CHINA RES GAS(01193) 天风证券·2024-09-03 07:12Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5] Core Insights - The company reported a revenue of HKD 52.08 billion for the first half of 2024, representing a year-on-year growth of 7.7%. However, the profit attributable to shareholders decreased by 2.5% to HKD 3.46 billion. Excluding the impact of exchange rate fluctuations, the profit attributable to shareholders increased by 0.3%, and when excluding the consolidated earnings from Chongqing Gas in the same period last year, the profit attributable to shareholders increased by 21.2% [1] Summary by Sections Sales Gas Business Performance - The retail gas volume increased by 5.3% year-on-year to 20.9 billion cubic meters in the first half of 2024. Industrial gas sales rose by 3.7% to 9.66 billion cubic meters, commercial gas sales increased by 8.1% to 5.01 billion cubic meters, and residential gas sales grew by 7% to 5.76 billion cubic meters [2] - The company improved its upstream resource acquisition capabilities, achieving a self-managed gas volume of 1.75 billion cubic meters, a 30% increase year-on-year, which is expected to save costs of HKD 30 million. The average cost of gas sales was HKD 2.94 per cubic meter, down HKD 0.14 from the same period last year [2] - The gas sales business accounted for 90.2% of total revenue, an increase of 2.7 percentage points year-on-year, with a profit of HKD 4.75 billion, a significant increase of 31.3% [2] Comprehensive Energy and Services Growth - The comprehensive services segment, which includes kitchen appliances, insurance agency, and housing services, achieved revenue of HKD 1.77 billion, a year-on-year increase of 20%, with segment profit rising by 22.1% to HKD 760 million. Excluding exchange rate fluctuations, the revenue and profit growth rates were 23.5% and 25.7%, respectively [3] - In the comprehensive energy segment, the company signed 27 new distributed photovoltaic projects and put 18 into operation, with cumulative development reaching 208 projects. Energy sales volume increased by 54.6% year-on-year to 1.49 billion kilowatt-hours, generating revenue of HKD 830 million, a 38% increase, and gross profit of HKD 160 million, an 84.3% increase [3] Cash Flow and Dividend Policy - The company reported capital expenditures of HKD 2.36 billion, a decrease of 47.3% year-on-year, and free cash flow improved significantly to HKD 1.9 billion, a year-on-year increase of 562.3%. The interim dividend proposed is HKD 0.25 per share, a substantial increase of 66.7% [4] - Profit forecasts for 2024-2026 estimate net profits attributable to shareholders at HKD 5.73 billion, HKD 6.37 billion, and HKD 7.15 billion, respectively, with corresponding price-to-earnings ratios of 11.4, 10.3, and 9.2 times [4]