Summary of Jiufeng Energy Conference Call Industry and Company Overview - The conference call discusses Jiufeng Energy, a company involved in the import of LNG (liquefied natural gas) and the broader natural gas industry in China, particularly in the context of market reforms and demand growth [2][3][6]. Key Points and Arguments 1. **Market Reform Benefits**: The establishment of the National Pipeline Group and the guidance from the National Development and Reform Commission (NDRC) are driving the market-oriented reform of the natural gas sector, which is expected to improve profit distribution for upstream companies, including Jiufeng Energy [2][3]. 2. **Price Arbitrage Opportunities**: The recovery of price differentials between domestic and international markets, along with the release of U.S. export capacity, is anticipated to lower spot prices for LNG in China, allowing Jiufeng Energy to engage in price arbitrage and enhance profitability [4][5]. 3. **Long-term Demand Growth**: China's natural gas demand is projected to grow by an average of 16 billion cubic meters annually, reaching nearly 600 billion cubic meters by around 2024, providing a strong growth impetus for Jiufeng Energy and similar companies [2][6]. 4. **Future Growth Potential**: Jiufeng Energy's growth is expected to stem from stable core operations, high dividends, and potential coal-to-gas project developments, which could add an estimated 2 billion yuan in profit, effectively doubling current profits [2][7]. 5. **Cost Advantages in Coal-to-Gas Projects**: Jiufeng Energy's coal-to-gas projects are expected to have cost advantages in depreciation, financial expenses, and raw coal prices, with projected costs per cubic meter between 1-1.2 yuan and net profits of around 1 yuan per cubic meter [9][11]. 6. **Stable Core Business and Dividends**: The company has a history of stable gross margins and has committed to fixed dividends of 850 to 1,000 million yuan for 2025-2026, translating to a dividend yield of 4%-5% [12][13]. Additional Important Insights - **Historical Margin Stability**: Jiufeng Energy has maintained stable gross margins historically, except for 2021, indicating resilience in its core business [10]. - **Resource Acquisition Strategy**: The company is actively acquiring resources through mergers and acquisitions, which supports its LNG supply and enhances its market position [13]. - **Direct Customer Engagement**: Jiufeng Energy has increased its sales to end customers, with a significant portion of sales directly to core clients, which aids in maintaining favorable pricing [13]. This summary encapsulates the key insights from the Jiufeng Energy conference call, highlighting the company's strategic positioning within the evolving natural gas market in China.

近日，国家能源局发布《中国天然气发展报告（2025）》（以下简称《报告》），总结2024年国内外天 然气发展形势，展望2025年市场供需情况。《报告》显示，2024年我国天然气供应能力不断夯实、消费 保持中高速增长，为全球能源绿色转型和天然气产业链供应链稳定发展做出了积极贡献。 供应能力不断夯实 高效利用成新业态 近年来，我国印发一揽子政策，推进天然气在城镇燃气、工业燃料、燃气发电、交通运输等领域高效利 用，使得其在一次能源消费中的占比由2017年的6.9%提升至2024年的8.8%。 具体来看，2024年我国天然气消费量同比增长7.3%。从消费结构看，城市燃气消费同比增长11.1%，占 比34%；LNG重卡销量创历史新高，使得交通物流消费增长显著；工业燃料消费同比增长6.1%，占比 41%；发电用气同比增长9.5%，占比18%；化工化肥用气小幅增长，占比7%。 值得关注的是，2024年天然气下游市场通过"多能耦合""掺氢利用"，创新开发天然气安全高效利新业 态。比如，雄安利用"天然气+地热"构建绿色低碳供热系统；苏州工业园协同优化区域内多种能源，打 造综合能源服务示范区；广东投产国内首个H级天然气掺氢发电机 ...

