Zhi Tong Cai Jing·2025-09-01 09:33Core Viewpoint - CMB International has downgraded the valuation of Xin'ao Energy (02688) to a 10x forecast P/E ratio from the previous 11x, with the base year moved to 2026, and adjusted the target price from HKD 74.6 to HKD 73.66 while maintaining a "Buy" rating [1] Financial Performance - Xin'ao Energy's core profit for the first half of the year decreased by 1% year-on-year to RMB 3.2 billion, aligning with market expectations [1] - The company is expected to see a 2.2% year-on-year increase in retail gas volume for the full year of 2025, with a 2.5% increase in the second half [1] - The gross margin for the retail gas segment is projected to be 10% [1] Business Outlook - The number of new residential connections is expected to decline by 8% year-on-year to 1.49 million, with the downward trend further slowing [1] - In the energy sales segment, a slight recovery is anticipated in the fourth quarter due to normalized heating demand, with an overall year-on-year increase of 4% in energy sales for the year [1] Earnings Forecast - Due to weakened retail gas volume and energy business demand, CMB International has reduced the company's earnings forecasts for the next two years by 0.1% and 1.8% respectively, with a projected compound annual growth rate of approximately 4% for earnings from 2024 to 2027 [1]