Core Viewpoint - The Shanghai Stock Exchange's main board companies have shown resilience and stability in their performance, supported by a series of incremental policies, reflecting a robust economic structure in China [1] Group 1: Export Market Diversification - In 2024, companies on the Shanghai main board achieved overseas revenue of 6.09 trillion yuan, a year-on-year increase of 7%, with non-US exports accounting for over 80% [2] - Key export destinations include ASEAN, Africa, and countries involved in the Belt and Road Initiative, with significant growth in sales for companies like SANY Heavy Industry and SAIC Motor [2] - Major construction state-owned enterprises have actively expanded overseas, signing new orders worth 1.87 trillion yuan, a year-on-year increase of 15% [2] Group 2: High-Tech Product Exports - High-tech products such as high-end equipment, integrated circuits, smart home appliances, and electric vehicles have accelerated exports, leading to revenue growth in related industries [3] - Companies like Oriental Cable and Zhaoyi Innovation have made significant strides in international markets, with Zhaoyi Innovation achieving record high shipments [3] - The rise of new business models like cross-border e-commerce has boosted overseas sales for various sectors, including light manufacturing and retail [3] Group 3: Mergers and Acquisitions Activity - From 2024 to the first quarter of 2025, over 1,500 new M&A transactions were recorded on the Shanghai main board, with a total transaction value exceeding 1.4 trillion yuan [4] - Notable M&A cases include Guotai Junan's acquisition of Haitong Securities and China Shipbuilding's proposed merger with China CSSC, each exceeding 100 billion yuan [4] - The trend of private acquisitions and the purchase of quality non-profitable assets has emerged, indicating a shift in M&A strategies [4][5] Group 4: Quality Improvement and Efficiency - By 2024, 946 companies on the Shanghai main board disclosed "quality improvement and efficiency return" action plans, with nearly 60% participation [6] - Among the companies that disclosed plans, nearly 90% achieved profitability, and almost 50% reported performance growth [6] - The total cash dividend announced by 1,259 companies reached 1.77 trillion yuan, a year-on-year increase of 6%, with a dividend payout ratio of 39% [7] Group 5: ESG Reporting and Progress - In 2024, 1,068 companies on the Shanghai main board disclosed ESG reports, achieving a disclosure rate of approximately 63%, an increase of 6 percentage points year-on-year [9] - The number of companies included in the MSCI ESG rating increased, with 90 companies receiving upgrades in their ratings [9] - Companies have actively engaged in social responsibility initiatives, contributing to employment and environmental sustainability [10] Group 6: Index Investment Growth - In 2024, net inflows into ETFs on the Shanghai main board reached nearly 840 billion yuan, with significant participation from foreign capital [11] - The trading volume of ETFs ranked first in Asia, with a total trading amount of nearly 30 trillion yuan [11] - Foreign investment preferences are concentrated in sectors such as banking, food and beverage, and public utilities, indicating a strategic focus on stable industries [12] Group 7: Exit Mechanisms and Risk Mitigation - Since 2025, 19 companies on the Shanghai main board have faced various forms of delisting, with a significant portion resulting from financial issues [13] - The introduction of diverse exit channels, including voluntary delisting and asset restructuring, has become more prominent [13] - Companies have actively taken measures to improve operations and mitigate risks, with several successfully lifting delisting warnings [13]

Investment Rating - The report assigns a "Buy" rating to the company, New Energy (2688 HK), with a target price of HKD 74.60, indicating a potential upside of 21.4% from the current price of HKD 61.45 [4][9]. Core Insights - The first quarter of 2025 saw gas sales remain stable, influenced by a warm winter, with retail gas volume showing a year-on-year increase of 0.3%, outperforming the mainland's natural gas apparent consumption decline of 2.2% [2][7]. - The management indicated that the warm winter impacted gas sales by approximately 2-3 percentage points, with residential gas sales increasing by 1.1% year-on-year [2][7]. - The privatization plan is progressing steadily, with expectations to seek shareholder approval in the fourth quarter of this year [7][8]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 113,858 million - 2024: RMB 109,853 million - 2025E: RMB 116,552 million (6.1% YoY growth) - 2026E: RMB 122,701 million - 2027E: RMB 129,239 million [3][11]. - Net profit estimates are: - 2023: RMB 6,816 million - 2024: RMB 5,987 million - 2025E: RMB 7,174 million (3.2% YoY growth) - 2026E: RMB 7,782 million - 2027E: RMB 8,098 million [3][11]. - The company is expected to maintain moderate profit growth over the next three years, with a compound annual growth rate of approximately 5% from 2024 to 2027 [7][8]. Operational Performance - The company’s retail gas sales volume is projected to grow as follows: - 2023: 25,145 million cubic meters - 2024: 26,200 million cubic meters - 2025E: 26,782 million cubic meters (2.2% growth) - 2026E: 27,588 million cubic meters - 2027E: 28,421 million cubic meters [8]. - The company has also seen a 9.9% year-on-year increase in its diversified energy sales volume, reaching 100 billion kWh in the first quarter [7][8]. Market Position - The company’s market capitalization is approximately HKD 68,286.31 million, with a 52-week high of HKD 79.30 and a low of HKD 45.25 [6][9]. - The stock has shown a year-to-date change of 10.03% [6].

