Core Viewpoint - Binhai Investment (02886) reported its mid-year results for 2025, showing revenue and gross profit pressure due to a warm winter and ongoing economic recovery in China, but managed to maintain profit growth through cost-cutting and efficiency measures. The company is expected to see stable EPS growth from 2025 to 2027, supported by an increase in dividend policy, leading to a "Buy" rating with a target price of HKD 1.58 [1] Sales Gas Business - Total sales gas volume for 20251H decreased by 14% year-on-year to 1.14 billion cubic meters, with pipeline sales gas down 12% to 830 million cubic meters and pipeline transmission gas down 18% to 310 million cubic meters, primarily due to warm winter impacts and maintenance by major clients [2] - The company has significantly improved its gross margin, with an average gross margin of RMB 0.44 per cubic meter and a pipeline sales gas gross margin rate increasing by 1.1 percentage points to 6.9%, which is crucial as pipeline sales gas accounts for 61% of the company's gross profit [2][3] Value-Added Services - Revenue and gross profit from value-added services increased by 7% year-on-year to HKD 37.67 million and HKD 25.40 million, respectively, with a maintained gross margin of 67.4%. The growth was driven by significant increases in gas appliance sales and insurance services [4] - The company plans to introduce kitchen beautification services to address declining margins in small installations, anticipating a gross margin of 45% due to a shift in consumer behavior towards home renovations [4] E-commerce Platform - The company will launch an e-commerce platform by the end of September, which includes a store management system and an online sales channel, aimed at enhancing the reach of value-added services and potentially increasing revenue, although initial costs may impact margins [5] Connection Business - The connection business saw a 25% year-on-year revenue decline to HKD 125 million, with gross profit down 30% to HKD 71.9 million. However, the number of new connections showed slight recovery compared to the previous half-year [6] Financing Costs - The company has successfully reduced financing costs, with a 39% year-on-year decrease in financing costs to HKD 45.49 million. The loan structure has shifted to 82% in RMB, with lower interest loans replacing higher interest ones, improving cash flow and funding for business development [8] Support from Sinopec - Binhai Investment's subsidiary received a credit line of RMB 150 million from Sinopec's financial arm, providing low-cost funding and optimizing the company's financing structure [9] Future Outlook - If the winter weather is normal, the company expects strong growth in sales gas volume, with potential significant year-on-year increases in revenue and gross profit for the entire sales gas business in 2025. EPS is projected to be HKD 0.198 and HKD 0.218 for 2025 and 2026, respectively, leading to a target price of HKD 1.58 [10]
信诚证券：控制成本得宜保增长 维持滨海投资(02886)“买入”评级 目标价1.58港元