SGC(SH:601139) Hua Yuan Zheng Quan·2024-11-03 04:53Investment Rating - The investment rating for Shenzhen Gas (601139.SH) is maintained as "Buy" [1] Core Views - The third quarter performance was under pressure, with total revenue for the first three quarters at 20.739 billion yuan, a year-on-year decline of 10.58%. The net profit attributable to shareholders was 1.056 billion yuan, down 4.5% year-on-year [1] - The decrease in performance is primarily attributed to reduced profits from comprehensive energy and smart services [1] - Pipeline natural gas sales volume growth has slowed, mainly due to a decline in sales outside the Greater Bay Area, although sales to power plants showed strong growth [2] - The company expects continued improvement in expenses, which could provide some support to performance [3] Summary by Sections Financial Performance - In Q3, revenue was 6.960 billion yuan, down 12.68% year-on-year, and net profit was 318 million yuan, down 30.34% year-on-year [1] - For the first three quarters, pipeline gas sales volume was 3.827 billion cubic meters, a year-on-year increase of 4.91%, but slower than the first half's growth of 6.87% [2] - The comprehensive energy sector's poor performance is linked to an 18% decline in photovoltaic EVA film prices, impacting gross margins and profits [2] Expense Management - Total sales, management, R&D, and financial expenses decreased by approximately 135 million yuan year-on-year in the first three quarters, with Q3 financial expenses down 45 million yuan and R&D expenses down 48 million yuan [3] - The low interest rate environment is expected to support continued improvement in expenses [3] Profit Forecast and Valuation - The forecast for net profit attributable to shareholders for 2024-2026 is 1.413 billion, 1.713 billion, and 1.875 billion yuan, with year-on-year growth rates of -1.85%, 21.23%, and 9.44% respectively [3] - The current stock price corresponds to P/E ratios of 15, 12, and 11 times for 2024, 2025, and 2026 respectively [3]