Ge Long Hui·2025-07-01 02:31Core 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]