Investment Rating - The report assigns a "Buy" rating to the company, New Energy (2688 HK), with a target price of HKD 74.60, indicating a potential upside of 21.4% from the current closing price of HKD 61.45 [4][9]. Core Insights - The first quarter of 2025 saw gas sales remain stable, influenced by a warm winter, with retail gas volume growing by 0.3% year-on-year, outperforming the mainland's natural gas apparent consumption decline of 2.2% [2][7]. - The management indicated that the warm winter impacted gas sales by approximately 2-3 percentage points, with residential gas sales increasing by 1.1% year-on-year [2][7]. - The privatization plan is progressing steadily, with expectations for shareholder approval in the fourth quarter of this year [7][8]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 113,858 million - 2024: RMB 109,853 million - 2025E: RMB 116,552 million (6.1% growth) - 2026E: RMB 122,701 million (5.3% growth) - 2027E: RMB 129,239 million (5.3% growth) [3][11]. - Net profit estimates are: - 2023: RMB 6,816 million - 2024: RMB 5,987 million - 2025E: RMB 7,174 million (3.2% growth) - 2026E: RMB 7,782 million (8.5% growth) - 2027E: RMB 8,098 million (4.1% growth) [3][11]. - The company maintains a dividend yield of 4.6% in 2023, projected to increase to 7.0% by 2027 [3][11]. Operational Performance - The company expects retail gas volume and energy sales to grow by 2.2% and 12% respectively in 2025, despite the warm winter's impact [7][8]. - The number of new residential connections decreased by 16% year-on-year to 287,000, with a ratio of new to old homes at 3:1 [7][8]. - The energy business saw a sales volume increase of 9.9% year-on-year to 10 billion kWh, with 14 new projects becoming operational [7][8]. Market Position - The company's market capitalization stands at approximately HKD 68,286.31 million, with a 52-week high of HKD 79.30 and a low of HKD 45.25 [6][9]. - The stock has shown a year-to-date change of 10.03% [6].

