Core Viewpoint - The four major urban gas companies in China have released their 2024 ESG reports, highlighting their greenhouse gas emissions and sustainability efforts, with a notable decrease in emissions across the board [1][3]. Emission Data Summary - Kunlun Energy has the highest total greenhouse gas emissions at 1.594 million tons of CO2 equivalent, a year-on-year decrease of 1.5%, with scope 1 emissions at 490,000 tons and scope 2 emissions at 1.104 million tons [3]. - New Hope Energy reported total emissions of 205,000 tons of CO2 equivalent, down 12.4% year-on-year, with scope 1 at 101,000 tons and scope 2 at 104,000 tons [3]. - China Resources Gas emitted 129,000 tons of CO2 equivalent, a decrease of 10.8% year-on-year, with scope 1 at 39,000 tons and scope 2 at 90,000 tons [3]. - Honghua Smart Energy had the lowest emissions at 77,000 tons of CO2 equivalent, with the largest reduction of 26% year-on-year, scope 1 at 48,000 tons and scope 2 at 29,000 tons [3]. Scope 3 Emissions - Kunlun Energy's scope 3 emissions exceeded 100 million tons, reaching 142 million tons of CO2 equivalent, with the highest contributions from "use of sold products" and "purchased goods and services" [7]. - New Hope Energy's scope 3 emissions were 60.2 million tons, primarily from the "use of sold products" category [8]. - Honghua Smart Energy reported scope 3 emissions of 11.7 million tons, with the majority from "use of sold products" [8]. Hazardous Waste and Environmental Investment - Honghua Smart Energy reported the highest hazardous waste at 25 tons, followed by New Hope Energy at 22.68 tons and China Resources Gas at 9.24 tons [11]. - Kunlun Energy disclosed hazardous solid waste of 756 tons and methane emissions of 6,863 tons, down 4% year-on-year [13]. Sustainability Initiatives - Urban gas companies are actively pursuing new growth avenues to align with carbon neutrality goals, focusing on "urban gas + new energy" strategies [14]. - Honghua Smart Energy has implemented 128 zero-carbon smart parks and has a total installed photovoltaic capacity of 2.3 GW [14]. - China Resources Gas is focusing on distributed photovoltaic energy, with a total signed installed capacity of 4 GW and operational capacity of 3.1 GW [14]. - Kunlun Energy is expanding its renewable energy projects, including distributed photovoltaic and wind energy [14][15]. - New Hope Energy aims to increase the share of renewable energy to 36% by 2030, with a current share of 23.5% [15][16].

Core Viewpoint - The successful issuance of the "Zero Carbon Smart Phase II Green Asset-Backed Special Plan (Carbon Neutral)" by Towngas Smart Energy reflects strong market recognition of the company's asset quality and comprehensive energy management capabilities, with a subscription multiple of 2.4 times [3]. Group 1: Financial Details - The issuance scale of the green asset-backed plan is 470 million RMB, with a priority interest rate of 2.2%, marking the second issuance within a 5 billion RMB shelf program [3]. - The renewable energy business segment is expected to see a significant increase in after-tax operating profit, projected to grow by 514% to 479 million HKD in 2024 [3]. Group 2: Business Strategy and Development - The company aims to become a leading green smart energy enterprise by creating a three-dimensional system of "investment + service + platform," which includes investments in distributed solar, energy storage, and value-added services such as smart microgrids and carbon trading [4]. - The funds raised will be directed towards renewable energy projects, specifically in high-quality solar and energy storage initiatives, contributing to the energy transition and carbon neutrality goals [4]. Group 3: Market Position and Future Outlook - As of the end of 2024, the company's photovoltaic grid-connected capacity reached 2.3 GW, positioning it as a leader in the distributed solar industry [3]. - The company has signed over 400 MWh of energy storage contracts in 2024, with expectations for new contracts in 2025 to exceed those of 2024, indicating a strong growth trajectory in the energy storage sector [3].

