Investment Rating - The report assigns an "Accumulate" rating to the company [2][9] Core Viewpoints - The company is a leading operator of long-distance natural gas pipelines in Shaanxi Province, benefiting from high dividend yields and stable cash flows. The business model is characterized by a mix of stable pipeline transportation fees and city gas sales, with long-distance pipeline operations contributing 62.2% to revenue and 81.7% to gross profit in 2024 [6][9][11] - The company is expected to experience long-term growth driven by asset injections from the group and ongoing pipeline expansions. The acquisition of pipeline assets is anticipated to significantly increase gas sales volume, with a projected 70% year-on-year increase in gas sales volume in 2024 [6][9][11] - The company has a strong focus on shareholder returns, maintaining a dividend payout ratio above 60% from 2019 to 2024, with a projected dividend yield of approximately 5.6% based on the closing price on June 4, 2025 [6][9][29] Summary by Sections Company Overview - The company is controlled by Shaanxi Gas Group and is a major operator of long-distance natural gas pipelines in Shaanxi Province, with a pipeline network covering 4,569 kilometers and an annual gas transmission capacity of 17 billion cubic meters [12][54] Business Model - The primary business models include long-distance pipeline operations and city gas sales, with the former being the main profit contributor. The long-distance pipeline business operates on a stable fee structure, while city gas sales profit from the price difference between procurement and sales [16][19] Financial Performance - The company has shown stable revenue growth, with a compound annual growth rate (CAGR) of 11.5% in gas transmission volume from 2014 to 2024. The revenue for 2024 is projected to be 90.33 billion yuan, a 19.6% increase compared to the previous year [8][54][20] Growth Drivers - The company is expected to benefit from the injection of group assets and the completion of key pipeline projects, which will enhance its gas transmission capacity significantly. Two major pipelines under construction are projected to add substantial capacity upon completion [11][54] Market Position - The company holds a monopolistic position in the regional market, supported by high entry barriers and a stable operational framework. The government pricing mechanism ensures a steady cash flow linked to gas transmission volumes [50][51]