Ge Long Hui·2025-08-30 03:15Core Viewpoint - The company reported a slight increase in revenue for the first half of 2025, but a decline in net profit, primarily due to decreased overseas LNG sales profits, while domestic business showed steady growth [1] Financial Performance - In H1 2025, the company achieved revenue of 55.67 billion yuan, a year-on-year increase of 2.0%, while net profit attributable to shareholders was 2.43 billion yuan, down 5.6% [1] - Core profit for H1 2025 was 3.22 billion yuan, a decrease of 1.2% year-on-year, aligning with market expectations [1] - The company maintained a dividend of 0.65 HKD per share, unchanged from the previous year, with a core profit payout ratio of 21% [1] Business Segments - Domestic business showed steady growth with core profit of 3.10 billion yuan, up 0.7% year-on-year, while overseas LNG sales profit fell to 120 million yuan, down 33.8% [1] - Natural gas retail segment reported a gross profit of 3.092 billion yuan, a decrease of 1.5% year-on-year, with gas volume increasing by 1.9% to 12.95 billion cubic meters [1] - Connection business gross profit was 820 million yuan, down 0.5%, with new residential connections decreasing by 10.7% to 692,000 households [1] - The energy business reported a gross profit of 1.09 billion yuan, up 2.1%, with installed capacity increasing by 8.5% to 13.9 GW [1] - Smart home business gross profit was 1.47 billion yuan, an increase of 4.9%, with the average customer price rising to 649 yuan per household [1] Privatization and Valuation - The privatization of the company is progressing smoothly, with a transaction price of 59.924 billion HKD, corresponding to a 12x PE ratio based on 2024 core profit [1] - The implied price per share is 80 HKD, indicating a 27% upside from the closing price on the valuation date [1] - The major asset restructuring has been filed with the National Development and Reform Commission [1] Earnings Forecast and Investment Rating - The earnings forecast for 2025-2027 has been revised down to 7.09 billion, 7.42 billion, and 7.80 billion yuan, reflecting a year-on-year growth of 18.4%, 4.6%, and 5.2% respectively [1] - The current PE ratios are 9.2, 8.8, and 8.4 times for the respective years [1] - The privatization pricing reflects a revaluation opportunity, maintaining a "buy" rating [1]