2024-04-06 16:00Investment Rating - The report maintains an "Outperform" rating for China Resources Gas [3][10][14] Core Views - The town gas business is growing steadily, while the connection business is under pressure due to a slowing economy [2][6] - The company achieved a revenue of HK$101.27 billion in 2023, a year-on-year increase of 7.4%, with a net profit of HK$5.22 billion, up 10.36% [5][10][11] - The gross profit margin decreased to 18.2%, down 0.95 percentage points, while the net profit margin increased to 7.0%, up 0.28 percentage points [10][11] - The company expects to maintain around 3 million new residential users in 2024, despite a decline in new connections due to macroeconomic factors [12][14] Financial Performance - Revenue projections for FY24-26 are adjusted to HK$105.38 billion, HK$111.54 billion, and HK$124.89 billion, respectively [6][14] - Corresponding net profits for FY24-26 are estimated at HK$5.77 billion, HK$6.45 billion, and HK$7.09 billion [6][14] - The company’s capital expenditure in 2023 was HK$7.89 billion, a decrease of 68.1% year-on-year, and is expected to continue declining in 2024 [13][14] Market Position - The company’s market capitalization is HK$52.76 billion (US$6.74 billion) with a current share price of HK$22.80 and a target price of HK$25.39 [3][10] - The stock has shown a relative performance of -3.0% over the past month and -10.2% over the past three months compared to MSCI China [5][10]