Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a total revenue of HKD 80.25 billion for the fiscal year 2024/25, a decrease of 1.96% year-on-year, while the net profit attributable to shareholders increased by 2.09% to HKD 3.25 billion [8] - The company has improved its free cash flow, reaching HKD 4.66 billion, which exceeds the planned dividend payout of HKD 2.72 billion, indicating a sustained ability to distribute dividends [8] - The report highlights that retail gas sales volume faced pressure, but the progress in pricing adjustments was slightly better than expected [8] Summary by Sections Financial Performance - Total revenue for FY2024A is projected at HKD 81.86 billion, with a year-on-year decrease of 11.43% [1] - Net profit for FY2024A is estimated at HKD 3.19 billion, reflecting a year-on-year decrease of 25.82% [1] - The earnings per share (EPS) for FY2024A is projected at HKD 0.58, with a price-to-earnings (P/E) ratio of 12.54 [1] Business Segments - Natural gas sales segment profit increased by 7.94% to HKD 3.31 billion, but retail gas volume only grew by 0.02% to 23.52 billion cubic meters [8] - The connection business segment profit decreased by 25.39% to HKD 508 million, with residential connections declining by 15.5% [8] - The LPG sales segment profit dropped by 56.68% to HKD 52 million, influenced by international market conditions [8] - Value-added services segment profit grew by 10.59% to HKD 1.75 billion, supported by new business initiatives [8] Future Projections - The report projects net profit for FY2026E at HKD 3.48 billion, with a year-on-year growth of 6.93% [1] - The company aims to achieve a retail gas gross margin of HKD 0.55 per cubic meter and a retail gas volume growth of 2%+ for FY2026 [8] - The report introduces FY2028 profit forecasts of HKD 3.99 billion, with a projected P/E ratio of 9.99 [1]

Core Viewpoint - China Gas reported a revenue of HKD 79.258 billion for the fiscal year 2024/25, a year-on-year decrease of 2.6%, while net profit attributable to shareholders increased by 2.1% to HKD 3.252 billion, with a stable dividend of HKD 0.50 per share, meeting expectations [1] Revenue Breakdown - Natural gas sales revenue was HKD 49.05 billion, down 6.5% year-on-year - Gas connection revenue was HKD 3.63 billion, down 9.6% year-on-year - Engineering design and construction revenue was HKD 1.76 billion, up 14.7% year-on-year - Liquefied petroleum gas sales revenue was HKD 19.58 billion, up 8.9% year-on-year - Value-added services revenue was HKD 3.73 billion, up 2.1% year-on-year [1] Sales Volume Insights - The volume of gas transported and traded decreased by 9.6% year-on-year - Town gas volume saw a slight increase of 0.02% year-on-year, with residential gas down 2.1%, industrial gas up 1.0%, commercial gas up 3.7%, and gas station gas down 9.0% - The lower-than-expected town gas volume was attributed to a warm winter and economic pressures affecting industrial gas growth [1] Pricing and Margin Analysis - As of March 2025, the cumulative completion of residential gas pricing was approximately 68%, with residential gas prices rising from CNY 2.71 per cubic meter in 2022 to CNY 3.00 in 2024 - The gross margin improved from CNY 0.50 per cubic meter in the fiscal year 2023/24 to CNY 0.537 in 2024/25, with a forecasted increase to CNY 0.55 in 2025/26 [2] Connection Engineering Performance - In the fiscal year 2024/25, the company added approximately 1.4 million new residential connections, with guidance for 1.2-1.4 million - The tax-pre-profit margin from connection and engineering construction decreased to 16.3% last year, with expectations for reduced performance drag from declining connection numbers [2] Value-Added Services Growth - Value-added services achieved a pre-tax profit of HKD 1.75 billion, accounting for 26.2% of total profits, with a year-on-year increase of 10.6% - The growth was driven by increased user coverage, improved operational efficiency, and a richer product and service mix, with guidance for a similar growth rate in 2025/26 [3] Financing and Cash Flow - The company optimized its debt structure, reducing the proportion of foreign currency loans to 0.5%, with the average financing cost decreasing from 4.83% to 3.84% - Free cash flow reached HKD 4.66 billion, an increase of 8.7% year-on-year, with expectations for further improvement due to reduced capital expenditures from declining connection numbers [3]