Core Points - The "Smart Craftsman Night" event recognized 77 winners of the "Smart Competition," 24 award-winning "Smart Innovation" projects, 12 outstanding innovation studios, and 12 excellent innovation teams, along with 10 outstanding organizations and 18 individuals [2] - The third "Smart Craftsman Project" was held on April 27 at the Silk Road International Art Exchange Center in Langfang, coinciding with the upcoming Labor Day [3] Group 1: Smart Craftsman Project Overview - The third "Smart Craftsman Project" includes two main components: "Smart Competition" and "Smart Innovation," emphasizing the integration of business scenarios with smart products to enhance employee understanding and potential [5] - Approximately 5,300 grassroots employees participated in the competition activities from 2022 to 2025, with around 600 employees competing in the finals of the "Smart Competition" across 10 projects and 229 grassroots innovation achievements collected for "Smart Innovation" [5] Group 2: Skills Development and Recognition - In collaboration with the Langfang Human Resources and Social Security Bureau, 132 outstanding competitors received national vocational skill level certificates, further motivating grassroots employees to enhance their skills [7] - The company has historically prioritized the skill enhancement of grassroots employees, organizing labor competitions since its inception and formally launching industry skill competitions in 2007 [7] Group 3: Future Initiatives and Goals - In 2024, the company will upgrade the "I Craftsman Project" to the "Smart Craftsman Project," aiming to cultivate a workforce that is knowledgeable, skilled, innovative, and self-driven, exploring new models for integrating "smart + craftsman" training [8] - The "Smart Craftsman Night" also launched the "First Value Creation Competition and Skills Improvement Month," encouraging all employees to master new skills and address customer pain points, fostering a culture that values labor and skills [12] Group 4: Leadership and Vision - The company’s Party Secretary emphasized the importance of political assurance, institutional implementation, quality improvement, and rights protection in building a modern workforce, aiming to contribute a unique practical example to the industry [14]

Core Insights - The "Xuanlong-50U" spherical tokamak fusion device developed by Xin'ao has achieved a significant breakthrough by realizing high-temperature, high-density million-ampere plasma current, marking an important step towards the commercialization of hydrogen-boron fusion [1] - This experiment represents the first instance of achieving high-performance parameters for million-ampere hydrogen-boron plasma discharge internationally, positioning China among the top three countries with megampere spherical tokamak devices [1] Group 1 - The "Xuanlong-50U" device is China's first medium-scale spherical tokamak experimental facility, designed and built independently in 2019, and upgraded from the previous "Xuanlong" device [1] - The device was completed by the end of 2023 and exceeded its expected plasma current targets in August 2024, with plans to focus on high-parameter hydrogen-boron plasma discharge research starting in 2025 [1] - The experiment utilized high-concentration hydrogen-boron fuel, achieving plasma electron temperatures of 40 million degrees Celsius and a density of 1×10^20 m^-3, while also addressing technical challenges in efficiently generating spherical tokamak plasma currents [1] Group 2 - The Xin'ao fusion research team aims to achieve even higher hydrogen-boron plasma parameters, targeting ion temperatures of 100 million degrees Celsius by 2026, and generating a certain number of 200 keV high-energy protons for hydrogen-boron fusion reaction experiments [2] - The "Helong-2" device has been designed with a goal of reaching ion temperatures of 500 million degrees Celsius to comprehensively validate the feasibility of hydrogen-boron fusion [2] - The spherical tokamak hydrogen-boron