Core Viewpoint - The company aims to enhance liquidity by selling its entire stake in several wholly-owned subsidiaries engaged in rooftop photovoltaic power generation projects in China for approximately RMB 470 million [1] Group 1: Transaction Details - The company entered into an agreement on June 3, 2025, to sell its stake and outstanding loans related to the rooftop photovoltaic projects [1] - The total consideration for the sale is approximately RMB 470 million [1] - The company will also subscribe to part of the equity-level asset-backed securities issued under the second phase of the asset-backed special plan, amounting to RMB 24 million, which represents about 5.1% of the total principal amount of the asset-backed securities [1] Group 2: Use of Proceeds - The net proceeds from the sale will be used to invest in rooftop photovoltaic and energy storage projects, repay bank loans, and serve as general working capital [1]

Core Viewpoint - The article discusses the recent developments in the commercial energy storage sector in Anhui, highlighting significant projects and collaborations aimed at enhancing energy storage capabilities and integrating renewable energy solutions [2][5]. Group 1: Project Developments - A 37.5MW/100.5MWh energy storage station has been successfully connected to the grid in He County, Anhui, marking it as the largest user-side energy storage project in the region [3][5]. - The total investment for the He County project is 115 million yuan, and it employs a lithium iron phosphate storage system [5]. - As of now, there are 23 publicly announced user-side energy storage projects in Anhui since 2025, with a total capacity of 484.874MW/1451.319MWh [6][8]. Group 2: Project Distribution and Collaboration - The projects are primarily located in cities such as Hefei, Anqing, and Wuhu, with Hefei accounting for 32% of the total projects [6]. - The collaboration between Tianneng and Honghua Smart Energy aims to deepen strategic partnerships focusing on multi-scenario applications and virtual power plant construction [5]. - The largest tender project announced is a 300MW/600MWh user-side energy storage project in Woyang County [8]. Group 3: Future Prospects - The article indicates a growing trend in the energy storage market, with various companies like China Power Construction and Sunshine Power involved in the development of these projects [6][11]. - The integration of energy storage with renewable energy sources is emphasized as a key strategy for future energy solutions [5][6].

Financial Performance - The company reported a revenue of HKD 21,314 million for 2024, representing an increase from HKD 19,842 million in 2023, marking a growth of approximately 7.4%[36] - The company achieved a net profit attributable to shareholders of HKD 1,606 million in 2024, slightly down from HKD 1,575 million in 2023, indicating a decrease of around 1.5%[36] - The group’s overall revenue increased by 7.4% to HKD 21.314 billion, while core business profit rose by 34.5% to HKD 1.601 billion (up 37.2% in RMB) [42] - The group’s revenue for 2024 was 19.626 billion RMB, up 9.6%, while revenue in HKD increased by 7.4% to 21.314 billion HKD[139] - Total operating expenses for 2024 amounted to 19.420 billion HKD, reflecting a year-on-year increase of 6.8%[141] - The net profit attributable to shareholders for 2024 rose by 2.0% to 1.606 billion HKD, while core business profit surged by 34.5% to 1.601 billion HKD (up 37.2% in RMB) before non-operating gains and losses[147] User and Project Growth - The number of users across all enterprises reached 1,606, an increase from 1,575 in 2023, reflecting a growth of about 2%[34] - The company has secured a total of 749 projects across 27 provincial regions in mainland China, up from 536 projects at the end of 2023, representing an increase of approximately 39.7%[32] - The total number of urban gas projects reached 191, with 4 new projects added during the year, covering 19 provincial regions, and the total customer base reached 17.64 million, with 870,000 new customers added[72] - In 2024, the group's overall gas sales volume increased by 5% to 17.201 billion cubic meters, with a total customer base reaching 17.64 million, adding 870,000 new customers during the year[138] Renewable Energy Initiatives - The company aims to enhance its renewable energy business, which accounted for 20% of gas consumption in 2024, up from 19% in 2023[35] - The renewable