Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 3.85 [7][19]. Core Views - The company's urban gas business is expected to achieve moderate growth despite a downward adjustment in natural gas sales growth due to industrial demand pressure. The gross margin is anticipated to continue recovering due to pricing adjustments and cost reductions [2][3]. - The renewable energy segment is transitioning to a light-asset model, with stable contributions expected from distributed photovoltaic rights installations. Changes in distributed photovoltaic policies are expected to have limited impact [4][5]. - The company is characterized by high dividend yields, with projected dividend rates of 6.3%/6.6%/7.4% for 2024-2026 if the payout ratio remains at 47% [2][5]. Summary by Sections Profit Forecast Adjustments - The forecast for core net profit for 2024-2026 has been adjusted downwards by 6%/6%/3% to HKD 14.5 billion, HKD 15.3 billion, and HKD 17.0 billion respectively [2][5]. - The sales volume growth for natural gas has been revised down to +6.6%/5.8%/5.2% for 2024-2026, reflecting a decrease from previous estimates [3][5]. Revenue and Profitability Metrics - The company's revenue for 2024 is projected at HKD 20.372 billion, with a slight increase expected in subsequent years [6][26]. - The gross profit margin is expected to improve, with urban gas sales gross margin projected at RMB 0.57/0.59/0.61 per cubic meter for 2024-2026 [3][4]. Valuation Methodology - The valuation approach assigns an 8x PE ratio to the urban gas business and a 12x PE ratio to the renewable energy business, resulting in a target market value of HKD 134 billion [5][19]. - The target price reflects a slight decrease from the previous estimate of HKD 3.93, based on the adjusted PE ratios [5][19].
港华智慧能源：城市燃气稳增长，再生能源释放利润