fusion technology route has been incorporated into the national fusion energy strategy, with magnetic confinement spherical tokamak hydrogen-boron fusion being one of the three key research routes proposed by the Ministry of Science and Technology [2]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company demonstrates strong operational resilience, with a high dividend yield leading to a potential revaluation of its value [1] - The privatization transaction is progressing normally, with the current stock price implying a potential discount of 41% for the company's H shares [4] - The expected dividend yield for 2025 is 5.4% [1] Summary by Relevant Sections Retail Gas Volume - In Q1 2025, the company achieved retail gas volume of 7.258 billion cubic meters, a year-on-year increase of 0.3%, outperforming the national natural gas consumption growth rate of -2.2% [2] - The company expects a 6% year-on-year growth in gross profit from retail gas in 2025 [2] Comprehensive Energy Sales - The company reported a comprehensive energy sales volume of 10.039 billion kWh in Q1 2025, a year-on-year increase of 9.9% [3] - The expected gross profit growth for comprehensive energy in 2025 is projected to be 12% [3] Smart Home Services - The penetration rate for smart home services reached 3.7% in Q1 2025, a decrease of 0.3 percentage points year-on-year [3] - The expected gross profit growth for smart home services in 2025 is projected to be 10% [3] Financial Forecasts - The company slightly adjusted its profit forecasts, with core profits for 2025-2027 expected to be 7.220 billion, 7.655 billion, and 8.039 billion RMB respectively, reflecting a CAGR of 5% over three years [5] - The target price has been slightly revised down to 68.6 HKD, based on a 10x PE for 2025E [5] Key Financial Metrics - The company’s revenue for 2025 is projected at 113.873 billion RMB, with a year-on-year growth of 3.66% [6] - The expected EPS for 2025 is 6.38 RMB [6]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company demonstrates strong operational resilience, with a high dividend yield leading to a potential revaluation of its value [1] - The privatization transaction is progressing normally, with the current stock price implying a potential discount of 41% for the company's H shares [4] Summary by Sections Sales and Revenue - In Q1 2025, the company achieved a total gas sales volume of 7.258 billion cubic meters, representing a year-on-year increase of 0.3%, outperforming the national natural gas consumption growth rate of -2.2% [2] - The company expects a 6% year-on-year growth in gross profit for retail gas in 2025 [2] Energy Sales and Smart Home Services - The company reported a 9.9% year-on-year increase in comprehensive energy sales volume, reaching 100.39 billion kWh in Q1 2025 [3] - The penetration rate for smart home services decreased to 3.7%, with a year-on-year decline of 0.3 percentage points [3] - The company anticipates a gross profit growth of at least 10% for smart home services in 2025 [3] Financial Projections - The company slightly adjusted its profit forecasts, with core profits for 2025-2027 expected to be 7.220 billion, 7.655 billion, and 8.039 billion RMB, respectively [5] - The target price is set at 68.6 HKD, based on a 10x 2025E PE ratio [5] Key Financial Metrics - The company is projected to have a revenue of 113.873 billion RMB in 2025, with a year-on-year growth of 3.66% [6] - The expected EPS for 2025 is 6.38 RMB, with a projected ROE of 15.32% [6]

燃气Ⅱ行业跟踪周报 证券研究报告·行业跟踪周报·燃气Ⅱ 关税引发经济衰退担忧美国气价大跌，关税 暂缓欧洲气价回升，国内气价平稳 增持（维持） [Table_Tag] [投资要点 Table_Summary] ◼ 风险提示：经济增速不及预期、极端天气、国际局势变化、安全经营风险。 2025 年 04 月 21 日 证券分析师 袁理 执业证书：S0600511080001 021-60199782 yuanl@dwzq.com.cn 证券分析师 谷玥 执业证书：S0600524090002 guy@dwzq.com.cn 2025-04-14 《天气温暖&产量下降美国气价上 升，俄乌和谈推进欧洲气价下降；关 税影响有限》 2025-04-07 东吴证券研究所 1 / 13 请务必阅读正文之后的免责声明部分 ◼ 价格跟踪：关税引发经济衰退担忧美国气价大跌，关税暂缓欧洲气价回升，国 内气价平稳。截至 2025/04/17,美国 HH/欧洲 TTF/东亚 JKM/中国 LNG 出厂/中 国 LNG 到岸价周环比变动-20.6%/+6.8%/-4.1%/-0.5%/+9.7%至 0.8/3/3.1/3.1/3.1 元/方 ...

