Ge Long Hui·2025-06-21 02:21Group 1 - The company is expected to report a core profit decline of 6.4% to HKD 3.7 billion for the fiscal year 2025, primarily due to the prolonged impact of a warm winter affecting gas sales volume for 4 to 5 months [1] - Retail gas sales volume is projected to increase by approximately 1% year-on-year, with only a 0.5% increase in the second half of the fiscal year, which is below the company's guidance of 2% [1] - The company anticipates a decrease of about 21% in new residential connections, totaling 1.25 million households [1] Group 2 - For fiscal year 2026, retail gas sales volume is expected to recover to a growth rate of 2%, with the gas sales margin improving to RMB 0.54 per cubic meter [2] - The company conservatively projects a slight decline in new residential connections to 1.23 million households, but may adjust this if there are positive signs in contract performance [2] - The company is expected to maintain a strong free cash flow level, despite a potential decrease in capital expenditures for fiscal year 2026 [2] Group 3 - The profit forecast for fiscal year 2025 has been adjusted down by approximately 2% due to the impact of the warm winter on gas sales volume [3] - Profit growth is anticipated for fiscal years 2026 and 2027, with expected increases of 8.9% and 5.5% respectively [3] - The target price has been raised to HKD 6.7 from HKD 5.92, maintaining a neutral rating, with a focus on the company's dividend yield exceeding 6% as a defensive measure [3]