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 ...

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 4.00 [7][25][8] Core Insights - The company reported a revenue of HKD 21.314 billion for 2024, representing a year-on-year increase of 7%, and a core net profit of HKD 1.601 billion, which is up 35% year-on-year, exceeding the forecast of HKD 1.45 billion [1][2] - The natural gas sales volume for 2024 increased by 5% year-on-year, with the city gas gross margin rising by RMB 0.02 per cubic meter [1][2] - The company plans to maintain a dividend payout ratio of 41%, with expected dividend yields of 6.2%, 6.5%, and 6.8% for 2025-2027 [1][4] Summary by Sections Revenue and Profitability - The company achieved a core net profit of HKD 1.601 billion in 2024, a 35% increase from the previous year, and revenue reached HKD 21.314 billion [1][6] - The forecast for core net profit for 2025 and 2026 has been raised to HKD 1.71 billion and HKD 1.81 billion, respectively [1][4] Natural Gas Sales - The total gas sales volume for 2024 is projected to be 17.2 billion cubic meters, with industrial, commercial, and residential sales increasing by 2.5%, 4.5%, and 5.2% respectively [2][4] - The forecast for gas sales growth for 2025 and 2026 has been adjusted to 4.8% and 4.6% [2][4] Renewable Energy - The company’s distributed photovoltaic capacity reached 2.3 GW by the end of 2024, with a projected increase to 2.5 GW and 3.0 GW in 2025 and 2026, respectively [3][4] - The renewable energy segment is expected to contribute significantly to profit growth, with net profit estimates for this segment raised by 70% and 66% for 2025 and 2026 [3][4] Valuation and Target Price - The target market capitalization for the company is set at HKD 13.9 billion, with a target price of HKD 4.00 based on a valuation of 7x PE for the city gas business and 11x PE for the renewable energy business [4][25] - The previous target price was HKD 3.85, indicating a positive outlook for the company's valuation [4][25]

Financial Performance - The company's revenue increased by 7.4% to HKD 21.314 billion, with a core profit growth of 34.5% to HKD 1.601 billion[4] - The net profit for the year was HKD 1,796,494 thousand, slightly down from HKD 1,811,324 thousand in 2023, reflecting a decrease of 0.8%[21] - The total operating expenses for 2024 were HKD 19,419,838 thousand, up from HKD 18,177,618 thousand in 2023, indicating a rise of 6.8%[19] - The total comprehensive income for the year was HKD 936,186 thousand, a significant decrease from HKD 1,630,696 thousand in 2023[21] - The operating profit for the year ended December 31, 2024, was HKD 2,205,148,000, compared to HKD 2,196,434,000 in 2023, showing a slight increase of 0.4%[46] - Financing costs decreased to HKD 728,603,000 in 2024 from HKD 769,839,000 in 2023, a reduction of about 5.4%[46] - The company recognized a net other income of HKD 179,587,000 in 2024, down from HKD 426,559,000 in 2023, representing a decline of approximately 57.9%[44] - The profit attributable to shareholders for 2024 was HKD 1.606 billion, a 2.0% increase, with core business profit rising by 34.5% to HKD 1.601 billion[76] Revenue and Sales Growth - The net profit from renewable energy business surged fivefold to HKD 479 million, with cumulative photovoltaic grid connection reaching 2.3 GW and annual power generation doubling to 1.83 billion kWh[4] - The total gas sales volume rose by 5% to 17.201 billion cubic meters, with an improved gas price margin of RMB 0.56 per cubic meter, up RMB 0.02 from the previous year[4] - The number of urban gas customers reached 17.64 million, an increase from 16.77 million in the previous year[5] - Total revenue for the year ended December 31, 2024, reached HKD 21,314,027,000, an increase from HKD 19,841,511,000 in 2023, representing a growth of approximately 7.4%[39] - In 2024, the group's total sales volume reached 5.087 billion cubic meters, an increase of 5.5% year-on-year, with revenue of RMB 19.626 billion, up 9.6%[67] Dividends and Shareholder Returns - The company plans to distribute a final dividend of HKD 0.16 per share and a special dividend of HKD 0.03 per share, totaling HKD 0.19 per share[4] - The company declared a final dividend of HKD 661,319,000 for the year ended December 31, 2024, compared to HKD 536,717,000 in 2023, marking an increase of about 23.2%[50] - The board proposed a final dividend of HKD 0.16 per share and a special dividend of HKD 0.03 per share, totaling HKD 0.19 per share, subject to shareholder approval at the annual general meeting[86] - The cash dividends will be payable, with shareholders