Core Viewpoint - The performance of four major gas companies in 2024 shows mixed results, with two companies reporting profit increases and two experiencing declines in net profit [1] Group 1: Financial Performance - Xinao Energy (02688.HK) reported a revenue of 109.85 billion yuan, a decrease of 3.5% year-on-year, and a net profit of 5.99 billion yuan, down 12.2% [1] - Kunlun Energy (00135.HK) achieved a revenue of 187.05 billion yuan, an increase of 5.5%, with a net profit of approximately 5.96 billion yuan, up 4.9% [1] - China Resources Gas (01193.HK) had a revenue of 102.68 billion HKD (approximately 96.70 billion yuan) and a net profit of 4.09 billion HKD (approximately 3.85 billion yuan), reflecting a significant decline of 21.7% [1] - Honghua Smart Energy (01083.HK) reported a revenue of 21.31 billion HKD (approximately 20.07 billion yuan), an increase of 7.4%, and a net profit of 1.61 billion HKD (approximately 1.51 billion yuan), up about 2% [1] - Overall, the four companies' net profit totaled approximately 17.31 billion yuan, a decrease of 1.59 billion yuan year-on-year, representing an 8.4% decline [1] Group 2: Gas Sales and Revenue Sources - Gas sales remain the primary revenue source for urban gas companies, with limited growth in natural gas revenue across the four companies [1] - Kunlun Energy led in total natural gas sales volume at 54.17 billion cubic meters, a year-on-year increase of 9.91% [1] - China Resources Gas reported natural gas sales of 39.91 billion cubic meters, up 2.9% year-on-year [1] - Xinao Energy's natural gas sales volume was 33.65 billion cubic meters, showing a slight increase of 0.09% [1] - Honghua Smart Energy's gas sales volume rose by 5% to 17.20 billion cubic meters [1] Group 3: Non-Gas Business Performance - The gas connection business revenue for urban gas companies declined due to the impact of the real estate market [1] - China Resources Gas saw a 15% decrease in gas connection revenue, while Honghua Smart Energy's connection sales fell slightly by 0.15% [1] - Xinao Energy's gas connection installation revenue dropped by 23.3%, and Kunlun Energy does not engage in gas connection business [1] - In non-gas business areas, the four urban gas companies showed better growth [1] - Xinao Energy's diversified energy business revenue grew by 5.2%, and its smart home business revenue increased by 24.1% [1] - China Resources Gas's comprehensive service revenue rose by 4%, with net profit increasing by 2.3% [1] - Honghua Smart Energy's renewable energy business revenue surged by 76.5%, with net profit increasing fivefold [1] - Kunlun Energy added multiple users, boosting industrial user sales and achieving profitability in its newly unified management of renewable and comprehensive energy businesses [1]

Summary of Conference Call Industry and Company Overview - The conference call focused on the natural gas industry and a specific company, referred to as "Consumption Energy" [1][6] - The company has been involved in market research related to the natural gas sector since last year, emphasizing the importance of marketization in the industry [1] Key Points and Arguments - **Market Trends**: The natural gas sector is experiencing a bottoming out, with cost expectations stabilizing, which is favorable for the industry [1][5] - **Price Dynamics**: The company highlighted that stable price differences in the industrial sector could lead to lower terminal sales prices, enhancing the penetration of clean energy [2] - **Growth Potential**: There is significant potential for natural gas penetration, with estimates suggesting over 50% growth in energy proportion [3] - **Supply Factors**: Increased investment in natural gas supply facilities post the Ukraine conflict is seen as a critical factor for enhancing domestic gas penetration [3] - **Company Performance**: The company’s performance has exceeded expectations, particularly in Macau, and the pricing policies between China and Russia are evolving, which may benefit the company [4] Financial Insights - **Valuation Concerns**: Consumption Energy is currently undervalued compared to its peers, with a significant discount in its price-to-earnings (PE) ratio [8][9] - **Profit Structure**: The company’s core profits are expected to return to a growth trajectory by 2025, driven by improved business fundamentals [6][9] - **Dividend Plans**: The company plans to increase its dividend payout ratio to 44% in 2024, with a gradual increase in subsequent years, indicating a strong commitment to returning value to shareholders [10][26] Business Segments - **Revenue Composition**: The company’s revenue is primarily derived from natural gas retail, which constitutes 42% of its gross profit, followed by natural gas wholesale and engineering installation [15] - **International Operations**: The company has established a strong presence in overseas markets, particularly in Europe, which has contributed to its profitability amid geopolitical tensions [8][21] - **Installation Services**: The engineering installation segment is declining, but the company is managing this through diversification into other service areas [22][23] Additional Considerations - **User Base**: The company has a substantial user base of approximately 30 million residential users, which supports its product sales and service offerings [24] - **Cash Flow Management**: The company reported a strong operating cash flow of 9.61 billion yuan in 2023, indicating good financial health and capital expenditure alignment [12] - **Market Position**: As a private enterprise, the company holds a significant position in the natural gas market, with flexibility in its business structure compared to state-owned enterprises [11] Conclusion - The natural gas industry is poised for growth, with Consumption Energy positioned to benefit from market dynamics and internal strategies. The company’s focus on improving profitability, increasing dividends, and expanding its market presence underlines its potential as a strong investment opportunity moving forward [9][26]