Core Viewpoint - The company's FY25 earnings fell below expectations, with a revenue of HKD 79.3 billion, a year-on-year decrease of 3%, and a net profit of HKD 3.25 billion, a year-on-year increase of 2% [1] Financial Performance - FY25 revenue was HKD 79.3 billion, down 3% year-on-year - FY25 net profit was HKD 3.25 billion, up 2% year-on-year, but below expectations - The decline in performance was primarily due to underperformance in joint venture earnings, which fell 37% year-on-year to HKD 441 million, and a 31% increase in income tax expenses to HKD 993 million due to reduced tax refunds [1] - The company plans to distribute a final dividend of HKD 0.35 per share, maintaining the same level as the previous year, with a total annual dividend of HKD 0.50 per share [1] Sales and Margins - FY25 urban gas sales were 23.52 billion cubic meters, remaining stable year-on-year - Residential gas sales decreased by 2.1%, while commercial and industrial gas sales increased by 3.7% and 1.0%, respectively - The gross margin was HKD 0.537 per cubic meter, an increase of HKD 0.036 year-on-year - The company added 1.4 million residential connections, a decrease of 16.5% year-on-year [1] Cash Flow and Investments - FY25 investment cash outflow was HKD 1.78 billion, down 74.8% year-on-year, mainly due to the recovery of loans from joint ventures and a reduction in capital expenditures by approximately HKD 1.4 billion [1] Future Outlook - The trend of improving gross margins is expected to continue until FY27 - For FY26, the company anticipates a 2% year-on-year increase in urban gas sales and a gross margin of HKD 0.55 per cubic meter, driven by an increase in residential pricing ratios [1] Debt and Financial Management - As of the end of FY25, the company's net debt (excluding trade-related financing) was approximately HKD 47.8 billion, showing a slight decrease from FY24 - The company is expected to maintain control over capital expenditures, indicating that the debt level has likely peaked [2] - FY25 saw an increase in receivables provision of HKD 568 million, with ongoing pressure expected in FY26 due to uncertainties in the real estate sector [2] Dividend and Valuation - The company maintained a dividend payout ratio of 83.3% in 2024, with expectations for stable dividends of HKD 0.50 per share over the next 2-3 years, translating to a dividend yield of approximately 6.8% based on the closing price on June 27 [2] - Earnings forecasts for FY26 have been revised down by 32% to HKD 3.285 billion, with FY27 earnings projected at HKD 3.449 billion [2] - The current stock price corresponds to a P/E ratio of 12.2x for FY26 and 11.6x for FY27, with a target price adjustment of 9.1% down to HKD 8, indicating an upside potential of 8.8% [2]

接驳业务继续承压，降幅同比有所收窄。2024/25 财年公司新增居民用户140.05 万户，同比下滑15.5% （去年同比下滑28%）。在接驳用户增量中，存量用户占比达到34.5%，同比增长2.7 个百分点。 2024/25 财年接驳及工程业务合计税前利润仅占公司全部业务税前利润的16.4%，接驳业务对利润贡献 度持续下降。根据公司业绩指引，2025/26 财年新增接驳用户数量小幅下降至100-120 万户，接驳用户 数有望降幅进一步收窄，接驳业务未来对公司整体业绩影响可控。 增值业务与综合能源稳健成长，打造公司成长新动能。2024/25 财年，公司增值业务收入达37.32 亿港 元，同比增长2.1%，经营利润17.5 亿港元，同比增长10.6%。公司以"壹品慧"平台业务作为增值服务业 务主要服务载体，通过增加服务范围及网格精细化管理，盈利能力持续提升。综合能源业务方面，公司 全年供能规模达77.6 亿KWh，切入工商业用户侧储能、绿电、综合能效等业务领域，为客户打绿色低 碳综合能源服务生态，提供多元能源解决方案。 机构：申万宏源研究 研究员：王璐/朱赫 中国燃气发布2024/25 财年业绩。2024/25 ...

机构：交银国际 研究员：郑民康/文昊 较多一次性项目影响2025 财年盈利，自由现金流有较大改善。中燃2025财年报表盈利同比增2.1%，核 心盈利同比降约14%，低于我们预期，主因：1）下半财年零售气量同比下滑1% ，因公司受暖冬影响约 5 个月，导致居民售气同比下跌4%；2）由于船舶出售，期內减少2.6 亿港元的租赁收入；3）2024 财年 有1.5 亿港元的一次性的退税没有在2025 财年再出现。 虽然如此，公司售气毛差同比增约4 分至每方0.54 元人民币，新增居民接驳同比仅下跌15%至150 万 戶，仍高于我们预期的125 万戶，增值业务经营利润同比增长10.6%，合乎预期。同时公司自由现金流 达到新高46.6 亿港元，末期分红亦维持在0.35 港元，合乎预期。 公司目前6.8%的股息率为我们覆盖的燃气分销商中最高，但我们认为目前公司约10 倍2026 财年市盈率 已是合理水平。目前我们认为提高评级仍需要等待盈利/现金流稳定度再提高，从而在股息率和估值上 有更好的平衡点。维持中性评级。 2026/27 财年自由现金流仍有望覆盖目前年度分红。公司2026 财年指引偏向保守：1）零售气增长2%， 售气毛 ...