energy business achieved a net profit of HKD 479 million in the year, representing a fivefold increase year-on-year, with over 1,000 renewable energy projects constructed across 24 provinces[95] - The renewable energy business is expected to enter a growth phase in 2024, aligning with the national target of exceeding 1.5 billion tons of standard coal in renewable energy consumption by 2030[94] - The group is actively exploring the application of hydrogen blending in natural gas, with a goal to cover 100,000 household customers in the "Hydrogen into Ten Thousand Homes" project in Weifang, Shandong[90] - The group aims to develop biomass natural gas projects and explore hydrogen blending opportunities in natural gas pipelines by 2025[47] Financial Management and Investments - The group maintains a prudent financial management policy, ensuring adequate cash and credit levels to support operations and business development[148] - The financing cost for 2024 decreased by 5.4% to 729 million HKD, attributed to strict capital expenditure control and successful low-interest loans[146] - The group has issued medium-term notes totaling RMB 1.8 billion with an average interest rate of 4.2% and an average term of 4.4 years as of December 31, 2024[151] - The group raised a total of RMB 1.5 billion through the issuance of 1-year and 3-year panda bonds in June 2023, with an average interest rate of 3.27%[151] - The group successfully established and issued a green asset-backed securities program with an initial issuance scale of RMB 515 million, part of a total shelf of RMB 5 billion[169] Sustainability and ESG Efforts - The company has been recognized as one of the "Best 1%" Chinese enterprises in gas utilities by S&P Global CSA, highlighting its commitment to sustainability[11] - The group has received multiple awards for its ESG disclosures and sustainable practices, reinforcing its reputation in the industry[19] - The group has reduced greenhouse gas emissions by approximately 26% compared to 2023, demonstrating its commitment to sustainability[110] - The group has engaged over 5,000 participants in a biodiversity and new energy summit, highlighting the global focus on renewable energy and biodiversity issues[119] - The group has received recognition for its ESG efforts, maintaining a strong position in the S&P Global ESG ratings[46] Strategic Initiatives and Future Plans - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[36] - The group plans to enhance its resource pool and strengthen international trade business, including the import of liquefied natural gas[48] - The group will continue to expand energy storage projects and actively promote Energy as a Service (EaaS) business development[48] - The group is focusing on the "Gas+" business model, targeting public institutions, industrial, and construction sectors to provide comprehensive energy services[47] - The group has initiated a strategic cooperation with national pipeline networks and major oil companies to ensure diverse and sufficient gas supply[45] Board and Management - Dr. Zheng Mu Zhi has been an independent non-executive director since May 2007 and is currently the chairman of the remuneration committee and a member of the audit and risk committee[55] - Mr. Li Min Bin has served as an independent non-executive director since May 2007 and is the co-CEO of East Asia Bank, overseeing overall operations and management[57] - Dr. Lu Gong Hui has been an independent non-executive director since April 2022 and is a member of multiple committees including audit and risk, nomination, and remuneration[59] - Mr. Liao Ji Li has been a non-executive director since November 2021, with over 20 years of experience in private equity investments across various sectors in Greater China[62] - Mr. Huang Wei Yi has been the executive director and CEO since March 2007, recognized as one of Forbes' "Best CEOs of Chinese Listed Companies" in 2012 and 2013[64]

