Core Viewpoint - The announcement indicates that Wuqiao Zhongshun Natural Gas Co., Ltd., a subsidiary of Fuan Energy, plans to sign a natural gas supply cooperation agreement with Hebei Natural Gas Co., Ltd. This agreement aims to optimize gas source structure, reduce procurement costs, and enhance supply security and market competitiveness [1] Group 1 - Wuqiao Zhongshun will prioritize purchasing no less than 10 million cubic meters of natural gas annually from Hebei Natural Gas, contingent on competitive pricing [1] - The specific annual contract volume will be defined in future sales contracts approved by both parties [1] - The initiative is designed to improve the overall gas supply structure and cost efficiency for the company [1]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 7.63 [1][7]. Core Insights - The company focuses on extending its business and optimizing its gas supply structure, leveraging its advantages in the Hong Kong market while exploring potential in mainland China [1][2]. - The company plans to enhance its B2C operations and digitalization by introducing strategic investments, aiming to expand its customer base in mainland China [2]. - The gas supply structure is being optimized to reduce costs and increase flexibility, with a focus on increasing the proportion of unconventional and spot gas [3]. - The company holds a monopolistic position in the Hong Kong market, which significantly contributes to its profits compared to its mainland operations [4]. - Although the mainland business faces short-term challenges, the extended business is expected to be a long-term growth driver [5]. Summary by Sections Business Expansion and Strategy - The management aims to strengthen its extended business operations by collaborating with strategic investors, focusing on customer expansion before exploring cross-regional and multi-brand sales [2]. Gas Supply Optimization - The company plans to increase the share of unconventional and spot gas in its supply mix, currently dominated by the three major oil companies, to optimize costs [3]. Market Position and Profitability - The company enjoys a strong competitive advantage in the Hong Kong market, with a flexible pricing mechanism that allows for quick adjustments based on fuel costs [4]. - The profit contribution from Hong Kong's gas sales significantly exceeds that from mainland operations, highlighting the importance of the Hong Kong market to the company's overall profitability [4]. Mainland Business Outlook - The growth in the mainland commercial gas market is currently under pressure, but the extended business model has the potential to drive long-term growth as it expands its customer coverage [5]. Financial Projections - The company maintains its profit forecasts for the years 2025 to 2027, projecting a compound annual growth rate (CAGR) of 6% for net profit [6].