ENN-NG(SH:600803) Southwest Securities·2024-03-28 16:00Investment Rating - The report upgrades the investment rating for the company to "Buy" with a target price of 25.68 CNY over the next six months [1][3]. Core Insights - The company reported a revenue of 143.84 billion CNY in 2023, a decrease of 6.7% year-on-year, while the net profit attributable to shareholders was 7.09 billion CNY, an increase of 21.3% year-on-year [3][4]. - The platform trading gas volume increased significantly, with a total sales volume of 5.05 billion cubic meters, up 44.0% year-on-year. Domestic sales volume surged by 110%, while overseas sales volume decreased by 4.4% [3][4]. - The company has committed to increasing cash dividends annually by no less than 0.15 CNY per share from 2023 to 2025, with total dividends projected to be no less than 0.91 CNY, 1.03 CNY, and 1.14 CNY per share for the respective years [3][4]. - The company is expected to benefit from the ongoing price mechanism reforms, which may help restore profit margins. The integration of upstream and downstream resources positions the company favorably in the natural gas market [3][4]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 143.84 billion CNY, with a year-on-year growth rate of -6.7%. The net profit attributable to shareholders was 7.09 billion CNY, reflecting a year-on-year growth of 21.3% [3][4]. - The forecast for 2024-2026 indicates net profits of 6.63 billion CNY, 7.48 billion CNY, and 8.30 billion CNY, with corresponding EPS of 2.14 CNY, 2.41 CNY, and 2.68 CNY [4][9]. Business Segments - The natural gas wholesale segment is projected to have sales volumes of 10.2 billion cubic meters, 12 billion cubic meters, and 13.8 billion cubic meters for 2024-2026, with a unit gross margin of 0.3 CNY per cubic meter [7]. - The retail segment is expected to see sales volumes of 25.9 billion cubic meters, 26.7 billion cubic meters, and 27.5 billion cubic meters, maintaining a unit gross margin of 0.4 CNY per cubic meter [7]. - The direct sales segment is forecasted to have sales volumes of 7.1 billion cubic meters, 9.5 billion cubic meters, and 12.4 billion cubic meters, also with a unit gross margin of 0.4 CNY per cubic meter [7]. Valuation - The report assigns a PE ratio of 12 for 2024, leading to a target price of 25.68 CNY, reflecting an upgrade to a "Buy" rating [3][9]. - The average PE of comparable companies is noted to be 11.9 times for 2024, indicating a favorable valuation relative to peers [9][10].