Investment Rating - The report maintains an "Accumulate" rating for the gas industry [1] Core Views - Concerns over economic recession due to tariffs have led to a significant drop in US gas prices, while tariffs have temporarily halted the recovery of European gas prices, with domestic prices remaining stable [1][10] - The report highlights a supply-demand analysis indicating a 2.1% week-on-week increase in total gas supply in the US, while total demand increased by 7% week-on-week [15][17] - The report emphasizes the ongoing adjustments in pricing mechanisms and the gradual recovery of demand in the domestic market [50][51] Price Tracking - As of April 17, 2025, US HH gas prices decreased by 20.6%, European TTF prices increased by 6.8%, and domestic LNG prices remained stable with a week-on-week change of -0.5% [10][12] - The average total supply of natural gas in the US reached 1,124 billion cubic feet per day, with a year-on-year increase of 6.3% [15] Supply and Demand Analysis - The report notes that the US gas market is experiencing a week-on-week price drop of 20.6% due to tariff-induced inflation concerns, while total demand has increased by 7% [15][17] - In Europe, gas consumption for March 2025 was 60.5 billion cubic meters, reflecting a year-on-year increase of 1.8% [17] Pricing Progress - The report indicates that 61% of cities have implemented residential pricing adjustments, with an average increase of 0.20 yuan per cubic meter [39] - The pricing mechanism is expected to continue evolving, with potential for further adjustments in the future [39] Important Events - The report details the increase of tariffs on US LNG to 140%, noting that the impact on supply is limited due to the small proportion of US LNG in China's total imports [46] - Ongoing negotiations regarding the Russia-Ukraine conflict are highlighted as a significant factor influencing European gas supply dynamics [49] Investment Recommendations - The report recommends focusing on companies that can optimize costs and benefit from the evolving pricing mechanisms, particularly highlighting New Energy and China Gas as key players [50][51] - It suggests monitoring companies with strong long-term contracts and flexible scheduling capabilities, such as Jiufeng Energy and Xin'ao [51]

Core Viewpoint - Honghua Smart Energy (01083) has demonstrated strong performance in revenue and core profit growth, reflecting positive market sentiment and expectations for future development [1][2]. Financial Performance - In 2024, Honghua Smart Energy achieved revenue of HKD 21.314 billion, a year-on-year increase of 7.4%, while core profit surged by 34.5% to HKD 1.601 billion [2]. - The company declared a final dividend of HKD 0.16 and a special dividend of HKD 0.03, totaling HKD 0.19 [2]. Market Reaction - Following the earnings report, the company's stock price rose by over 9% on March 17, ultimately closing with a gain of 7.93%, reflecting a cumulative increase of nearly 15% since the beginning of March [1]. Analyst Ratings - Various domestic and international brokerages, including CICC, Citigroup, and Huatai Securities, have issued positive reports on the company, indicating strong recognition of its value [1][2]. - Target prices from analysts range from HKD 3.45 to HKD 4.99, with ratings such as "Outperform" and "Buy" [2][10]. Business Growth and Strategy - The company is focusing on its gas business, with gas sales volume expected to increase by 5% to 17.201 billion cubic meters in 2024, supported by the implementation of a pricing mechanism [3][4]. - The comprehensive gas price difference improved to HKD 0.56 per cubic meter, with expectations for further growth in 2025 [3]. Renewable Energy Development - Honghua Smart Energy's renewable energy segment reported a significant profit increase of 514% to HKD 479 million in 2024, with solar power generation capacity reaching 2.3 GW [5][6]. - The company is adopting a light-asset model, which is expected to drive further growth in its renewable energy business, contributing to overall profitability [6][7]. Future Outlook - Analysts anticipate that the company's renewable energy business will continue to be a key driver of growth, with projections for new installations of 0.6 GW and 0.5 GW in 2025 and 2026, respectively [6][10]. - The ongoing implementation of the pricing mechanism and the light-asset strategy are expected to enhance the company's performance and cash flow stability in the long term [10][11].

