Sino Prima Gas(SZ:300483) Zheng Quan Zhi Xing·2025-06-27 16:52Core Viewpoint - The credit rating agency maintains a stable outlook for Shouhua Gas Technology (Shanghai) Co., Ltd., citing sufficient natural gas reserves and significant development potential, despite facing challenges such as declining gas prices and increased depreciation costs [2][7]. Company Overview - Shouhua Gas Technology's main credit rating is AA- for both the current and previous assessments, with a stable outlook for 2024 and 2025 [2][3]. - The company has seen a rapid increase in natural gas extraction volume, contributing to revenue growth, with a year-on-year increase of 35.31% and 129.40% in 2024 and Q1 2025, respectively [3][4]. Financial Performance - Total assets as of March 2025 are reported at 85.82 billion, with total liabilities at 32.78 billion, and equity attributable to shareholders at 26.85 billion [3]. - Operating income for 2025 Q1 is 6.88 billion, with a net profit of 0.41 billion, indicating a recovery from previous losses [3][4]. - The company maintains a positive cash flow from operating activities, with net cash flow of 4.13 billion in Q1 2025 [4]. Business Development - The acquisition of a 51% stake in Yonghe Weirun significantly enhances the company's natural gas transportation and sales capabilities, contributing to profit margins of 51.06% and 46.23% in 2024 and Q1 2025, respectively [4][5]. - The company is actively engaged in the construction of new gas wells, which will require substantial capital expenditure, leading to increased leverage [6][7]. Industry Context - The domestic natural gas market is expected to grow, with consumption projected to reach 4,300-4,500 billion cubic meters by 2025, driven by industrialization and urbanization [14][16]. - The government is supporting unconventional gas development, particularly in Shanxi Province, which is a key area for coalbed methane production [16][17]. Risks and Challenges - The company faces exploration and development risks associated with natural gas, particularly in the Shilou West Block, where geological uncertainties may impact production [5][6]. - There is a significant reliance on a single partner, China National Petroleum Corporation, for gas supply, which poses risks if the partnership changes [5][6]. - The company’s asset liquidity is weak, and there are concerns regarding the impairment of goodwill and contract rights due to fluctuating gas prices [6][7].