2024-08-16 05:38Investment Rating - The report maintains a neutral rating for the company, New Energy (2688 HK), with a target price adjusted to HKD 64.1 from HKD 66.3 [6][10]. Core Insights - The company's core profit for the first half of 2024 is expected to decline by approximately 15.6% year-on-year to RMB 3.3 billion, primarily due to a 29% drop in gross profit from connection projects and a 59% decrease in wholesale gas profits from LNG trading [6][9]. - Retail gas volume is anticipated to increase by about 5%, with the gross margin improving from RMB 0.46 per cubic meter to RMB 0.49, leading to a 20% rise in retail gas gross profit [6][9]. - The report suggests that the mid-year performance will be crucial for valuation recovery and potential rating adjustments, pending further observation [6]. Financial Forecast Adjustments - The revenue forecast for 2024 is set at RMB 119.826 billion, reflecting a slight increase of 0.3% from the previous estimate [8]. - Core earnings for 2024 and 2025 have been slightly reduced by approximately 1% and 3%, respectively, due to conservative expectations for new connections and smart home business [6][8]. - The valuation multiple has been adjusted from 10 times to 9 times the projected earnings, with the benchmark year moved to 2025 [6]. Performance Overview - For the first half of 2024, the expected revenue is RMB 55.581 billion, showing a year-on-year increase of 2.7% [9]. - The gross profit for the same period is projected to be RMB 7.282 billion, reflecting a 1.7% increase year-on-year [9]. - The net profit for the first half of 2024 is expected to be RMB 3.302 billion, a decrease of 0.9% compared to the previous year [9][14].