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联合能源集团：Overhang on share price due to uncertain financial condition of controlling shareholder
00467UNITEDENERGY GP(00467) 招银国际·2024-07-01 01:31

Investment Rating - The report downgrades the investment rating of United Energy (467 HK) to HOLD from Buy, with a revised target price of HK0.30,implyinga2.5xP/Efor2024E[2][3].CoreViews−ThesharepriceofUnitedEnergyisunderpressureduetotheuncertainfinancialconditionofitscontrollingshareholder,OrientGroup,whichisfacingfinancialdifficulties[2][3].−TheearningsforecastforUnitedEnergyremainsunchanged,butthereportindicatesasubstantialoverhangonthestockpriceforthenext3−6monthsduetothefinancialsituationofOrientFinance[2][3].−ThereportsuggeststhatamoreconstructiveoutlookonUnitedEnergywilldependonpositivedevelopmentsattheshareholderlevel[2][3].FinancialSummary−RevenueisprojectedtogrowfromHK0.30, implying a 2.5x P/E for 2024E [2][3]. Core Views - The share price of United Energy is under pressure due to the uncertain financial condition of its controlling shareholder, Orient Group, which is facing financial difficulties [2][3]. - The earnings forecast for United Energy remains unchanged, but the report indicates a substantial overhang on the stock price for the next 3-6 months due to the financial situation of Orient Finance [2][3]. - The report suggests that a more constructive outlook on United Energy will depend on positive developments at the shareholder level [2][3]. Financial Summary - Revenue is projected to grow from HK13,591 million in FY23A to HK15,707millioninFY24E,representingayear−on−yeargrowthof15.615,707 million in FY24E, representing a year-on-year growth of 15.6% [9]. - Adjusted net profit is expected to recover from a loss of HK1,707.4 million in FY23A to HK3,151millioninFY24E[9].−ThereporthighlightsasignificantincreaseindailyoutputfromIraq−Block9,projectedtoreach51.3thousandbarrelsofoilequivalentperdayin2024E,upfrom38.0in2023[3][9].EarningsSummary−TheearningssummaryindicatesanetprofitofHK3,151 million in FY24E [9]. - The report highlights a significant increase in daily output from Iraq - Block 9, projected to reach 51.3 thousand barrels of oil equivalent per day in 2024E, up from 38.0 in 2023 [3][9]. Earnings Summary - The earnings summary indicates a net profit of HK3,151 million for FY24E, with an EPS of 12.05 HK cents, reflecting a year-on-year growth of 9.9% [9]. - The report notes a P/E ratio of 2.3x for FY24E, suggesting that the stock is undervalued compared to its earnings potential [9]. - The gross profit margin is expected to stabilize around 33.0% in FY24E, down from 32.7% in FY23A [9]. Operational Insights - The report provides insights into the operational performance, indicating that the total daily output is expected to increase to 110.1 thousand barrels of oil equivalent per day in 2024E, with a notable decline in output from Pakistan [3]. - Realized crude prices are projected to average US86perbarrelin2024E,whichisaslightincreasefromUS86 per barrel in 2024E, which is a slight increase from US79 in 2023 [3][5]. - The lifting cost is expected to remain stable at around US4.7perbarrelofoilequivalentin2024E[3].SharePerformance−Thereportnotesasignificantdeclineinshareperformance,withanabsolutedropof48.34.7 per barrel of oil equivalent in 2024E [3]. Share Performance - The report notes a significant decline in share performance, with an absolute drop of 48.3% over the past month and a relative decline of 45.0% [2]. - The share price has fluctuated between HK0.30 and HK$1.25 over the past 52 weeks, indicating high volatility [2]. Conclusion - The report emphasizes the need for monitoring the financial condition of Orient Finance and its implications for United Energy's stock performance, while also highlighting potential upside risks related to strategic share disposals and buybacks [2][3].