Core Viewpoint - The article discusses the growth and development of the global and Chinese natural gas market, highlighting consumption trends, production increases, and infrastructure advancements, while also addressing the impact of market reforms and pricing mechanisms. Global Natural Gas Market - In 2024, global natural gas consumption is projected to reach 4.13 trillion cubic meters, with a year-on-year growth rate increasing from 0.1% to 2.5% [4] - Major markets show varied growth: Europe up 1.4%, North America up 1.3%, and Asia-Pacific leading with a 4.5% increase [5] - Global oil and gas exploration and development investment is expected to be $554 billion in 2024, marking a 2.5% decline, the first drop since 2021 [5] - Global natural gas production is anticipated to reach 4.12 trillion cubic meters, a 1.5% increase year-on-year [5] - Natural gas trade volume is projected to grow by 1.9% to 1.2 trillion cubic meters in 2024, with pipeline gas trade increasing by 2.2% [6] Natural Gas Prices - The average annual price for TTF natural gas is expected to be $10.9 per million British thermal units, down 15.3% year-on-year [8] - Northeast Asia's LNG spot price is projected to average $11.8 per million British thermal units, a decrease of 26.6% [8] - The HH natural gas spot price is expected to average $2.19 per million British thermal units, down 13.6% [9] Chinese Natural Gas Market - In 2024, China's natural gas consumption is expected to grow by 7.3%, with its share in total primary energy consumption rising to 8.8%, an increase of 0.3 percentage points [10][11] - New proven geological reserves of natural gas in China are projected to exceed 1.6 trillion cubic meters in 2024 [11] - China's natural gas production is expected to reach 246.5 billion cubic meters, a 6.0% increase year-on-year [11] - Natural gas imports are projected to be 181.7 billion cubic meters, a 9.9% increase, with LNG imports growing by 7.7% [12] Infrastructure and Policy Developments - In 2024, over 4,000 kilometers of new long-distance natural gas pipelines are expected to be constructed, bringing the total to over 128,000 kilometers [12] - The implementation of the "Energy Law" provides a legal framework for the natural gas industry, promoting the development of unconventional gas resources [13] - Significant advancements in technology and equipment for natural gas exploration and production are reported, including breakthroughs in deep drilling and seismic exploration [14] Market Reforms and Pricing Mechanisms - Since 2017, China's natural gas market reforms have progressed, with increased market access for private enterprises and a rise in the number of pipeline operators [19] - The establishment of a market-based pricing mechanism for natural gas is underway, with significant progress in terminal price adjustments and the promotion of efficient gas utilization [20][21] - The construction of national trading centers is expected to enhance market liquidity, with trading volumes projected to reach 61.7 billion cubic meters in Shanghai and 48.3 billion cubic meters in Chongqing by 2024 [23]

Core Viewpoint - China National Offshore Oil Corporation (CNOOC) has launched the first liquefied natural gas (LNG) whole ship bidding trading service in China, aiming to enhance the sustainable and stable development of the industry in response to natural gas market reforms [1][2]. Group 1: Trading Service Launch - CNOOC's subsidiary, CNOOC Gas and Power Group, partnered with the Shanghai Petroleum and Natural Gas Trading Center to introduce this innovative trading model [1]. - The first auction took place on August 22, attracting over 10 domestic companies, with Newell (Tianjin) Energy Investment Co., Ltd. winning the bid for 65,000 tons, scheduled for delivery in September 2025 [1][2]. Group 2: Market Impact and Supply Assurance - The trading service is designed to meet domestic demand amid high international LNG prices, enhancing supply security before the winter season [2]. - CNOOC Gas and Power Group aims to fulfill social responsibilities by ensuring stable and reliable supply through effective resource scheduling and risk mitigation for customers [2]. Group 3: Future Plans and Market Development - The trading process involves public bidding through the trading center platform, which helps establish fair market prices reflecting supply and demand dynamics [2]. - CNOOC and the trading center are preparing for another auction scheduled for August 26, with an expected trading volume of 180,000 to 260,000 tons for October delivery [2]. - Future plans include optimizing pricing mechanisms and service processes to create a more open, efficient, and resilient natural gas market trading system in China [2].

Group 1 - The core viewpoint of the report is that Guosen Securities has given China Petroleum (601857.SH, latest price: 8.77 yuan) an "outperform" rating based on several factors [2] Group 2 - On the supply side, domestic gas production continues to increase, with significant growth in pipeline gas supply [2] - On the demand side, sales are becoming more market-oriented, leading to an expected increase in the comprehensive selling price of natural gas [2]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][6][20] Core Viewpoints - The ongoing market-oriented reform in the natural gas sector is expected to benefit leading companies like China National Petroleum Corporation (CNPC) [5][6] - The company is projected to see steady growth in natural gas production, with significant contributions from the East Route natural gas pipeline from Russia, which is expected to increase imports by 8 billion cubic meters year-on-year by 2025 [5][10] - The pricing mechanism for domestic natural gas pipeline transportation is set to be unified, which may lead to lower transportation costs and improved market dynamics [4][14][16] - The comprehensive pricing for natural gas is anticipated to rise as the proportion of market-based pricing increases in the company's sales strategy [18][19] Summary by Relevant Sections Gas Supply Side - CNPC is focused on increasing reserves and production, with domestic natural gas output steadily rising. The Daqing oilfield saw an increase of 10,900 tons in crude oil production and 222 million cubic meters in natural gas production year-on-year in the first half of the year [7] - The average price of the company's natural gas resource pool is expected to decline due to lower import prices linked to crude oil [5][10] Pipeline Transportation - The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have issued guidelines to unify provincial natural gas pipeline transportation prices, which are expected to lower costs and enhance market efficiency [4][14] - The guidelines suggest a permitted return rate not exceeding 5.7%, which could further reduce transportation prices [14][16] End User Pricing - The pricing scheme for CNPC's pipeline natural gas is becoming more market-oriented, with a reduction in the proportion of regulated gas, leading to an expected increase in comprehensive gas prices [18][19] - The company anticipates that the marketization of gas sales will enhance profitability in its natural gas business [18][19] Financial Projections - The company maintains its profit forecasts, expecting net profits of 167.4 billion, 170.9 billion, and 174 billion yuan for 2025-2027, with diluted EPS of 0.91, 0.93, and 0.95 yuan respectively [6][20] - The current A-share PE ratios are projected at 10.09, 9.87, and 9.66, while H-share PE ratios are at 6.79, 6.65, and 6.51 [6][20]

