Soochow Securities·2025-08-11 07:55Investment Rating - The report maintains an "Overweight" rating for the gas industry [1] Core Viewpoints - The report anticipates a rise in US gas prices due to warmer temperatures in August, while domestic gas prices are expected to decline amid slow demand recovery and intensified competition between sea and land sources [5][10] - The report highlights the ongoing adjustments in pricing mechanisms and the potential for cost reductions in downstream gas companies, which may lead to improved profitability and valuation recovery [37][50] Price Tracking - As of August 8, 2025, US HH gas prices increased by 1.5% week-on-week, while European TTF prices decreased by 2.7%, and domestic LNG prices fell by 3.8% [5][10] - The average total supply of natural gas in the US decreased by 1.1% week-on-week to 1,119 billion cubic feet per day, while total demand fell by 6.5% to 1,025 billion cubic feet per day [14][27] Supply and Demand Analysis - The report notes that China's apparent natural gas consumption decreased by 0.2% year-on-year to 2,103 billion cubic feet in the first half of 2025, attributed to warmer winter conditions in 2024 affecting heating demand [27][28] - Domestic LNG import prices averaged 3,819 yuan per ton in June 2025, reflecting a 3.3% increase month-on-month but an 8% decrease year-on-year [27][31] Pricing Mechanism Progress - The report indicates that 64% of cities have implemented residential pricing adjustments, with an average increase of 0.21 yuan per cubic meter [37] - The new pricing mechanism for provincial natural gas pipeline transportation aims to reduce costs and enhance efficiency, with a permitted return rate lower than current provincial levels [50][51] Investment Recommendations - The report recommends focusing on companies that can benefit from cost reductions and pricing adjustments, such as Xin'ao Energy, China Resources Gas, and Kunlun Energy, among others [53] - It also suggests monitoring companies with quality long-term contracts and flexible scheduling capabilities, such as Jiufeng Energy and Xin'ao Shares [53]