SPNG(002267) Xinda Securities·2025-06-05 08:33Investment Rating - The investment rating for the company is "Accumulate" [2][9] Core Views - The company is a leading operator of long-distance natural gas pipelines in Shaanxi Province, benefiting from high dividend yields and stable cash flows. The business model is primarily based on collecting stable pipeline transportation fees, with long-distance pipeline operations contributing 62.2% of revenue and 81.7% of gross profit in 2024. The company has maintained a dividend payout ratio above 60% from 2019 to 2024, with a projected dividend yield of approximately 5.6% based on the closing price on June 4, 2025 [6][9][29]. Summary by Sections Company Overview - The company is controlled by Shaanxi Gas Group and is a major operator of long-distance natural gas pipelines in Shaanxi Province. It has a well-established network covering most of the province, with a total pipeline length of 4,569 kilometers and an annual transportation capacity of 17 billion cubic meters [12][56]. Business Model - The main business segments include long-distance pipeline operations and urban gas distribution, with the former being the primary profit contributor. The long-distance pipeline business operates under a mixed model of unified purchase and sales plus transportation, while urban gas operations focus on the price difference between procurement and sales [16][19]. Financial Performance - The company has shown stable revenue growth, with a compound annual growth rate (CAGR) of 11.5% in gas transportation volume from 2014 to 2024. The revenue for 2024 is projected to be 90.33 billion yuan, a 19.6% increase compared to the previous year, driven by the acquisition of pipeline assets [20][56]. Growth Drivers - The company is expected to benefit from the injection of group assets and the construction of key pipelines, which will enhance its long-term growth potential. Two major pipelines under construction are projected to significantly increase the company's gas transportation capacity upon completion [11][56]. Market Demand - The natural gas demand in Shaanxi Province is expected to continue growing steadily, with residential gas consumption being a significant portion of the total demand. The province has abundant natural gas resources, with proven geological reserves of approximately 1.2 trillion cubic meters [38][41].