Summary of Jiufeng Energy Conference Call Industry Overview - The natural gas industry is undergoing significant market-oriented reforms in 2025, with the National Development and Reform Commission (NDRC) establishing unified standards for provincial gas pipeline transportation fees, linked to the 10-year government bond rate, which lowers costs for downstream gas sales companies [2][3][6]. Company Insights Core Business and Strategy - Jiufeng Energy has diversified resources, including offshore LNG, LPG sales, and land-based natural gas resources in Sichuan, enhancing its competitive edge through mergers and acquisitions [2][7]. - The company is committed to a cash dividend of 850 million yuan in 2025 and 1 billion yuan in 2026, translating to a dividend yield of approximately 4% in 2025 and 5% in 2026, indicating strong dividend value [2][7][22][23]. - Jiufeng Energy has established a comprehensive natural gas industry chain covering commercial, industrial, power plants, transportation, and overseas clients, focusing on clean energy, energy services, and specialty gases [2][9]. Financial Performance and Projections - The company’s current P/E ratio is around 12, with a projected compound annual growth rate (CAGR) of 15% over the next three years due to stock incentives [8][21]. - Expected net profit for 2025 is 1.56 billion yuan, increasing to 1.8 billion yuan in 2026 and 2.13 billion yuan in 2027, reflecting a steady growth trajectory [21]. - Jiufeng Energy's cash flow is robust, with annual operating cash flow between 2 to 2.5 billion yuan and a debt ratio of just over 30%, supporting its strong dividend capacity [22][24]. Market Position and Competitive Advantages - The company benefits from a stable production capacity utilization rate of over 90% across its four core projects in Sichuan, with future growth reliant on new project developments [4][18]. - Jiufeng Energy's helium production capacity has increased to 1 million cubic meters, representing about 3% of domestic consumption, providing a significant cost advantage in the market [4][19][20]. - The company is actively involved in the Hainan commercial satellite launch site project, supplying fuel and specialty gases, which is expected to contribute approximately 50 million yuan in profit if 32 launches occur annually [20]. Challenges and Market Dynamics - The natural gas sector is experiencing weak overall demand growth in 2025, despite some monthly recovery, which has affected the performance of the gas sector [4][6]. - The market-oriented reforms are expected to benefit companies with diversified resource capabilities, allowing them to reduce costs and increase supply [6][8]. Future Outlook - Jiufeng Energy's strategic focus on expanding its LNG and LPG receiving capacity, projected to double from 3 million tons to 6 million tons, positions it well for future growth [14][18]. - The company is also exploring new long-term contracts and expanding its logistics capabilities to ensure stable profitability amid market fluctuations [12][13][14]. Conclusion - Jiufeng Energy demonstrates strong growth potential and a solid financial foundation, making it an attractive investment opportunity in the evolving natural gas market. The company's diversified resource base, commitment to dividends, and strategic positioning in the industry suggest a favorable outlook for long-term investors [24].

