Foran Energy(SZ:002911) Soochow Securities·2025-06-12 06:54Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Views - Foshan City Gas is a leading player in the urban gas sector, transitioning towards a comprehensive energy service enterprise. The company has implemented an equity incentive plan, with stable cash dividends enhancing its safety margin [2]. - The company has diversified its energy sources and is benefiting from policy support, with significant growth expected in gas consumption and photovoltaic installation capacity [2]. - The company is expanding its supply chain, engineering services, and technology research and development, contributing to multiple revenue streams [2]. Summary by Sections 1. Transition to Comprehensive Energy Services - Foshan City Gas is evolving from traditional urban gas services to a comprehensive energy service model, backed by state-owned capital for stable development. The company has expanded its gas business beyond Foshan, acquiring 13 regional gas operation rights [14][20]. - The company has successfully implemented an equity incentive plan, exceeding performance targets from 2020 to 2024, with an average dividend payout ratio exceeding 70% [43][44]. 2. Energy Business Growth - The company has a diversified natural gas supply model, with a policy target of an 8.9% increase in natural gas consumption from 2025 to 2035. The company has a competitive advantage in Foshan and has secured multiple gas operation rights [2][47]. - The natural gas sales volume has shown a compound annual growth rate of 17.59% from 2018 to 2024, with a stable user structure primarily consisting of industrial and commercial users [56][58]. 3. Supply Chain and Technological Development - The company is leveraging its supply chain advantages, with significant revenue growth in its supply chain business, which includes bio-diesel and bonded fuel oil imports [8]. - The company is also focusing on technology research and development, including solid oxide fuel cells and hydrogen energy equipment manufacturing, to drive innovation [8]. 4. Financial Projections and Valuation - The company is projected to achieve a net profit of 8.72 billion, 9.22 billion, and 9.76 billion yuan from 2025 to 2027, with corresponding P/E ratios of 15.3, 14.5, and 13.7 [2][8].