Investment Rating - The report maintains a "Buy" rating for Kunlun Energy (135 HK) with a target price adjusted to HKD 9.08, indicating a potential upside of 16.9% from the current price of HKD 7.77 [2][12]. Core Insights - The report highlights that the warm winter has slightly impacted retail gas sales, leading to a downward adjustment in profit forecasts for Kunlun Energy. The core earnings for 2024-2026 have been revised down by 5.4%, 2.9%, and 3.6% respectively [2][5]. - The company is expected to see a retail gas sales growth of 8.6% for the full year of 2024, despite a year-on-year decline in natural gas demand starting November 2024 [5]. - The LNG receiving station's utilization rate for 2024 has been adjusted down by 1 percentage point to 89% due to a projected 1% year-on-year decline in natural gas imports [5]. Financial Forecasts - Revenue projections for Kunlun Energy are as follows: - 2024E: RMB 188,386 million - 2025E: RMB 202,300 million - 2026E: RMB 215,037 million [4][14]. - Net profit estimates have been revised to: - 2024E: RMB 6,466 million - 2025E: RMB 7,216 million - 2026E: RMB 7,883 million, reflecting decreases of 5.4%, 2.9%, and 3.6% respectively [4][14]. Operational Data - The forecasted gas sales volume is expected to grow as follows: - 2024E: 32.9 billion cubic meters - 2025E: 35.9 billion cubic meters - 2026E: 38.8 billion cubic meters, with growth rates of 8.6%, 9.0%, and 8.1% respectively [6]. - The LNG processing volume is projected to increase to 3.27 billion cubic meters in 2024, with a utilization rate of 52% [6]. Dividend Policy - The management has set a dividend payout target of 43% for 2024, increasing to 45% in 2025, with expected dividend yields of 4.4% and 5.1% respectively, which remains attractive [5].

Investment Rating - The report assigns a "Buy" rating to the company with a 6-month target price of HKD 9.61, compared to a current price of HKD 8.32 [3][28]. Core Insights - The company, Kunlun Energy, is the only platform enterprise in China engaged in natural gas terminal sales and comprehensive utilization, benefiting from the trend of industrial transfer to the central and western regions of China [4][27]. - The company has a strong financial position with low debt levels and sufficient cash on hand, and it has announced a three-year dividend plan with increasing payout ratios [26][28]. - The natural gas sales segment accounts for nearly 80% of total revenue, with a significant focus on industrial and commercial customers [27][22]. Company Overview - Kunlun Energy was established as a red-chip company under the China National Petroleum Corporation (CNPC) and has transitioned from oil and gas exploration to focus on natural gas terminal sales since 2008 [2][9]. - The company operates 284 urban gas projects across 30 provinces, with an annual natural gas sales volume of 50 billion cubic meters [4][27]. - The shareholder structure includes CNPC holding 56.05% and Sinopec holding 1.48% [3][11]. Financial Performance - The company reported a total market capitalization of HKD 72.04 billion and an average trading volume of HKD 111.92 million [3]. - Revenue from natural gas sales is projected to grow at a CAGR of 12% over three years, with the company actively expanding its customer base [22][27]. - The forecasted net profits for 2024, 2025, and 2026 are RMB 6,060 million, RMB 6,484 million, and RMB 6,927 million, respectively, with corresponding EPS of 0.70, 0.75, and 0.80 [28][31]. Business Segments - The company's revenue is divided into four main segments: natural gas sales (80%), LPG sales (15%), LNG processing and storage (5%), and exploration and production (1%) [27][41]. - The LNG processing and storage segment has the highest and most stable profit margins, while the natural gas sales segment shows consistent growth [20][27]. Market Position - Kunlun Energy is positioned as a leading natural gas distributor in China, with a significant market share in urban gas distribution [22][27]. - The company is expected to benefit from the increasing demand for natural gas in China, projected to grow significantly in the coming years [76][79].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 10.6, indicating a potential upside of 30% from the current price [3][29]. Core Insights - The company's LNG processing and storage business has shown positive revenue growth, achieving RMB 5.662 billion in H1 2024, a year-on-year increase of 9.14%, with a pre-tax profit of RMB 1.648 billion, up 22.89% [2][27]. - The company has a three-year dividend distribution plan from 2023 to 2025, with the annual payout ratio expected to gradually increase to 45% [2][28]. - The company aims for an LNG receiving station load factor of 90% for the year, indicating a positive outlook for the LNG industry chain [2][27]. Summary by Sections Financial Performance - In H1 2024, the company achieved natural gas sales of 26.438 billion cubic meters, a year-on-year increase of 10.55%, with retail gas volume reaching 16.302 billion cubic meters, up 10.25% [6][17]. - The average production load factor for the company's 14 operational plants was 58.4%, an increase of 19.5 percentage points year-on-year [2][27]. Dividend Policy - The company declared an interim dividend of 16.41 cents in H1 2024, with a payout ratio of 43%, reflecting stable profit growth and significant potential for future dividend increases [2][28]. Market Position - The company operates in four main segments: natural gas sales, LPG sales, LNG processing and storage, and exploration and production, with a user base exceeding 16 million across 31 provinces in China [6][17].

