Sino Prima Gas(SZ:300483) Soochow Securities·2026-01-20 11:06Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is positioned as a pioneer in deep coalbed methane extraction, with significant potential for revenue growth driven by resource and technological advantages [3]. - The company has successfully transformed into an upstream natural gas producer, focusing on natural gas operations after divesting its gardening business [13]. - The deep coalbed methane industry is expected to see substantial growth, with technological advancements leading to reduced extraction costs [37]. Company Overview - The company has a designed natural gas production capacity of 3.5 billion cubic meters per year, with a sevenfold potential increase in output compared to 2024 [3]. - The company is set to benefit from government subsidies, which have increased the subsidy coefficient for coalbed methane from 1.2 to 1.5, enhancing profitability [3]. - The company has implemented a stock incentive plan to lock in revenue growth, with performance targets set for 2024-2026 based on revenue growth rates [10][22]. Industry Analysis - The deep coalbed methane sector is entering a phase of large-scale development, with deep resources estimated to be three times more abundant than shallow resources [37][40]. - Technological breakthroughs in extraction methods are expected to significantly lower costs, with projected reductions in per-unit extraction costs from 0.85 yuan to 0.53 yuan [48]. - The report highlights that the deep coalbed methane resources in China are substantial, with significant production potential demonstrated in various basins [42][45].