Group 1 - The forum "Natural Gas Pipeline Operation Mechanism" focused on the safe operation of natural gas pipelines and resource coordination, featuring key industry leaders [1] - The establishment of the National Pipeline Group has significantly changed the natural gas market in China, enhancing gas flow and promoting high-quality industry development [3] - Hong Kong and China Gas has over 160 years of history, providing gas services to over 4.2 million customers in mainland China and operating more than 130,000 kilometers of pipelines [5][6] Group 2 - Hong Kong and China Gas integrates safety culture into all business operations, establishing a comprehensive safety management system and training over 50,000 employees [5] - The company employs advanced technologies like AI and unique methods such as "dog-scent detection" for efficient pipeline leak detection [8] - The company has a significant focus on environmental protection, with hydrogen accounting for about half of the pipeline gas in Hong Kong, and has never experienced hydrogen embrittlement incidents [10] Group 3 - The domestic natural gas market reform in China has achieved remarkable results, and there is a call for global energy companies to strengthen cooperation to build a low-carbon and efficient energy system [11]

Core Viewpoint - The consensus among industry leaders is to enhance upstream and downstream resource integration, strengthen customer service and comprehensive energy service capabilities, and utilize new AI technologies to improve operational efficiency [1][8]. Industry Challenges - The urban gas industry is undergoing deep adjustments due to changes in business models, increased safety costs, and complex international situations, which pose new challenges for company development [1][4]. - The industry has transitioned from a decade of rapid growth to a more saturated market, with major players and numerous small companies creating a fragmented landscape [4]. - The operating environment for urban gas companies is becoming less optimistic due to intensified safety regulations, rising costs, and international market fluctuations caused by geopolitical events like the Russia-Ukraine conflict [4][5]. Financial Performance - Urban gas companies have seen a decline in net profits, shifting from double-digit growth to single-digit or even negative figures, largely due to reduced margins in gas connection services [5]. - The engineering installation business has also been negatively impacted by the ongoing downturn in the real estate market, leading to significant revenue and margin declines [5]. Pricing and Market Dynamics - The pricing structure in the urban gas sector is characterized by a mismatch between upstream pricing controlled by major oil companies and government-regulated downstream sales prices, which limits flexibility [5][6]. - Companies are experiencing pressure from gas price inversions, particularly in regions like Wuhan, where selling gas incurs losses [5]. Infrastructure and Investment - Companies are investing heavily in upgrading aging pipeline networks, with Shanghai Gas completing 770 kilometers of pipeline renovations and planning to invest around 10 billion yuan for an additional 900 kilometers [6][8]. - The strategic focus includes enhancing local high-pressure gas networks and improving interconnectivity with other regions to ensure stable gas supply [8]. Customer Service and Technological Integration - Companies are recognizing the need to diversify energy services to meet the evolving demands of industrial clients, who now require various forms of energy beyond just gas [9]. - The adoption of AI and digital technologies is seen as crucial for reducing operational costs and improving service efficiency, with initiatives like the installation of smart gas meters being implemented [9].

Investment Rating - The report gives the company an "Accumulate" rating for the first time [6]. Core Views - The company, Kunlun Energy, is positioned to benefit from the high-quality development of its natural gas terminal business, leveraging the advantages of its parent company, China National Petroleum Corporation (CNPC) [1][4]. - The company aims to increase its dividend payout ratio to 45% by 2024, reflecting a commitment to returning value to shareholders [1][46]. - The long-term growth trend in natural gas demand is expected to support the company's revenue and profit recovery, with a projected net profit of 6 billion yuan in 2024, a year-on-year increase of 4.9% [1][4]. Summary by Sections 1. Company Overview - Kunlun Energy is the only platform enterprise under CNPC engaged in natural gas terminal sales and comprehensive utilization, covering city gas, LNG plants, and LNG receiving stations [1][17]. - The company has a significant market presence, operating in 28 provinces and achieving a natural gas sales volume of 54.2 billion cubic meters in 2024, a 9.9% increase year-on-year [17][26]. 2. Business Development - The natural gas sales business has shown strong growth, with a CAGR of 13.7% in revenue from 2016 to 2024 and a CAGR of 15.7% in pre-tax profit [2][53]. - The company has a competitive edge in gas procurement costs, with a purchase cost of 2.437 yuan per cubic meter in 2024, lower than its peers [2][64]. - The LNG receiving stations have a combined unloading capacity of 13 million tons per year, contributing a pre-tax profit of 3.577 billion yuan in 2024, with a profit margin of 75% [3][76]. 3. Financial Projections and Valuation - The company is expected to achieve net profits of 6.649 billion, 7.124 billion, and 7.598 billion yuan in 2025, 2026, and 2027, respectively, with corresponding EPS of 0.77, 0.82, and 0.88 yuan per share [4][5]. - The report anticipates a steady increase in revenue, with projected revenues of 187.046 billion yuan in 2024, reflecting a growth rate of 5.46% [5][28]. 4. Market Trends - The report highlights the robust growth of natural gas consumption in China, with a projected increase in demand driven by urbanization and energy transition efforts [90][93]. - The company is well-positioned to capitalize on the growing demand for natural gas in various sectors, including residential, industrial, and transportation [100][108].