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | | | 致：香港交易及結算所有限公司 公司名稱: 昆侖能源有限公司 呈交日期: 2025年11月3日 I. 法定/註冊股本變動 FF301 III.已發行股份及/或庫存股份變動詳情 ...