having the option to receive new shares instead of cash under the scrip dividend scheme[86] Strategic Initiatives and Business Development - The company is focusing on optimizing core business and enhancing competitiveness through new growth models in renewable energy and smart energy systems[10] - The company is actively developing virtual power plants and energy-as-a-service (EaaS) projects, providing integrated energy management services[12] - The company aims to leverage national policies promoting renewable energy and distributed photovoltaic systems to create growth opportunities[8] - The group aims to expand its renewable energy projects and actively promote Energy as a Service (EaaS) to adapt to changing electricity pricing policies and the rapid integration of new energy sources[16] - The company has initiated a strategic merger of two gas companies in Jinan, Shandong, to optimize resource allocation and enhance asset value[13] Operational Efficiency and Cost Management - The group is committed to cost reduction and efficiency improvement while embracing technology to enhance resilience and contribute to national carbon neutrality goals[17] - Employee costs rose to HKD 1,421,232,000 in 2024 from HKD 1,306,363,000 in 2023, an increase of about 8.8%[43] - The company's tax expenses for 2024 were HKD 408,654,000, compared to HKD 385,110,000 in 2023, indicating an increase of approximately 6.1%[48] Financial Position and Liabilities - As of December 31, 2024, the group's current liabilities exceed current assets by approximately HKD 5.598 billion, with borrowings of about HKD 3.696 billion due within one year[27] - The group has a funding capacity of approximately HKD 13.452 billion through its medium-term note program and HKD 15.432 billion remaining under Panda bonds, along with unused credit facilities of about HKD 10.248 billion from banks and its parent company[27] - The reclassification of convertible bonds resulted in HKD 1.867 billion being moved from non-current to current liabilities as of December 31, 2024[34] - As of December 31, 2024, the group's borrowings totaled HKD 15.427 billion, down from HKD 16.282 billion in 2023[79] Governance and Compliance - The company has complied with all applicable code provisions of the Corporate Governance Code during the year[90] - An audit and risk committee has been established to review and monitor the group's financial reporting, risk management, and internal control systems[90] - The audit and risk committee met with internal auditors and external auditors on February 27, 2025, to review the audited consolidated financial statements for the year ending December 31, 2024[90] Market and Credit Ratings - Moody's and S&P maintained stable credit ratings of Baa1 and BBB+, respectively, reflecting the group's solid business and credit history[83]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 3.85 [7][19]. Core Views - The company's urban gas business is expected to achieve moderate growth despite a downward adjustment in natural gas sales growth due to industrial demand pressure. The gross margin is anticipated to continue recovering due to pricing adjustments and cost reductions [2][3]. - The renewable energy segment is transitioning to a light-asset model, with stable contributions expected from distributed photovoltaic rights installations. Changes in distributed photovoltaic policies are expected to have limited impact [4][5]. - The company is characterized by high dividend yields, with projected dividend rates of 6.3%/6.6%/7.4% for 2024-2026 if the payout ratio remains at 47% [2][5]. Summary by Sections Profit Forecast Adjustments - The forecast for core net profit for 2024-2026 has been adjusted downwards by 6%/6%/3% to HKD 14.5 billion, HKD 15.3 billion, and HKD 17.0 billion respectively [2][5]. - The sales volume growth for natural gas has been revised down to +6.6%/5.8%/5.2% for 2024-2026, reflecting a decrease from previous estimates [3][5]. Revenue and Profitability Metrics - The company's revenue for 2024 is projected at HKD 20.372 billion, with a slight increase expected in subsequent years [6][26]. - The gross profit margin is expected to improve, with urban gas sales gross margin projected at RMB 0.57/0.59/0.61 per cubic meter for 2024-2026 [3][4]. Valuation Methodology - The valuation approach assigns an 8x PE ratio to the urban gas business and a 12x PE ratio to the renewable energy business, resulting in a target market value of HKD 134 billion [5][19]. - The target price reflects a slight decrease from the previous estimate of HKD 3.93, based on the adjusted PE ratios [5][19].

