ENN ENERGY(02688) 交银国际证券·2024-08-27 09:51Investment Rating - The report upgrades the investment rating of the company to "Buy" [3][8]. Core Insights - The company's core earnings for the first half of 2024 decreased by 16.6% year-on-year to 3.26 billion RMB, which aligns with expectations. Excluding LNG trading profits, domestic core earnings increased by 9.5% to 3.08 billion RMB [2][3]. - The report highlights significant growth in the company's energy and smart home segments, with respective gross profits increasing by 17% and 23% year-on-year [2]. - The company is expected to return to a growth trajectory in 2025 and 2026, with projected core earnings growth of 10.6% and 10.0% respectively [3]. Financial Overview - The company’s revenue for 2024 is projected to be 117.5 billion RMB, with a year-on-year growth of 3.2% [3][11]. - Net profit for 2024 is expected to be 6.85 billion RMB, reflecting a slight decrease of 9.8% compared to the previous year [3][11]. - The report anticipates a recovery in gross margins, with the gas retail gross margin expected to improve to 0.54 RMB per cubic meter in 2024 [2][3]. Segment Performance - The energy segment is projected to achieve a sales growth of 20-30% in 2024, while the smart home segment is expected to see gross profit growth of 20-30% [5][6]. - Retail gas sales are expected to increase by over 5% in 2024, with gross profit from retail gas sales anticipated to grow by over 10% [5][6]. Valuation Metrics - The target price for the company has been raised to 65.10 HKD, representing a potential upside of 21.7% from the current price of 53.50 HKD [3][8]. - The report uses a valuation standard of 9 times the projected earnings for 2025 [3].