Henan Lantian Gas (605368) Soochow Securities·2024-10-31 19:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 3.581 billion yuan for the first three quarters of 2024, a year-on-year increase of 0.88%, while the net profit attributable to the parent company was 0.452 billion yuan, a year-on-year decrease of 9.68% [2][3] - The third quarter of 2024 saw a revenue of 0.961 billion yuan, a year-on-year decrease of 4.11%, and a net profit of 0.11 billion yuan, a year-on-year decrease of 32.48%, which was below expectations due to a larger-than-expected decline in midstream pipeline gas price spreads and weaker demand [3] - The company is expected to benefit from the gradual implementation of natural gas pricing policies across various regions, which may lead to a recovery in residential price spreads [4] Financial Performance Summary - For 2024, the company is projected to have total revenue of 4.926 billion yuan, a slight decrease of 0.42% year-on-year, and a net profit of 0.586 billion yuan, a decrease of 3.39% year-on-year [1][4] - The earnings per share (EPS) for 2024 is estimated at 0.83 yuan, with a price-to-earnings (P/E) ratio of 13.55 based on the current price [1][4] - The company has committed to a dividend payout ratio of no less than 70% for 2023-2025, with a payout ratio of 97.13% in 2023 and 91.52% in the first half of 2024, indicating a strong safety margin [4] Business Segment Analysis - The midstream and downstream business margins have declined due to a combination of oversupply and weak demand, leading to a narrowing of pipeline gas price spreads [3] - In the urban natural gas business, residential usage has increased, but the lack of price adjustments has resulted in a year-on-year decline in gross profit from residential gas sales [3] - The installation and connection business has been impacted by the current state of the real estate industry [3]