Investment Rating - The report maintains an "Outperform" rating for Kunlun Energy (135 HK) with a target price of 8.11 HKD/share [6][9] Core Views - Kunlun Energy achieved a comprehensive improvement in revenue and profit in H1 2024, driven by growth in natural gas sales volume and continuous optimization of sales structure [2][6] - The company plans to increase its dividend payout ratio to 45% in 2025, reflecting confidence in its financial stability and growth prospects [2][6] Financial Performance - Revenue in H1 2024 reached 92.922 billion yuan, a 10.5% YoY increase, with pre-tax profit growing 6.74% YoY to 7.249 billion yuan [2][6] - Net profit attributable to the parent company increased by 2.6% YoY to 3.305 billion yuan, and the company announced its first mid-term dividend of 16.41 yuan per share [2][6] Natural Gas Business - Natural gas sales volume in H1 2024 grew 10.6% YoY to 264.38 billion cubic meters, with retail gas volume increasing 10.3% YoY to 163.02 billion cubic meters [2][7] - Industrial and commercial gas sales accounted for a larger share of retail gas sales, increasing by 4.6 percentage points YoY, driven by growth in "three new" industrial users (new energy vehicles, lithium batteries, photovoltaic products) [2][7] - The company added 449,000 new users, bringing the total to 16.053 million, further solidifying its leading position in the terminal market [2][7] LPG and LNG Business - LPG business achieved a 32.6% YoY increase in pre-tax profit to 561 million yuan, despite a 0.4% YoY decline in sales volume, due to operational efficiency improvements [8] - LNG processing and storage business saw a 22.9% YoY increase in pre-tax profit to 1.648 billion yuan, with LNG gasification and loading volume growing 5.9% YoY to 77.70 billion cubic meters [8] - The average load rate of LNG plants increased by 19.5 percentage points YoY to 58.4%, with self-produced and sold volume growing 11.5% YoY [8] Exploration and Production Business - Exploration and production business faced pressure, with revenue declining 85.5% YoY to 88 million yuan due to the expiration of exploration contracts for Liaohe and Peru oilfields [8] - Crude oil sales decreased by 16.5% YoY to 4.04 million barrels, although the average crude oil price increased by 2.15 USD/barrel to 67.77 USD/barrel [8] Valuation and Forecast - The report forecasts Kunlun Energy's main business revenue for FY24-26 at 189.98/202.59/215.16 billion yuan, with net profit attributable to the parent company at 5.666/6.077/6.497 billion yuan [9] - The target price is set at 8.11 HKD/share, reflecting the company's stable operations and continuous optimization of its sales structure [9]

Financial Performance - The revenue for the period was approximately RMB 92,922 million, representing an increase of 6.72% year-on-year[4] - Profit attributable to shareholders of the Company was RMB 3,305 million, representing an increase of 2.58% year-on-year[4] - The gross revenue increased by 6.7% year-on-year, achieving a net profit attributable to shareholders of RMB 3,305 million, with strong operating cash flow of RMB 5,352 million[9] - Revenue from the natural gas sales business was RMB 76.66 billion, representing a year-on-year increase of 9.74%, while profit before income tax was RMB 5.005 billion, up 2.41%[16] - The company achieved a total revenue of RMB 92.922 billion, with a net profit attributable to shareholders of RMB 3.305 billion, and strong operating cash flow of RMB 5.352 billion[1] - Profit before income tax expenses was approximately RMB 7,249 million, an increase of 6.74% from RMB 6,791 million for the same period last year[33] - Profit for the period was RMB 5,320 million, up from RMB 5,041 million in the previous year, reflecting a growth of 5.5%[70] - Basic and diluted earnings per share attributable to shareholders of the Company increased to 38.17 RMB cents from 37.21 RMB cents, representing a rise of 2.6%[72] Natural Gas and Energy Sales - The Group's natural gas retail sales volume was 16,302 million cubic metres, representing an increase of 10.25% year-on-year[4] - The total number of users exceeded 16 million, with natural gas sales volume reaching 26,438 million cubic metres, an increase of 10.55% year-on-year[6] - Natural gas sales volume reached 26.438 billion cubic meters, a year-on-year increase of 10.55%, with retail gas sales volume at 16.302 billion cubic meters, up 10.25%[15] - The company’s LNG receiving station liquid loading volume increased by 53.52% year-on-year, contributing to a historic turnaround in profitability[1] - The LNG refueling-at-sea business developed rapidly, with refueling volume increased by 87% year-on-year[10] - The Natural Gas Sales segment generated revenue of RMB 75,506 million, while the LPG Sales segment contributed RMB 12,887 million[134] User Growth and Engagement - The total number of users surpassed 16.0527 