Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the stock will outperform the market index by more than 15% over the next six months [9]. Core Insights - The company's revenue for H1 2025 reached 15.432 billion yuan, a year-on-year increase of 11.99%, while the net profit attributable to shareholders was 638 million yuan, a decline of 13.61% [1][7]. - The significant growth in gas resource revenue, which increased by 123.88% year-on-year to 3.406 billion yuan, is attributed to the historical high in key operational metrics [7]. - The company has seen a steady development in its pipeline gas business, with a total of 8.62 million users by the end of June 2025, reflecting a net increase of 210,000 users [7]. Summary by Sections Financial Performance - In H1 2025, the company reported total revenue of 15.432 billion yuan, up 11.99% year-on-year, while net profit decreased by 13.61% to 638 million yuan, primarily due to reduced profits from the smart services segment [1][7]. - The smart services segment's revenue fell by 68.76% to 319 million yuan, with a gross profit decline of 68.96% to 177 million yuan, largely due to decreased sales from gas equipment following the completion of the "bottle-to-pipe" project in Shenzhen [7]. Gas Resource Revenue - The gas resource revenue surged to 3.406 billion yuan, marking a 123.88% increase year-on-year, with natural gas wholesale volume reaching 758 million cubic meters, a growth of 205.65% [7]. Pipeline Gas Business - The company had 8.62 million pipeline gas users by June 2025, with a net increase of 210,000 users, including 5.88 million in the Greater Bay Area [7]. - Pipeline natural gas sales volume for H1 2025 was 2.630 billion cubic meters, reflecting a year-on-year increase of 5.71% [7]. Power Generation - The company successfully commissioned the second 9F unit of its deep-burning thermal power plant, with a total installed capacity of 1,300 megawatts. Power generation for H1 2025 was 931 million kWh, up 113.54% year-on-year [7]. Market Expansion - The company is actively expanding its market presence in the Greater Bay Area for city gas, power plants, and integrated energy, having signed a strategic cooperation agreement with the government of Shanwei City [7]. - In H1 2025, the company successfully expanded its customer base by adding two new power plant users in the Greater Bay Area [7]. Earnings Forecast - The company is projected to have earnings per share (EPS) of 0.51 yuan, 0.52 yuan, and 0.53 yuan for 2025, 2026, and 2027 respectively, with a corresponding price-to-earnings (PE) ratio of 13 times [7][8].

Market Performance - The gas sector increased by 0.19% on September 1, with Baichuan Energy leading the gains [1] - The Shanghai Composite Index closed at 3875.53, up 0.46%, while the Shenzhen Component Index closed at 12828.95, up 1.05% [1] Individual Stock Performance - Baichuan Energy (600681) closed at 3.87, up 4.31% with a trading volume of 336,600 shares and a turnover of 129 million yuan [1] - Jiufeng Energy (605090) closed at 29.66, up 3.09% with a trading volume of 130,000 shares and a turnover of 2.68 million yuan [1] - Shengtong Energy (001331) closed at 12.04, up 2.38% with a trading volume of 56,200 shares and a turnover of 67.25 million yuan [1] - Other notable performers include Telesis (834014) up 2.34%, Victory Co. (000407) up 1.93%, and Kaitian Gas (831010) up 1.81% [1] Fund Flow Analysis - The gas sector experienced a net outflow of 21.30 million yuan from institutional investors, while retail investors saw a net inflow of 0.36 million yuan [2] - Jiufeng Energy had a significant net inflow of 61.44 million yuan from institutional investors, despite a net outflow from retail investors [3] - Longchun Gas (600333) and Baichuan Energy also saw mixed fund flows, with institutional inflows but retail outflows [3]

Investment Rating - The report maintains an "Overweight" rating for the gas industry [1]. Core Insights - The report highlights a slight increase in raw gas demand leading to a minor rise in US gas prices, while European storage advancements have contributed to a decrease in gas prices [4][9]. - The overall supply-demand dynamics indicate a modest increase in raw gas demand, with US natural gas market prices rising by 3.3% week-on-week as of August 27, 2025 [16]. - The report emphasizes the ongoing integration of Jiufeng Energy and the gradual implementation of pricing reforms across the country, which are expected to enhance profitability and valuation recovery for city gas companies [35]. Price Tracking - As of August 29, 2025, the week-on-week changes in gas prices are as follows: US HH +3.3%, European TTF -6.6%, East Asia JKM -2.9%, China LNG ex-factory price 0%, and China LNG CIF price -6.2% [9][14]. - The average total supply of natural gas in the US increased by 0.1% week-on-week to 1,127 billion cubic feet per day, while total demand decreased by 3.5% to 1,025 billion cubic feet per day [16]. Supply and Demand Analysis - The report notes that the storage pace in Europe is slower than expected, leading to a week-on-week decrease in European gas prices by 6.6% [17]. - In China, the apparent consumption of natural gas from January to July 2025 increased by 0.3% year-on-year to 246.1 billion cubic meters, attributed to warmer winter conditions affecting heating gas demand [22][27]. Pricing Progress - The report states that 65% of cities have implemented residential pricing reforms, with an average price increase of 0.21 yuan per cubic meter [35]. - The introduction of a new pricing mechanism for provincial natural gas pipeline transportation is expected to lower costs for downstream users and promote industry growth [35]. Investment Recommendations - The report recommends focusing on companies that can optimize costs and benefit from the ongoing pricing reforms, particularly highlighting New Energy, China Gas, and Kunlun Energy as key investment opportunities [4][35]. - It also suggests monitoring companies with quality long-term contracts and flexible scheduling capabilities, such as Jiufeng Energy and Xin'ao [4].