Investment Rating - The report maintains a "Buy" rating for China Gas [2][7][8] Core Views - The company reported a revenue of HKD 79.26 billion for the fiscal year 2024/25, a decrease of 2.6% year-on-year, while the net profit attributable to shareholders was HKD 3.25 billion, an increase of 2.1% [7] - Free cash flow reached a record high of HKD 4.66 billion, up 8.7% year-on-year, supporting a dividend of HKD 0.50 per share, resulting in a dividend yield of 6.8% [7] - The retail sales volume of natural gas showed a slight increase, with a total sales volume of 39.96 billion m³, down 4.2% year-on-year, but the gross margin improved to HKD 0.537 per m³, an increase of HKD 0.036 per m³ [7] - The connection business faced challenges, with new residential users decreasing by 15.5% year-on-year, but the decline is expected to narrow in the future [7] - Value-added services and comprehensive energy solutions are growing steadily, with revenue from value-added services reaching HKD 3.73 billion, a year-on-year increase of 2.1% [7] Financial Data and Profit Forecast - Revenue projections for the next fiscal years are as follows: HKD 78.49 billion for 2025/26, HKD 75.36 billion for 2026/27, and HKD 76.31 billion for 2027/28 [6] - Net profit forecasts are HKD 3.51 billion for 2025/26, HKD 3.89 billion for 2026/27, and HKD 4.33 billion for 2027/28, reflecting a growth trend [6] - The earnings per share (EPS) are projected to be HKD 0.64 for 2025/26, HKD 0.71 for 2026/27, and HKD 0.79 for 2027/28 [6] - The price-to-earnings (PE) ratio is expected to be 11 for 2025/26, 10 for 2026/27, and 9 for 2027/28, indicating a favorable valuation compared to industry peers [7][8]

Investment Rating - The investment rating for the company is Neutral [4][19]. Core Views - The report indicates that the company's earnings for the fiscal year 2025 will be impacted by one-time items, while cash flow certainty for fiscal year 2026 remains to be improved [2][8]. - The company is expected to maintain a high dividend yield of 6.8%, which is the highest among gas distributors covered [8][19]. - The report suggests that the valuation is reasonable at approximately 10 times the fiscal year 2026 earnings, with a target price adjustment to HKD 6.80, reflecting a potential downside of 7.5% from the current price [8][19]. Financial Overview - Revenue projections for the company are as follows: - FY2024: HKD 81,410 million - FY2025: HKD 79,258 million (down 2.6% YoY) - FY2026E: HKD 80,449 million (up 1.5% YoY) [3][22]. - Net profit estimates are: - FY2024: HKD 3,185 million - FY2025: HKD 3,252 million (up 2.1% YoY) - FY2026E: HKD 3,707 million (up 14% YoY) [3][22]. - The company’s earnings per share (EPS) are projected to be: - FY2024: HKD 0.73 - FY2025: HKD 0.63 (down 14.1% YoY) - FY2026E: HKD 0.68 (up 8.5% YoY) [3][22]. - The company’s free cash flow reached a record high of HKD 46.6 billion [8]. Operational Insights - Retail gas sales volume is expected to grow by 2% in FY2026, with a slight increase in gas margin to RMB 0.55 per cubic meter [10][11]. - The company anticipates adding 120,000 to 140,000 new residential connections in FY2025 [11]. - The management's guidance for FY2025 includes a gas margin of RMB 0.53 per cubic meter and a growth rate of over 2% for gas sales volume [11]. Market Performance - The stock has shown a year-to-date change of 8.57% [6]. - The 52-week high and low for the stock are HKD 8.26 and HKD 5.87, respectively [6].