million, with 448,700 new users added in the first half of the year, including 436,000 residential users[15] - The number of registered users on the "Kunlun Huixiang+" platform reached 600,000, with platform sales increasing by 50% year-on-year[10] - The company registered 600,000 users on the "Kunlun Huixiang+" platform, with platform sales increasing by 50% year-on-year[1] Operational Efficiency - The average production capacity of 14 processing plants under continuous operation was 58.4%, representing a year-on-year increase of 19.5%[21] - The company’s marketing quality improved, with industrial user sales increasing by 21.46% and the proportion of industrial and commercial gas sales in retail volume rising by 4.6 percentage points year-on-year[1] - The company aims to optimize the natural gas terminal sales structure to ensure a rise in both volume and efficiency, focusing on LNG heavy trucks and expanding LNG ship refueling-at-sea business[26] Financial Position and Assets - Total assets as of June 30, 2024, were approximately RMB 142,327 million, a decrease of 0.83% from RMB 143,519 million as of December 31, 2023[43] - The Group's total equity, interest-bearing borrowings, and lease liabilities amounted to RMB 111,494 million as of June 30, 2024[49] - Total liabilities decreased to RMB 55,630 million as of June 30, 2024, down from RMB 57,736 million, representing a decline of 3.64%[76] - Cash and cash equivalents increased to RMB 29,422 million, up from RMB 27,353 million, indicating a growth of 7.57%[76] Dividends and Shareholder Returns - The Board declared an interim dividend of RMB 16.41 cents per share, totaling approximately RMB 1,421 million, to be paid on October 31, 2024[55] - The final dividend for 2023 was RMB 2,457 million, reflecting the company's commitment to returning value to shareholders[80] - Shareholders can elect to receive the 2024 Interim Dividend in RMB, with the record date set for September 12, 2024[56] Corporate Governance and Compliance - The Company has complied with all provisions of the Corporate Governance Code, except for the absence of an independent non-executive director at the annual general meeting held on May 30, 2024[59] - The unaudited consolidated interim financial report for the period has been reviewed by the Audit Committee with no disagreements noted[59] Future Outlook and Strategic Initiatives - The Company is focused on building a digital and intelligent support system, with plans to fully launch the Kunlun ERP by May 2025[30] - The Company is committed to deepening carbon asset management research and exploring hydrogen blending technology in city gas pipelines[28] - The company is focusing on the development of new energy projects and enhancing carbon asset management to ensure high-quality and stable growth[31] - The Company plans to promote the rapid development of gas and electricity in new energy businesses and achieve substantial progress in the Chongqing Tongliang natural gas distributed project[28]

Investment Rating - Buy (Maintained) [1] Core Views - The company reported a revenue of 929.2 billion yuan in H1 2024, a year-on-year increase of 6.7%, and a net profit attributable to the parent company of 3.31 billion yuan, up 2.6% year-on-year [1] - The company announced its first interim dividend of 16.41 cents per share, with a payout ratio of 43%, and plans to increase the dividend ratio to 45% in 2025 [1] - The company's natural gas sales business saw a 9.6% increase in revenue and a 2.4% increase in pre-tax profit, with retail gas volume growing by 10.3% year-on-year [1] - The LNG processing and storage business experienced an 18.0% increase in revenue and a 22.9% increase in pre-tax profit, with processing volume up 61.7% year-on-year [1] - The LPG sales business saw a 6.6% decrease in revenue but a 32.6% increase in pre-tax profit, with improved regional resource allocation and higher retail share [1] - The exploration and production business revenue and pre-tax profit declined by 85.5% and 39.8% respectively, due to the expiration of exploration contracts in Liaoning and Peru [1] Business Performance - The company's retail gas volume has grown at a compound annual growth rate (CAGR) of 16.0% from 2018 to 2023, significantly higher than the national average of 7.1% [1] - The company's industrial gas consumption has been driven by the national policy encouraging the transfer of manufacturing industries to the central and western regions and Northeast China [1] - The company benefits from the strong resource support of its parent company, China National Petroleum Corporation (CNPC), which holds a 57.58% stake in the company [1] Financial Forecasts - The company's revenue is expected to grow from 177.726 billion yuan in 2023 to 210.679 billion yuan in 2026, with a CAGR of 6.47% [1][3] - Net profit attributable to the parent company is forecasted to increase from 5.682 billion yuan in 2023 to 7.060 billion yuan in 2026, with a CAGR of 7.63% [1][3] - The company's EPS is projected to rise from 0.66 yuan in 2023 to 0.82 yuan in 2026, with a P/E ratio decreasing from 10.80 to 8.69 over the same period [1][3] Valuation - The company's current P/E ratio is 10.80, with a P/B ratio of 0.72 and an EV/EBITDA ratio of 2.98 [3] - The company's ROE is expected to increase from 8.96% in 2023 to 9.50% in 2026, reflecting steady profitability [3]

