Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the urban gas industry, highlighting its growth driven by economic expansion and decreasing natural gas costs, which leads to significant volume increases. The improvement in price differentials under residential pricing and the expansion into residential and commercial customer services are also emphasized [4][3]. Company Insights Kunlun Energy - **Strong Shareholder Background**: Kunlun Energy is backed by PetroChina, providing a comprehensive layout in the natural gas industry and significant synergy effects. Its main business segments include LNG processing, storage, and transportation, with natural gas sales contributing 65-69% of pre-tax profits [5][3]. - **Cost Advantages**: As PetroChina's sole natural gas terminal sales and management platform, Kunlun Energy benefits from lower resource costs among its member companies from 2017 to 2024, particularly in the central and western regions of China [5][3]. - **Financial Performance**: For 2024, Kunlun Energy expects a revenue growth of 5% and a net profit growth of 4.9%. The company anticipates a net profit growth rate of 5-6% in the coming years, with a stable dividend payout ratio of around 45% [6][3]. - **Valuation Metrics**: The projected PE ratio for 2025 is approximately 9 times, with a PB ratio of about 0.8 times and a dividend yield of around 5% [6][3]. Xinao Energy - **Business Growth**: Xinao Energy maintains a strong recommendation, with rapid growth in its smart home and comprehensive services segments, which have significantly increased their gross profit contribution, offsetting uncertainties in its main business [7][3]. - **Financial Projections**: The company expects economic profit growth of 6-7 percentage points from 2025 to 2026, with a projected PB of about 1.2 times and a PE of around 8 times for 2025, alongside a dividend yield exceeding 5% [8][3]. - **Privatization Plans**: Xinao Holdings aims to privatize Xinao Energy and relist it on the Hong Kong Stock Exchange, which is expected to provide a safety margin for the current stock price and future upside potential. The privatization is intended to achieve integrated operations across upstream resources, terminals, and downstream city gas operations [9][10]. - **Risks in Privatization**: The privatization plan faces risks including compliance with market regulations, valuation recognition, and potential discounts in A-shares, which require further analysis [11][3]. Performance in Public Utilities - Both Kunlun Energy and Xinao Energy demonstrate strong performance in the public utilities sector, characterized by robust free cash flow and cash holdings, positioning them as leading companies in the industry [12][3].