Financial Performance - The group's revenue for the first half of 2024 reached HKD 10,501 million, representing a 6.3% increase compared to the same period last year[6]. - Core business profit surged by 57.5% to HKD 707 million, with a year-on-year increase of 63.3% when calculated in RMB[7]. - The group's net profit for the same period was HKD 846,188, down 31.2% from HKD 1,231,015 in the previous year[14]. - Basic earnings per share decreased to HKD 22.14 from HKD 34.33, while diluted earnings per share fell to HKD 19.32 from HKD 30.20[14]. - The attributable profit for the first half of 2024 was HKD 743 million, a decline of 33.4% year-on-year, while core business profit rose significantly by 57.5% to HKD 707 million[92]. - The total revenue for the six months ended June 30, 2024, was HKD 9,646,660,000, compared to HKD 9,882,711,000 for the same period in 2023, representing a decrease of approximately 2.4%[34]. - The net profit for the period was HKD 1,231,015,000, down from HKD 1,115,411,000 in the previous year, indicating a decline of about 10.5%[34][41]. - The total operating expenses for the six months ended June 30, 2024, were HKD 9,550,931,000, an increase from HKD 9,032,066,000 in 2023, reflecting a rise of approximately 5.8%[35]. Revenue Segments - The number of urban gas customers increased by 450,000 to 17.22 million, with gas sales volume growing approximately 6% to 8,741 million cubic meters[7]. - The company's gas connection segment achieved a profit of HKD 313,569 thousand, reflecting strong operational performance[32]. - The renewable energy segment generated revenue of HKD 754,780 thousand, contributing to the overall growth in the energy sector[32]. - The group’s total sales from pipeline gas business was HKD 8.672 billion, up from HKD 8.256 billion in the previous year[86]. - The renewable energy business revenue increased to HKD 755 million from HKD 443 million year-on-year[86]. Cash Flow and Financial Position - The net cash generated from operating activities for the six months ended June 30, 2024, was HKD 919,456,000, compared to HKD 455,491,000 for the same period in 2023, representing an increase of 102%[20]. - The net cash used in investing activities amounted to HKD 1,587,575,000 for the six months ended June 30, 2024, compared to HKD 1,741,085,000 in the previous year, indicating a decrease of 8.8%[20]. - The net cash generated from financing activities was HKD 1,705,275,000 for the six months ended June 30, 2024, compared to a net cash outflow of HKD 3,172,000 in the same period of 2023[20]. - The group reported a decrease in cash and cash equivalents of HKD 170,078,000, ending the period with HKD 3,824,245,000 compared to HKD 4,185,323,000 at the end of the previous period[20]. - As of June 30, 2024, the group's borrowings amounted to HKD 1,670.1 million, with HKD 902.4 million due within one year[93]. - The group's cash and cash equivalents totaled HKD 397.7 million, with a debt ratio of 37.1% as of June 30, 2024[94]. Strategic Initiatives - The company aims to optimize asset structure and improve capital efficiency through a light asset strategy and partnerships[7]. - The establishment of a gas source business segment has enhanced collaboration with major upstream natural gas companies[8]. - The company is actively developing zero-carbon smart industrial parks to provide green energy solutions for industrial clients[8]. - The "Energy as a Service" (EaaS) model is being promoted to facilitate energy management for industrial customers, creating stable revenue streams[8]. - The group plans to continue expanding its renewable energy projects, with expectations of more new projects contributing to profit growth in the second half of the year[11]. ESG and Risk Management - The group has established an ESG committee at the board level, enhancing its commitment to environmental, social, and governance standards[10]. - The group's ESG risk management has improved, with a risk score reduction to 23.7, reflecting effective management practices[10]. - The group aims to maintain stability and control investment risks amid complex geopolitical