Investment Rating - The report maintains a "Buy" rating for Kunlun Energy (135 HK) [3] Core Insights - The company is expected to see a moderate year-on-year profit growth in the first half of the year, driven by stable growth in the natural gas sales segment and restructuring of the gas station business [1] - The natural gas sales segment is projected to see a pre-tax profit increase of 5% year-on-year, with retail gas volume expected to rise by approximately 2% and wholesale gas volume increasing by 30% due to the integration of gas stations [1] - The LNG segment is anticipated to remain stable, while the oil and gas extraction business is expected to contribute less to profits, with a projected 76% decline in pre-tax profit for this segment [1] - The company has announced a mid-term dividend distribution for the first time in this interim report, with a dividend of approximately 0.15 RMB per share, maintaining a 40% payout ratio [1] - The company has a robust cash flow and cash position, with a net cash of approximately 15.5 billion RMB at the end of 2023, and an average free cash flow of about 9 billion RMB per year from 2024 to 2026 [1] Financial Performance Summary - Revenue for the first half of 2024 is estimated at 93,999 million RMB, reflecting an 8% year-on-year increase [2] - The pre-tax profit for the first half of 2024 is projected to be 6,986 million RMB, a 2.9% increase compared to the previous year [2] - The net profit for the first half of 2024 is expected to be 3,315 million RMB, also a 2.9% increase year-on-year [2] - The company’s gas sales volume is expected to grow from 30.3 billion cubic meters in 2023 to 33.3 billion cubic meters in 2024, representing a 9.7% growth [2] - The LNG processing volume is projected to increase from 2.83 billion cubic meters in 2023 to 3.08 billion cubic meters in 2024, with a utilization rate of 49% [2] Cash Flow and Financial Ratios - The operating cash flow for 2024 is estimated at 13,295 million RMB, with capital expenditures projected at 5,013 million RMB [5] - The company is expected to maintain a dividend payout ratio increasing from 40% in 2023 to 45% in 2025 [5] - The net debt-to-equity ratio is projected to remain at 6.2%, indicating a net cash position [6]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 9.35, indicating a potential upside of 19.0% from the current price of HKD 7.86 [11]. Core Insights - The company is expected to see moderate profit growth in the first half of 2024, driven by resource integration in its gas station operations, leading to an increase in LNG segment profits. The net profit for the first half of 2024 is projected to grow by 2.6% to RMB 3.3 billion, aligning with expectations [2][4]. - The company has successfully integrated gas station resources, which has positively impacted its LNG processing segment, turning a profit of RMB 0.35 billion in the first half of 2024 compared to a loss of RMB 0.55 billion in the same period last year [2]. - The company has declared an interim dividend of RMB 0.164 per share, with a payout ratio of 43%, which is expected to increase to 45% by 2025 [2][4]. Financial Overview - Revenue for 2024 is estimated at RMB 188.3 billion, reflecting a year-on-year growth of 6.2% [14]. - The net profit for 2024 is projected to be RMB 6.8 billion, with a compound annual growth rate (CAGR) of 10% expected from 2023 to 2026 [2][14]. - The company’s earnings per share (EPS) for 2024 is forecasted at RMB 0.79, representing an 11.2% increase compared to the previous year [14]. - The company’s dividend yield is projected to be 4.7% for 2024 and 5.4% for 2025, making it an attractive investment option [2][14]. Segment Performance - The natural gas sales segment is expected to see a revenue increase of 9.6% year-on-year in the first half of 2024, despite a decrease in gas station sales volume [4]. - The LNG processing and storage segment is projected to grow by 18.0% year-on-year in the first half of 2024, benefiting from improved operational efficiency [4]. - The LPG sales segment is anticipated to improve significantly, with a projected year-on-year profit increase of 57% for 2024 [2][8]. Market Position - The company has a market capitalization of approximately HKD 68.06 billion and has shown a year-to-date price change of 11.65% [1][11]. - The stock has a 52-week high of HKD 9.06 and a low of HKD 5.53, indicating a strong recovery potential [1].

