Ge Long Hui·2025-08-22 18:49Core Viewpoint - Hong Kong and Mainland gas sales remain stable, with core profits steadily increasing after excluding exchange rate impacts, supporting a "buy" rating for the company [5] Group 1: Financial Performance - Hong Kong Chinese Gas reported a revenue of HKD 27.514 billion for the first half of 2025, a year-on-year increase of 0.1%, and a net profit attributable to shareholders of HKD 2.964 billion, a decrease of 2.5% year-on-year, but a 5% increase when excluding exchange rate impacts [1] - The company plans to distribute an interim dividend of HKD 0.12 per share, maintaining an annual dividend of HKD 0.35 per share, resulting in a dividend yield of 4.97% based on the closing price on August 20 [1] Group 2: Hong Kong Operations - In the first half of 2025, Hong Kong gas sales volume was 14,935 TJ, remaining stable year-on-year, with residential gas usage increasing to offset the negative impact of residents consuming gas in mainland China [1] - The company increased maintenance fees and basic pricing, enhancing profitability in the Hong Kong gas business, with after-tax operating profit rising 6% to HKD 2.15 billion [1] - The Hong Kong government is accelerating the development of the Northern Metropolis, which is expected to increase gas sales potential to 5,500 TJ, providing long-term growth momentum for the gas business [1] Group 3: Mainland Operations - In the first half of 2025, the total gas sales volume in Mainland China was 18.58 billion cubic meters, a slight decrease of 0.3% year-on-year, with industrial and residential increases offsetting declines in commercial and distribution sectors [2] - The gross margin for city gas sales was HKD 0.54 per cubic meter, an increase of HKD 0.04 per cubic meter, with residential gas prices rising despite a decrease in average costs [2] - The company is effectively controlling the decline in connection business by expanding into rural and old urban areas, with a slight decrease of 5% in completed residential connections [2] Group 4: Extended Business and Renewable Energy - The after-tax profit from extended businesses reached HKD 250 million in the first half of 2025, a year-on-year increase of 39%, focusing on smart kitchens, insurance, and home safety [3] - The company’s photovoltaic power generation increased by 44% to 1.18 billion kWh, with net profits from photovoltaic business and asset management totaling HKD 172 million [4] - The green fuel business faced challenges with a tax-adjusted operating profit of -HKD 190 million, primarily due to low prices for SAF, but future production capacity for green methanol is expected to reach 300,000 tons per year by 2028 [4]