Core Viewpoint - The company's 1H25 performance met expectations, with revenue growth but a decline in net profit, primarily due to reduced sales in the gas equipment segment and a significant drop in the smart services revenue [1][2][3]. Financial Performance - In 1H25, the company reported revenue of 15.432 billion yuan, a year-on-year increase of 11.99%, while net profit attributable to shareholders was 638 million yuan, a year-on-year decrease of 13.6%, resulting in earnings per share of 0.22 yuan [1]. - For 2Q25, the company achieved revenue of 7.919 billion yuan and a net profit of 405 million yuan, reflecting a year-on-year decline of 12.5% [1]. - The company’s pipeline natural gas sales volume reached 2.630 billion cubic meters, up 5.7% year-on-year, with specific sales in the Greater Bay Area and power plants showing increases of 4.7% and 12.0% respectively [1]. Business Segments - The smart services segment saw a significant revenue drop of 68.8%, totaling 319 million yuan in 1H25, primarily due to the completion of the "bottle-to-pipe" project in Shenzhen [1]. - The photovoltaic film segment reported a revenue of 1.94 billion yuan in 1H25, with a year-on-year increase of 2.3% and a 41% increase in shipment volume [2]. - Operating cash flow for the photovoltaic film business decreased by 50% year-on-year to 680 million yuan, attributed to extended payment periods [2]. Future Outlook - The profitability of the natural gas sales business is expected to improve in 2H25, potentially leading to a sequential performance recovery for the company [3]. - The smart services revenue decline is anticipated to slow down in 2H25, which may support overall performance improvement [3]. - The profitability of the photovoltaic film business remains uncertain due to competitive pressures and limited short-term price increases for EVA [3]. Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, with the current stock price corresponding to a price-to-earnings ratio of 12.9 times for 2025 and 12.7 times for 2026 [4]. - The company holds a target price of 8.00 yuan, implying a potential upside of 20.3% from the current stock price, based on a price-to-earnings ratio of 15.6 times for 2025 and 15.3 times for 2026 [4].

Core Viewpoint - Shenzhen Gas reported a revenue of 15.432 billion yuan for 1H25, representing a year-on-year increase of 12%, while the net profit attributable to shareholders decreased by 14% to 638 million yuan [1][2] Financial Performance - In Q2, Shenzhen Gas achieved a revenue of 7.919 billion yuan, up 14% year-on-year and 5.4% quarter-on-quarter, with a net profit of 405 million yuan, down 13% year-on-year but up 74% quarter-on-quarter [1] - The total sales volume of pipeline natural gas reached 2.630 billion cubic meters in 1H25, an increase of 5.7% year-on-year [1][2] - The wholesale volume of natural gas surged to 758 million cubic meters, marking a significant year-on-year increase of 206% [2] Business Segments - The growth in pipeline gas sales in the Greater Bay Area was attributed to an increase in the number of users, reaching 8.62 million households by the end of June, with a net increase of 210,000 households [2] - The smart services segment negatively impacted overall performance, with revenues dropping by 69% year-on-year to 319 million yuan [2] - The comprehensive energy segment benefited from the commissioning of new gas and electricity units, with net profit increasing by 59% year-on-year to 46 million yuan [2] Future Outlook - The company is expected to open up dividend space by 2026 as new power plants and receiving stations come online [1] - The forecast for net profit attributable to shareholders for 2025-2027 has been adjusted downwards by 4.9%-5.7%, with a projected CAGR of 13% [3] - The target price has been raised to 7.42 yuan, reflecting a premium due to the company's higher net profit growth compared to peers [3]

