Ge Long Hui·2026-03-29 23:26Core Viewpoint - The company reported its 2025 performance, which met market expectations, with a revenue of HKD 97.73 billion and a net profit of HKD 3.55 billion, reflecting year-on-year declines of 4.8% and 13.3% respectively [1] Financial Performance - The company plans to distribute a final dividend of HKD 0.7 per share, maintaining an annual dividend of HKD 0.95, unchanged from the previous year [1] - Natural gas sales volume reached 40.18 billion cubic meters, with a year-on-year increase of 0.7%, and the purchase-sale price difference was HKD 0.54 per cubic meter, up by HKD 0.01 [1] - The revenue from comprehensive services was HKD 4 billion, showing a year-on-year decline of 4.9% [1] Development Trends - The company’s guidance for the purchase-sale price difference in 2026 is conservative, expecting it to remain flat or slightly decrease, contrasting with peers who anticipate a growth of HKD 0.01-0.02 per cubic meter [1] - The company anticipates completing 1.5-1.7 million new residential connections in 2026, a decrease of 450,000 to 650,000 compared to 2025, with a potential bottoming out of new connections expected in 2027-2028 [2] - The company is likely to allocate more cash flow towards shareholder returns, with an implied dividend yield of approximately 5% for 2026, which may attract long-term investors [2] Profit Forecast and Valuation - The company has lowered its profit forecasts for 2026 and 2027 by 8.8% and 7.8% to HKD 3.345 billion and HKD 3.617 billion respectively [3] - The current stock price corresponds to a price-to-earnings ratio of 13.4x for 2026 and 12.4x for 2027, with a target price of HKD 25 suggesting an upside potential of 28.7% [3]