Summary of Conference Call Notes Industry Overview - The conference call primarily discusses the **natural gas industry** and specifically focuses on **Hong Kong and mainland China's gas companies** such as **Hong Kong and China Gas**, **Towngas**, and **New World Energy** [2][3][6][7]. Key Points and Arguments - **Revenue Growth**: Towngas reported a **7.3% year-on-year increase** in overall revenue for 2025, attributed to increased gas volume and improved gross margins. Core profit reached **1.6 billion HKD**, a **34.5% increase** [2]. - **Renewable Energy Contribution**: The renewable energy segment, particularly distributed solar photovoltaic business, contributed over **400 million HKD** in net profit, highlighting its profitability in the renewable sector [2]. - **Gas Margin Improvement**: The gas sales gross margin improved from **0.54 HKD** in 2023 to **0.56 HKD** in 2024, with expectations for further growth in 2025 [2]. - **Impact of LNG Prices**: The decline in international LNG prices since 2023 has reduced costs for coastal gas companies like New World Energy and China Resources Gas, while central and western regions benefit less [3][6]. - **Natural Gas Pricing Strategy**: China National Petroleum Corporation (CNPC) adjusted its pricing strategy by modifying the ratio of regulated to non-regulated periods and increasing the weight of spot LNG prices, affecting coastal and inland pricing differently [5]. - **Performance Elasticity**: Companies with a higher proportion of residential gas sales, such as China Resources Gas, benefit more from price adjustments, while those with a higher industrial gas sales ratio, like New World Energy, benefit from cost reductions [6]. - **Valuation Potential**: Towngas has a low valuation with a **price-to-book (PB) ratio of 0.5**, indicating potential for valuation recovery through investments in Shanghai Gas and distributed solar photovoltaic projects [7]. - **Global Gas Supply and Demand**: The global gas supply-demand balance remains stable, with demand growth around **2%**. High gas prices have constrained some demand, while countries like Japan and Germany are adjusting their energy mix, potentially reducing LNG imports [8]. - **Future LNG Capacity**: The U.S. and Qatar are expected to increase LNG export capacity significantly by 2025-2026, which will contribute to global gas supply [10]. - **Market Confidence**: Recent declines in Asian gas prices, attributed to seasonal factors, indicate a non-tight supply situation, enhancing market confidence in a downward price trend [12]. Other Important Insights - **Dividend Strategies**: Hong Kong and China Gas offers a dividend of **0.35 HKD per share**, with a yield of approximately **5%**, while China Gas provides **0.50 HKD per share** [11]. - **Investment Opportunities**: Companies with low valuations and strong growth potential, such as Towngas and China Gas, are seen as having good recovery potential, while growth companies like China Resources Gas and New World Energy are attracting attention due to their growth prospects [11].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a significant increase in core profits, driven by its renewable energy business, which saw a net profit increase of over 400 million HKD year-on-year [6] - The company plans to distribute a total dividend of 0.19 HKD per share, resulting in a dividend yield of 5.79% based on the closing price on March 14 [6] - The gas sales volume is expected to grow steadily, with total gas sales projected to reach 17.2 billion cubic meters in 2025, reflecting a year-on-year increase of 4.5% [6] - The renewable energy segment, particularly solar power, is expected to continue its rapid expansion, with plans to achieve 6 GW of solar assets on the balance sheet by 2030 [6] Financial Data and Profit Forecast - Revenue (million HKD): - 2023: 19,842 - 2024: 21,314 (7.4% YoY growth) - 2025E: 21,861 (2.6% YoY growth) - 2026E: 22,739 (4.0% YoY growth) - 2027E: 23,499 (3.3% YoY growth) [2][7] - Net Profit (million HKD): - 2023: 1,575 - 2024: 1,606 (2.0% YoY growth) - 2025E: 1,809 (12.7% YoY growth) - 2026E: 1,928 (6.5% YoY growth) - 2027E: 2,029 (5.3% YoY growth) [2][7] - Earnings per Share (HKD/share): - 2023: 0.48 - 2024: 0.47 - 2025E: 0.52 - 2026E: 0.55 - 2027E: 0.58 [2][7] Market Data - Closing Price (HKD): 3.28 [3] - Market Capitalization (billion HKD): 114.17 [3] - 52-week High/Low (HKD): 3.67/2.69 [3]

上 市 公 司 公 司 点 评 / 公 司 点 公用事业 2025 年 03 月 17 日 港华智慧能源 (01083) ——核心利润大幅增长 光伏添成长动力 报告原因：有业绩公布需要点评 | 投资要点： | | --- | 财务数据及盈利预测 资料来源：Bloomberg 证券分析师 | | 2023 | 2024 | 2025E | 2026E | 2027E | | --- | --- | --- | --- | --- | --- | | 营业收入（百万港元） | 19,842 | 21,314 | 21,861 | 22,739 | 23,499 | | 同比增长率（%） | -1.2 | 7.4 | 2.6 | 4.0 | 3.3 | | 归母净利润（百万港元） | 1,575 | 1,606 | 1,809 | 1,928 | 2,029 | | 同比增长率（%） | 63.2 | 2.0 | 12.7 | 6.5 | 5.3 | | 每股收益（港元/股） | 0.48 | 0.47 | 0.52 | 0.55 | 0.58 | | 净资产收益率（%） | 6.89 | 6.85 | 6.86 ...