Investment Rating - The investment rating for the company is "Buy" with a target price set above the current price of 7.86 HKD, maintaining the rating for the next six months [1]. Core Insights - The company reported a revenue of 929.22 billion RMB for the first half of 2024, representing a year-on-year increase of 6.72%, with a net profit attributable to shareholders of 3.305 billion RMB, up 2.58% year-on-year [2]. - The growth in retail gas volume exceeded expectations, with a total gas sales volume of 26.438 billion cubic meters, a year-on-year increase of 10.5%, and a significant increase in the number of commercial and industrial users [3]. - The LNG processing and storage segment showed remarkable growth, with sales revenue increasing by 18% and a pre-tax profit increase of 22.9% [4]. - LPG sales exceeded half of the annual target, achieving a sales volume of 2.9258 million tons, with a pre-tax profit increase of 32.62% [5]. - The company announced a mid-term dividend of 0.164 RMB per share, with a payout ratio of 43% [6]. - Profit forecasts for the years 2024, 2025, and 2026 are maintained at 6.504 billion, 7.014 billion, and 7.599 billion RMB respectively, with corresponding EPS of 0.75, 0.81, and 0.88 RMB [7]. Summary by Sections Basic Data - Total shares outstanding: 8,658.80 million shares - Total market capitalization: 68,058.18 million HKD - Net asset value per share: 8.08 HKD - Debt-to-asset ratio: 39.09% - Highest/Lowest price in one year: 9.23/5.45 HKD [1]. Performance Metrics - The company achieved a total gas sales volume of 26.438 billion cubic meters, with retail gas volume at 16.302 billion cubic meters, reflecting a year-on-year increase of 10.3% [3]. - The average gas selling price was 2.87 RMB per cubic meter, while the average purchase price was 2.42 RMB per cubic meter [3]. Capital Expenditure - Capital expenditure for the first half of 2024 was 2.817 billion RMB, primarily for natural gas sales [6].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [4]. Core Insights - The company reported a revenue of 92.922 billion RMB for the first half of 2024, reflecting a year-on-year growth of 6.72%. The net profit attributable to shareholders was 3.305 billion RMB, an increase of 2.58%, aligning with expectations [4]. - The company has announced its first interim dividend of 0.1641 RMB per share [4]. - Natural gas sales volume reached 26.438 billion cubic meters in the first half of 2024, a year-on-year increase of 10.55%, with retail gas volume growing by 10.25% [4]. - The company has expanded its user base, adding 448,900 new users in the first half of 2024, bringing the total to 16.0529 million users [4]. - The average load rate of LNG receiving stations improved to 85.4%, with a significant increase in LNG loading volume by 53.5% [4]. - The company achieved a tax-pre profit of 3.5 million RMB from its LNG processing and storage business, marking its first profit in history [4]. Financial Summary - Revenue for 2022 was 171.944 billion RMB, with projections of 177.354 billion RMB for 2023, and expected growth to 195.839 billion RMB in 2024 [5]. - The net profit attributable to shareholders is projected to grow from 5.682 billion RMB in 2023 to 6.986 billion RMB in 2024 [5]. - The company plans to increase its dividend payout ratio to 45% by 2025, enhancing its investment appeal [4].