Group 1 - The core viewpoint of the report is that China Gas (00384) maintains an outperform rating due to its relatively high dividend yield, with a target price of HKD 8, corresponding to FY26/FY27 P/E ratios of 13.3x/12.6x, indicating an upside potential of 8.8% [1] - For FY25, the company reported urban gas sales of 23.52 billion cubic meters, remaining stable year-on-year, with commercial gas volume increasing by 3.7% and industrial gas volume by 1.0%. The gross margin was HKD 0.537 per cubic meter, up by HKD 0.036 per cubic meter, and the operating profit from value-added services was HKD 1.75 billion, a year-on-year increase of 10% [2] - The trend of improving gross margin is expected to continue into FY27, with FY26 projections indicating a 2% year-on-year increase in urban gas sales and a gross margin of HKD 0.55 per cubic meter, benefiting from an increase in the residential pricing ratio [3] Group 2 - As of the end of FY25, the company's net debt (excluding trade-related financing) was approximately HKD 47.8 billion, showing a slight decrease from FY24. The company is expected to continue controlling capital expenditures, indicating that the scale of interest-bearing debt has likely peaked, with potential for further reduction in financial expenses in FY26 due to relatively low RMB financing costs [4] - The company is projected to maintain a stable dividend per share over the next 2-3 years, with a payout ratio of 83.3% in 2024. Based on the growth outlook and debt situation, the expected dividend is around HKD 0.5 per share, resulting in a dividend yield of approximately 6.8% based on the closing price on June 27 [5]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9] Core Views - The company reported a revenue of HKD 79.258 billion for the fiscal year 2024/25, a decrease of 2.6% year-on-year, while the net profit attributable to shareholders was HKD 3.252 billion, an increase of 2.1% year-on-year. The free cash flow for the year reached HKD 4.66 billion, up 8.7% year-on-year. The annual dividend per share remained unchanged at HKD 0.50, resulting in a current dividend yield of approximately 6.8% [2][6] Summary by Sections Revenue and Profitability - The company's revenue for the fiscal year 2024/25 was HKD 79.258 billion, down 2.6% year-on-year, while the net profit attributable to shareholders was HKD 3.252 billion, up 2.1% year-on-year. The free cash flow increased to HKD 4.66 billion, reflecting an 8.7% year-on-year growth [2][6] Dividend Policy - The company maintained its annual dividend at HKD 0.50 per share, consistent with the previous year, resulting in a payout ratio of 83.3% and a current dividend yield of approximately 6.8% [2][6] Business Segments Performance - Natural gas sales revenue was HKD 49.05 billion, down 6.5% year-on-year. Gas connection revenue was HKD 3.63 billion, down 9.6%. Engineering design and construction revenue increased by 14.7% to HKD 1.76 billion. Liquefied petroleum gas sales revenue rose by 8.9% to HKD 19.58 billion, while value-added services revenue increased by 2.1% to HKD 3.73 billion [9] Sales Volume and Pricing - The sales volume of town gas showed a slight increase of 0.02% year-on-year, with residential gas usage down 2.1% and industrial gas usage up 1.0%. The average residential gas price increased from HKD 2.71 per cubic meter in 2022 to HKD 3.00 per cubic meter in 2024, with a potential for further increases in the 2025/26 fiscal year [9] Margin Recovery - The company's gross margin improved from HKD 0.50 per cubic meter in the 2023/24 fiscal year to HKD 0.537 per cubic meter in the 2024/25 fiscal year, with expectations for further improvement to HKD 0.55 per cubic meter in the 2025/26 fiscal year [9] Connection Projects - The company added approximately 1.4 million new residential connections in the 2024/25 fiscal year, with guidance for 1.0 to 1.2 million new connections in the 2025/26 fiscal year [9] Value-Added Services - The value-added services segment achieved a pre-tax profit of HKD 1.75 billion, accounting for 26.2% of total profits, with a year-on-year growth of 10.6% [9] Financing Costs - The company optimized its debt structure, reducing the proportion of foreign currency loans to 0.5%, with the average financing cost decreasing from 4.83% to 3.84% year-on-year [9] Cash Flow - The free cash flow for the fiscal year reached HKD 4.66 billion, with expectations for further improvement due to a slowdown in capital expenditures related to connection projects [9]

Financial Performance - The company generated an operating profit of HK$1.75 billion, a 10.6% year-over-year increase[4, 51] - Value-added Services (VAS) revenue increased by 2.1% year-over-year to HK$3.73 billion[50] - The company's full-year dividend per share remained stable at HK$ 0.50[4, 90] - Revenue decreased by 2.6% year-over-year to HK$79.258 billion[90] - Profit for the year increased by 8.7% year-over-year to HK$4.190 billion[90] - Free cash flow reached HK$4.66 billion, an 8.7% increase compared to the previous year[93] Natural Gas Business - Natural gas sales volume decreased by 4.2% year-over-year[8] - Residential natural gas sales volume increased by 3.7% year-over-year[8] - The average dollar margin for city & township projects increased from RMB 0.501/m³ to RMB 0.537/m³[15] LPG Business - LPG sales volume decreased by 3.2% year-over-year to 3.868 million tons[30] - LPG revenue increased by 8.9% year-over-year to HK$19.5755 billion[30, 90] Connections - New residential connections decreased by 15.5% year-over-year to 1,400,521 users[22] - New commercial connections increased by 46.1% year-over-year to 44,206 users[22]