Investment Rating - The report has downgraded the investment rating of the company to "Neutral" from "Buy" [3][11]. Core Views - The company's FY23 net profit increased by 7.9% year-on-year to 480 million RMB, but this was 27.1% lower than the forecast of 660 million RMB due to lower-than-expected retail gas sales and higher financial costs [2][3]. - The company has provided cautious guidance for FY24, expecting retail gas sales to grow by 5%-6% and adding 280,000-300,000 new residential users [3][4]. - The target price has been adjusted down from HKD 6.12 to HKD 5.05, reflecting a reasonable valuation given the recent stock price increase of 28.2% over the past three months [3][11]. Summary by Sections Financial Performance - FY23 revenue was 7.725 billion RMB, with a retail gas sales volume growth of 4.5%, below the company's guidance of 6%-8% [2][3]. - Wholesale gas sales increased by 40.2%, also below the forecast of 45% [2][3]. - Financial costs rose by 20.4% to 391 million RMB due to increased borrowing rates, exceeding the forecast of 310 million RMB [2][3]. FY24 Guidance - The company expects retail gas sales to grow by 5%-6% and aims to add 280,000-300,000 new residential users [3][4]. - The report anticipates a more conservative estimate of a 4.4% increase in retail gas sales and 222,000 new residential users for FY24 [3]. Profit Forecast Adjustments - The net profit forecasts for FY24 and FY25 have been reduced by 32.1% and 36.2% to 540 million RMB and 600 million RMB, respectively [3][4]. - The report indicates a projected increase in net profit of 11.9% and 12.6% for FY24 and FY25 [3][4]. Valuation Metrics - The adjusted target price corresponds to an 8.5 times FY24 price-to-earnings ratio, indicating limited upside potential from the current price [3][4]. - The report highlights that the current stock price reflects a reasonable valuation after a significant increase in the past three months [3][4].
FY23盈利转跌为升，但现价已反映合理估值