SGC(SH:601139) SINOLINK SECURITIES·2024-03-30 16:00Investment Rating - The report maintains a "Buy" rating for the company, with expected earnings per share (EPS) of 0.60, 0.66, and 0.72 for 2024, 2025, and 2026 respectively, corresponding to price-to-earnings (P/E) ratios of 12x, 11x, and 10x [1][5]. Core Insights - In 2023, the company achieved a revenue of 30.93 billion yuan, a year-on-year increase of 2.9%, and a net profit attributable to shareholders of 1.44 billion yuan, up 17.8% year-on-year. The planned cash dividend for 2023 is 0.16 yuan per share, representing a payout ratio of approximately 32.0% [1][5]. - The company's gas sales volume increased by 20.7% year-on-year, driven by power plants and projects in other regions. The total natural gas sales volume reached 5.34 billion cubic meters, with pipeline gas sales at 4.84 billion cubic meters and wholesale gas sales at 0.53 billion cubic meters [1][5]. - The improvement in gross margin for pipeline gas business is expected due to the recovery of international gas prices and the establishment of price linkage mechanisms in various regions. The gross margin for pipeline gas sales improved by 2.3 percentage points year-on-year in 2023 [1][5]. - The photovoltaic film business faced challenges due to a significant decline in selling prices, but downstream demand is expected to remain strong as new photovoltaic installations in China reached 217 GW in 2023 [1][5]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 30.93 billion yuan and a net profit of 1.44 billion yuan, with respective growth rates of 2.9% and 17.8% [1][5]. - The forecast for net profit for 2024, 2025, and 2026 is 1.73 billion yuan, 1.89 billion yuan, and 2.07 billion yuan respectively, indicating a growth trajectory [1][5]. Sales and Operations - The company’s gas sales volume reached 5.34 billion cubic meters in 2023, with a notable increase in sales to power plants, which rose by 38.1% year-on-year [1][5]. - The sales volume of city gas in Shenzhen and surrounding areas also saw significant growth, attributed to the rapid increase in industrial gas demand [1][5]. Market Outlook - The report anticipates continued improvement in the company's gross margin for pipeline gas sales in 2024, supported by favorable pricing adjustments and a return to reasonable international gas prices [1][5]. - The photovoltaic film market is expected to stabilize as demand remains strong, driven by the ongoing transition to renewable energy [1][5].