situations and high interest rates[11]. - The group is actively promoting low-carbon living among employees through various environmental activities[10]. Shareholder Information - The board decided not to declare an interim dividend for 2024, consistent with the previous year[98]. - The total number of shares held by Dr. Li Ka Kit in the company is approximately 2,379,921,776, representing about 70.95% of the total issued shares[103]. - Mr. Wong Wai Yi holds 9,332,000 shares, which accounts for approximately 0.27% of the total issued shares as of the report date[103]. - The company issued 124,440,353 new shares under the scrip dividend scheme, resulting in a reduction of the subsidiary's shareholding in the company to approximately 68.38%[103]. Employee and Operational Metrics - The company employed 24,171 employees as of June 30, 2024, reflecting a slight increase from the previous year[97]. - The company experienced a decrease in employee costs to HKD 694,415,000 from HKD 677,884,000, reflecting an increase of about 2.2%[35].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [5]. Core Views - The company reported a 6.3% year-on-year increase in revenue for the first half of 2024, reaching HKD 10.501 billion, while operating profit grew by 26.0% to HKD 935 million. However, net profit attributable to shareholders decreased by 33.4% to HKD 743 million due to a non-operating gain of HKD 600 million from exiting a project in Shanghai last year. Excluding this factor, core profit increased by 57.5% [5]. - The company is seeing steady improvement in gas sales margins, with a total gas sales margin of HKD 0.52/m³, benefiting from timely pricing adjustments for industrial and residential gas [5][6]. - The photovoltaic (PV) business is showing significant growth potential, with a 143% increase in PV generation to 680 million kWh in the first half of 2024, contributing to a net profit increase of HKD 148 million in the renewable energy segment [5][6]. Summary by Sections Financial Performance - Revenue (million HKD): 20,073 in 2022, 19,842 in 2023, projected 21,517 in 2024, 23,731 in 2025, and 25,715 in 2026 [4][7]. - Net Profit (million HKD): 965 in 2022, 1,575 in 2023, projected 1,728 in 2024, 1,873 in 2025, and 1,982 in 2026 [4][7]. - Earnings per Share (HKD/share): projected 0.30 in 2024, 0.47 in 2025, 0.51 in 2026 [4]. Business Segments - Gas sales volume increased by 6.2% to 8.74 billion m³ in the first half of 2024, with industrial gas volume growing by 4.6% and commercial gas volume by 9.4% [6]. - The company added three new city gas projects, bringing the total to 190, and increased its user base by 450,000 to 17.22 million [6]. Valuation - The current stock price corresponds to a PE ratio of 5.8 for 2024, 5.3 for 2025, and 5.0 for 2026, with a PB ratio of 0.5, indicating significant valuation upside potential [5].

Investment Rating - The report does not explicitly state an investment rating for the company Core Insights - The company has shown significant growth in core profits, with a 57.5% increase in mid-2024 core profits to HKD 707 million, despite a 33.4% decline in shareholder profit [2] - The renewable energy sector has experienced strong growth, with net profits rising to HKD 164 million in H1 2024, compared to HKD 3 million in H1 2023 [3] - The urban gas business has demonstrated steady growth, with gas sales volume increasing by 6% to 8.741 billion cubic meters in H1 2024 [4] Financial Performance Summary - Total revenue for the company in 2023 was HKD 19,842 million, reflecting a slight decrease of 1.15% from 2022 [1] - The net profit attributable to shareholders for 2023 was HKD 1,575 million, marking a significant increase of 63.2% compared to 2022 [1] - Earnings per share (EPS) for 2023 was HKD 0.4774, up from HKD 0.3017 in 2022 [1] - The return on equity (ROE) for 2023 was 6.89%, an improvement from 4.49% in 2022 [1] - The price-to-earnings (PE) ratio for 2023 was 6.81, down from 12.99 in 2022 [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立的有限公司） （股份代號：1083） 2024 年中期業績公布 財務及經營摘要 | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...