Core Viewpoint - Shenzhen Gas (601139) reported mixed financial results for the first half of 2025, with revenue growth but a decline in net profit, indicating potential challenges in profitability and cash flow management [1][3]. Financial Performance - Total revenue for the first half of 2025 reached 15.432 billion yuan, an increase of 11.99% year-on-year [1]. - Net profit attributable to shareholders was 638 million yuan, down 13.61% compared to the previous year [1]. - In Q2 2025, total revenue was 7.919 billion yuan, reflecting a year-on-year increase of 14.47%, while net profit for the quarter was 405 million yuan, a decrease of 12.5% [1]. Key Financial Metrics - Gross margin decreased to 13.85%, down 16.46% year-on-year [1]. - Net margin fell to 4.54%, a decline of 23.79% compared to the previous year [1]. - Total operating expenses (sales, management, and financial expenses) amounted to 1.107 billion yuan, accounting for 7.17% of revenue, a decrease of 12.78% year-on-year [1]. - Earnings per share (EPS) dropped to 0.22 yuan, down 15.38% year-on-year [1]. Balance Sheet Highlights - Cash and cash equivalents increased to 5.197 billion yuan, up 15.83% year-on-year [1]. - Accounts receivable rose significantly by 32.4% to 4.478 billion yuan [1]. - Interest-bearing debt surged by 77.55% to 14.439 billion yuan [1]. - The company's net asset per share increased to 5.39 yuan, a rise of 6.26% year-on-year [1]. Business Evaluation - The company's Return on Invested Capital (ROIC) for the previous year was 5.26%, indicating average capital returns [3]. - The historical median ROIC over the past decade stands at 8.09%, suggesting a generally average investment return [3]. - The business model relies heavily on capital expenditure and marketing, necessitating careful evaluation of capital projects and spending [3]. Cash Flow and Debt Analysis - The cash flow situation is concerning, with a cash to current liabilities ratio of only 40.41% [3]. - The interest-bearing debt ratio has reached 30.85%, indicating potential financial strain [3]. - Accounts receivable to profit ratio is alarmingly high at 307.34%, raising concerns about collection efficiency [3]. Analyst Expectations - Analysts project that the company's performance for 2025 will yield a net profit of approximately 1.485 billion yuan, with an average EPS forecast of 0.52 yuan [3].

Group 1 - The company held its 36th meeting of the 5th Board of Directors on August 27, 2025, with all members present and the meeting chaired by Chairman Wang Wenjie [1] - The meeting approved the appointment agreement for the CEO and the performance responsibility letter for the CEO and Vice CEO for the year 2025 with a unanimous vote of 13 in favor [1] - The meeting also approved the performance responsibility letters for the Secretary of the Board, Chief Financial Officer, and Chief Safety Officer for 2025, with a unanimous vote of 14 in favor [1] Group 2 - The company approved the 2025 semi-annual report and its summary, which had been reviewed by the Audit Committee of the Board during its 4th meeting of 2025 [2] - The company also approved the special report on the storage and actual use of raised funds for the first half of 2025, which was reviewed by the Audit Committee of the Board [2]

Group 1 - The company held its 17th meeting of the 5th Supervisory Board on August 27, 2025, with all three supervisors present and voting, in compliance with legal and regulatory requirements [1] - The Supervisory Board approved the 2025 semi-annual report and its summary with unanimous consent, confirming that the report's preparation process adhered to relevant laws, regulations, and internal management systems [1] - The content and format of the 2025 semi-annual report meet the requirements of the China Securities Regulatory Commission and the Shanghai Stock Exchange, accurately reflecting the company's operational and financial status [1] Group 2 - The Supervisory Board also approved the special report on the storage and actual use of raised funds for the first half of 2025, with unanimous consent [2] - The company strictly followed the management regulations regarding the use of raised funds, ensuring that the funds were stored in a dedicated account and used for specified purposes without any violations [2] - The actual investment of raised funds aligns with the disclosed information, confirming no misappropriation or harm to shareholder interests [2]

Group 1 - Shenzhen Gas announced the convening of its 36th meeting of the fifth board of directors on August 27, 2025, to review various proposals including the performance responsibility documents for the board secretary, CFO, and safety director for 2025 [1] - The revenue composition for Shenzhen Gas in 2024 is as follows: pipeline gas accounts for 55.5%, photovoltaic film for 13.37%, natural gas wholesale for 8.9%, merchandise sales and others for 6.57%, gas engineering and materials for 6.08%, and liquefied petroleum gas wholesale for 5.12% [1]

Group 1 - The core viewpoint of the article is that Shenzhen Gas (601139.SH) reported its mid-year financial results, showing a mixed performance with revenue growth but a decline in net profit [1] Group 2 - For the first half of 2025, the company achieved total operating revenue of 15.432 billion yuan, representing a year-on-year increase of 11.99% [1] - The net profit attributable to shareholders of the parent company was 638 million yuan, reflecting a year-on-year decrease of 13.61% [1] - The basic earnings per share were reported at 0.22 yuan [1]